swift_lift.knit

Taylor Swift’s The Eras Tour is a massive cultural force – and an economic one, too. As her concert tour travels across five continents with 151 scheduled shows, the American singer-songwriter sensation delivers a boost to the local economies she visits. This “Swift Lift” extends even to the NFL. After Swift went public with her relationship with Kansas City Chiefs tight end Travis Kelce in 2023, he gained some 2.5 million social media followers, helping to add to the excitement of the upcoming Superbowl.

On the heels of her record-breaking fourth Grammy Award for album of the year, more than any other artist in Grammys history, Swift's concert tour will extend its global reach by kicking off its Asian and European runs. As locals and tourists flock to cities from Tokyo to Amsterdam, the whole world should be paying attention, looking at the experience in the US as a guide.

Introducing “Eventful Economy: Impact Uncovered”

This is the first of a new research series, “Eventful Economy: Impact Uncovered,” where we will regularly review the economic impact of meaningful events in the world. We’ll look at the impact of concerts and sporting events but also unplanned disruptions such as climate shocks. We use a variety of methodologies, including “synthetic controls,” where we create a “counterfactual” for the path of the economy as if the event did not occur (see last section for further explanation). In this report, we dub the incremental boost to sales attributable to The Eras Tour through this type of analysis as “The Swift Lift.” The timeliness and high frequency nature of Mastercard’s aggregated and anonymized data and indices like SpendingPulse uniquely position us to conduct this research. Event analysis is at the core of Mastercard's Data & Services business with the Test & Learn platform available to design and analyze new business ideas that could "shock" the current business model.

...Ready for it?

The Eras Tour visited 20 US cities in 2023. We examined the incremental boost in sales to local businesses in the immediate vicinity of the stadium (within 2.5 miles) up to the surrounding 10-mile radius. Whether they were ready or not, the boost in spending at restaurants and accommodations during the days of the tour was clear and consistent.

Spending growth at restaurants was lifted by an average of 68% per day over the duration of the tour in the immediate vicinity of the stadium (2.5-mile radius) while the average boost to the broader area (10 mile radius) was 7%. It appears that the boost to spending at restaurants owes in large part to concert goers splurging at the stadium and local restaurants – indeed, examining spending by hour, the largest gain for restaurants was the hours leading up to and during the concert.
Accommodations (hotels) is different in that the Swift Lift is more geographically diversified. Spending growth at accommodations was raised by 47% in the immediate vicinity of the stadium and up a similar 32% for the 10-mile radius.
It helps to put this spending boost into perspective. Take one of the smaller cities, Kansas City, MO, for example, where the spending on restaurants over the two days of the Eras tour accounted for nearly two weeks of spending in a “normal” period at restaurants near Arrowhead Stadium.

Of course, there is also likely a broader Swift Lift which may even start well before the concert. Consider, for example:

Local shops sourcing Swift-inspired outfits and memorabilia
Hotels increasing prices because of the concentration of visitors
Jobs that need to be created to accommodate the wave of concertgoers and fans
The publicity for the local venue hosting the Eras tour. Glendale, Arizona, where Taylor launched her tour, was officially renamed “Swift City” for two days. And the Mayor of Glendale quickly grabbed the title of “Mayor Swiftie” on social media.

Glendale, AZ Restaurants-Bars: Swift Lift @ State Farm Stadium

Tap on the timeline above

Wildest dreams

We ran the analysis for each city independently, both on a city level and by zip code, as was revealed in the map above. For restaurants, we focus on the immediate vicinity around the stadium – up to 2.5 miles away – given the concentrated boost to spending at or near the stadium. For accommodations, we expand the measurement to the 10-mile radius, given that concertgoers will stay at hotels further away from the stadium. With these criteria, we rank the tour locations by the size of the Swift Lift.

Stadiums in or close to smaller cities exceeded their wildest dreams with a larger relative boost than the larger, more populated, cities. For example, hotels in East Rutherford, which neighbors New York City, had the smallest boost. By contrast, hotels in smaller cities such as Foxborough, MA and Kansas City, MO had among the largest boosts. The Kansas City concert, which took place before the Swift-Kelce romance went public; imagine the potential lift if the concert happened now!

Today was a fairytale

Fans made their Taylor Swift fairytales come true by traveling far and wide to see her perform. We can quantify this for the US Eras Tour by examining inbound tourism spending by the location of the concert.

Using the same criteria as above, about 4% of spending on dining was from international visitors (within a 2.5-mile radius of the stadium) and 15% for accommodations (within 10 miles of the stadium). The chart below shows these shares by event location with a toggle for restaurants vs. accommodations.
The city where hotels had the largest influence from tourists was East Rutherford, with Inglewood in close second. Las Vegas and Seattle also ranked high on the list. East Rutherford is in close proximity to the major NY airports while Inglewood is close to Los Angeles (LAX). It seems that the concerts hosted in cities near major international airports received greater attention from tourists.
On the other side, hotels surrounding the concert in Kansas City, MO seemed to have little support from tourism. Similarly, Foxborough, Cincinnati and Denver were lower on the list for the share from tourism spending.

In popular tourist destinations where she’ll be playing across Asia and Europe, it’s likely that Swift’s presence will attract additional tourists that otherwise would not have visited, further bolstering the local economy. This may be especially prevalent in cities with convenient transportation access, such as large European cities. This is important for the influx of international travelers, including Americans who didn’t get a chance to catch the concert at home.

The exchange rate (the strong dollar could make it more affordable for Americans to travel abroad), the expected weather in the host city (traveling to Europe in the spring is more appealing than in the winter) and even the day of week the concert takes place could also influence the degree of tourist participation.

Shake it off

If there was ever any doubt about the power of the consumer to drive economic growth, The Swift Lift shows they were able to shake it off. Consumers have deployed their purchasing power for the experiences and goods they prioritize. Experience-based spending drove the gains in 2023, particularly for concerts, sporting events and movies.

Consumers are making empowered choices and the more they splurge on experiences like The Eras Tour, the less they will be able to spend elsewhere. We did see spending on many large-ticket durable goods decrease in 2023 along with a moderation in spending on certain consumable goods, such as groceries, which partly reflects lower inflation.

While consumers may have been reallocating dollars to prioritize spending around The Eras Tour, it is still abundantly clear that consumers are on strong enough footing to be able to make these choices. The Swift Lift is possible because of the purchasing power of consumers.

Long story short

About this methodology (long story), a bit of background (short). A "synthetic control" refers to a machine learning technique enabling the creation of a parallel universe using data. Within the framework of our event series, these parallel universes are designed to eliminate the impact of the event, simulating a scenario where the event never took place.

How does it work? The machine learning process identifies and selects a group of comparable units (donors) from available data. These donors are chosen based on similarities to the entity affected by the event. By combining information from these donors, a synthetic control is created to represent a scenario where the event did not occur. This enables a straightforward comparison to measure the actual impact of the event.

This technique is part of a broader field of study in economics known as “causal inference.” At Mastercard, we offer solutions for businesses to understand the impacts of events through our Test & Learn platform.

Notes & Disclaimer

About the Mastercard Economics Institute

Mastercard Economics Institute launched in 2020 to analyze macroeconomic trends through the lens of the consumer. A team of economists, analysts and data scientists draws on Mastercard insights — including Mastercard SpendingPulse™ — and third-party data to deliver regular reporting on economic issues for key customers, partners and policymakers.

Disclaimer

References to Taylor Swift, the Eras Tour and Swift’s albums in this report are not intended to suggest an endorsement, sponsorship or affiliation with Mastercard.

This Mastercard Economics Institute presentation (This "Presentation") and content or portions thereof may not be accessed, downloaded, copied, modified, distributed, used or published in any form or media, except as authorized by Mastercard. This presentation and content are intended solely as a research tool for informational purposes and not as investment advice or recommendations for any particular action or investment and should not be relied upon, in whole or in part, as the basis for decision-making or investment purposes. This presentation and content are not guaranteed as to accuracy and are provided on an "as is" basis to authorized users, who review and use this information at their own risk. This presentation and content, including estimated economic forecasts, simulations or scenarios from the Mastercard Economics Institute, do not in any way reflect expectations for (or actual) Mastercard operational or financial performance.