As Taylor Swift launches her much-anticipated European Eras tour, expectations of an economic windfall are met with skepticism by economists. Swift, a global music icon, draws massive crowds across European cities, with Stockholm alone seeing close to 180,000 attendees over three sold-out shows in May, generating approximately 850 million crowns ($81 million) in local turnover.
However, economists caution that while Swift’s concerts provide a significant boost to local tourism sectors and businesses like hotels and restaurants, the broader economic impact remains modest and short-lived. Carl Bergkvist, Chief Economist at the Stockholm Chamber of Commerce, acknowledges the weekend surge in revenue but notes it does not significantly impact overall economic growth.
Similar sentiments are echoed across Europe regarding major events like the Olympics and Euro 2024, where localized spending spikes occur in sectors such as hospitality and merchandise sales. Yet, economists argue that much of this spending represents substitution rather than new economic activity, as families redirect budgets toward event-related expenses.
Carsten Brzeski, an economist at ING, underscores this point, stating that the lasting economic benefits of such events are challenging to discern in economic data post-event. Even reports suggesting substantial economic boosts, such as Barclays’ projection of one billion sterling for the UK economy from Taylor Swift’s concerts, are met with skepticism due to potential substitution effects and the repatriation of income to the United States.
Furthermore, Danske Bank’s analysis illustrates localized spending surges during events like football championships, highlighting significant spikes in sectors like beer sales but noting their limited long-term economic impact.
