Taylor Swift has outgrown the music charts, firmly embedding herself in the financial sphere with the wild success of her global The Eras Tour.
Her popularity globally has not only made her into a cultural phenomenon, a feat that has earned her a considerable buck, but it has had a direct impact on local economies worldwide – an impact that has prompted several world leaders to plead with the artist to bring her tour to their countries.
Taylor’s next stop is Melbourne, where she is due to perform for three nights before heading to Sydney for a further four shows.
While Australia does need an economic boost, what it does not need is an inflationary spike, particularly given inflation is finally starting to trend down.
AMP’s chief economist, Shane Oliver, a self-proclaimed Swiftie, predicts that Taylor’s tour will inject $400 million into the economy.
Speaking to InvestorDaily, he said: “If the average person who is going to the concert, and I think there were 630,000 tickets at last count, if you assume they spend on average $900 each, which I assume is a little bit on the high side, you have a boost to the economy of $570 million for a relatively short period.”
“That’s a big number, and obviously, those businesses and industries affected will certainly feel that.”
However, of that $570 million, Dr Oliver predicted, $170 million will likely dart out of Australia alongside Taylor and her crew.
“Taylor is an import,” he explained. “Most of the musicians coming with her, and others, are imports, so a lot of that money will go out.”
“But if you assume $400 million will stay in Australia, that’s still a big chunk of spending.”
Putting this figure in context, Dr Oliver said it’s really only a drop in the ocean.
“We have a $2.6 trillion economy, dividing $400 million into $2.6 trillion does give you a relatively small number of about 0.02 per cent, so in terms of the impact on annual GDP, it’s probably not going to be noticeable.
“But I think it will certainly be noticeable over the next couple of weeks.”
Dr Oliver compared the phenomenon to the Olympics which tend to boost GDP over the short-term.
“After the event is over, things go back to normal.”
In the US, according to the US Travel Association, Taylor’s concerts are said to have had an economic impact of over $US5 billion – an injection that surpasses that of the hugely popular Super Bowl.
While this figure may sound impressive, Dr Oliver said, and while it is “a huge boost” – one the US will cheer on – again, it only makes up a small portion of the world’s largest economy.
However, Dr Oliver conceded that there is a potential for an uptick in Australia’s monthly inflation figure for February due to the increased spending associated with the tour, notably on airfares and accommodation.
According to recent data, flights and accommodation are at a premium with Flight Centre revealing this week that some fans are actually considering private jets as commercial flights peak.
The travel group said that one-way routes from Brisbane to Melbourne are actually five times more expensive in the week leading up to 16 February than a week later.
“Higher airfares would show up probably for travel undertaken this month, and any increase in accommodation costs in Sydney this month could show up in the CPI for the month of February. So, there is a risk of that,” Dr Oliver said.
But the impact will be short-lived, with things expected to return to “normal” in March.
As such, it’s safe to say that Taylor is very unlikely to occupy Michele Bullock’s mind come March.
“The RBA won’t be raising interest rates on the back of a two-and-a-half-week blip in the economy,” Dr Oliver remarked confidently.
Ultimately, Dr Oliver agreed, Australia is lucky Taylor is not doing a country-wide, month-long tour, and should celebrate that estimated $400 million economic boost.
To hear more of what Dr Oliver had to say about Swiftonomics, tune in to our podcast.
