Tourflation's here: How Taylor Swift, Beyonce are pushing up inflation

Beyonce once sang ‘Who run the world?’ and her answer was girls. But if you ask economists today who runs inflation, there’s a big chance they will say Queen Bee herself. And it’s not just Beyoncé, but even Taylor Swift, Bruce Springsteen, Harry Styles and even Elton John, who recently called it a day on touring.

What are we talking about? It’s about inflation, that big problem causing headaches around the world, and a new factor is contributing to soaring prices – concert tickets. In fact, economists have nicknamed this phenomenon as ‘Funflation’ or even ‘Tourflation’.

But what do concerts and the economy have to do with one another? Potentially a lot, according to some economists.

Big names, bigger concerts

Beyonce, who hasn’t been on tour for the past seven years, kicked off her Renaissance Tour in Europe early in 2023. Taylor Swift’s Eras Tour began in March 2023.

Rock legend Bruce Springsteen and the E Street Band has also kicked off their tour in London, while Harry Styles continues his 22-month-long Love on Tour schedule. Elton John also graced the stage the Glastonbury festival in England; it was also his last tour as he announced a retirement from performing at live concerts.

Even in India, the American boy band (they are no longer boys) Backstreet Boys performed to a sold-out concert in Mumbai.

But acquiring tickets for these concerts is no easy task and they certainly don’t come cheap. Billboard magazine reported that a fairly decent seat at a Renaissance show will set fans back $350, while the New York Post revealed the cheapest seats at a Taylor Swift gig cost $289 before fees.

In India, fans paid an average of Rs 7,000-8,000 ($85-$98) for a ticket at the Backstreet Boys DNA World Tour while in Britain, about 150,000 music fans paid £340 pounds ($431)for a ticket to the Glastonbury festival to see Elton John and hundreds of other acts.

And despite the soaring prices of tickets, fans are willing to burn a hole in their pockets. As London-based Beyhive member Mario Ihieme told Reuters, “People are willing to splurge because they know they will get quality content, plus who knows when or if she’ll do another tour after this one.”

Hitting high notes

And it’s not just about the exorbitant concert tickets. Fans heading to these shows are also forking out more for food and other expenses at the venue. There’s also the costs for boarding and lodging if you are one of the ‘superfans’ travelling to see their performer live.

Klaus Baader, global chief economist at Societe Generale, said he was “struck” not only by how expensive tickets had become but also the additional costs. “All the prices around it, too, have exploded…It’s not just that the tickets become more expensive. It’s also that your beer or cider or your Coca-Cola or your hot dog at the venue has also gotten a lot more expensive,” Baader told CNBC.

Accommodation costs also soar owing to these concerts – a phenomenon observed by Filip Andersson, head of research for Sweden at Danske Bank.

In fact, Beyonce’s first tour stop in Stockholm, Sweden in June led to Danske Bank saying that “Beyoncé’s start of her world tour in Sweden seems to have coloured May inflation, how much is uncertain.”

Michael Grahn, chief economist at the bank also said that her much-hyped concert in May “probably” accounted for 0.2 of the 0.3 percentage points added to inflation by hotels and restaurant prices.

And while the effect is rare, another economist had told the Financial Times that Sweden could see a similar inflation bump when Bruce Springsteen played three nights of concerts in Gothenburg in late June. The numbers haven’t been released yet.

Taylor Swift concerts also have an impact on economies, a phenomenon which has been titled as ‘TSwift Lift’ by research and analysis firm CreditSights. For those non-Swifties out there, the TSwift Lift is a bump in economic activity that takes place in the area where the Grammy-winning artist has performed.

The TSwift Lift also contributed to Chicago Transit Authority registering its highest post-pandemic ridership. Hoteliers also reaped the rewards of the TSwift Lift, as the first two days of the singer’s shows resulted in record hotel bookings for the city.

And such is the effects of the TSwift Lift that Canadian prime minister Justin Trudeau sent her a cheesy invite on 6 July, saying, “It’s me, hi. I know places in Canada would love to have you. So, don’t make it another cruel summer. We hope to see you soon.”

British band Coldplay is also expected to perform in Singapore next year and experts note that this will bring in good tourism revenue after the dip experienced during pandemic.

Reuters further reports that in the United Kingdom, the cost of recreation and cultural activities has experienced their fastest rise in 30 years, with a 6.8 per cent increase in the year leading up to May 2023.

Not everyone’s sold

However, not everyone agrees that these performers have any long-lasting effects on the country’s economy.

Andy Gensler, executive editor of Pollstar, a publication that tracks the global concert industry, called it a “ridiculous assertion” that Beyoncé’s shows would affect inflation. While ticket prices had increased, he said, midyear figures had not shown an appreciable rise since May 2022, when US inflation was 8.6 per cent.

Some have also stated that the inflation, such as that in Sweden, will only be temporary. Filip Andersson, head of research for Sweden at Danske Bank. “If this indeed was a ‘Beyonce effect’ it would be natural for this effect to be temporary and thus correct in June. We do not expect it to have any long-term effects,” he told CNBC.

Philip Shaw, chief economist at Investec was quoted in a Fortune report as saying, “I’d be a little bit surprised if there was a visible impact from a particular concert on the inflation numbers, but it’s not impossible.”

And inflation or no inflation, fans are flocking concerts after being forced to sit at home during COVID-19 and don’t mind the rising ticket prices. “When the pandemic was in full swing, I think everyone was in a really low mood, and we missed out on events like this, where people all come together. Now I think with things up and running, the people who can afford to are saving up to come to things like this because (these events) are amazing,” Beth Cook told Reuters.

With inputs from agencies