It’s a problem causing headaches across the world: inflation. But it turns out there may be an unusual new factor contributing to soaring prices—concert tickets.
As the world shakes off the after-effects of a global pandemic some of the biggest artists on earth have undertaken tours.
Beyonce, who hasn’t done a solo run in seven years, kicked off her Renaissance Tour in Europe early in 2023. Taylor Swift’s Eras Tour began in March 2023, after chaos online as millions of fans scrambled to secure a spot.
Both tours are expected to rake in more than a billion dollars: $1.6 billion for Eras and $2.1 billion for Renaissance.
Meanwhile Bruce Springsteen and the E Street Band kick off their tour in London this summer before heading to the U.S., while former One Direction star Harry Styles continues his 22-month long Love on Tour schedule.
Tickets aren’t coming cheap. Billboard estimates a 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.
It’s not up to the artists themselves to set the prices however, with Ticketmaster previously telling USA Today that it was “the promoters and artist representatives determine the specific pricing for their shows.”
Meanwhile inflation across the globe is staying high, despite the best efforts of central banks to bring it down. Despite the manipulations of the Fed, inflation in America sits at 4% while consumers in the U.K. battle inflation rates of 6.5%—the highest in more than two decades.
And those heading to massive shows will rarely only have to fork out for their ticket costs. Food and drinks on the door are another expense, even before fans add in travel and an overnight stay.
Klaus Baader, global chief economist at Societe Generale, said 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 Make It.
The impact of music events on a country’s economy isn’t a new one—Danske Bank economists proposed in May that Sweden may be experiencing a ‘Beyonce blip’ as the superstar kicked off her tour in Stockholm.
The theory arose after a price measure that strips out energy costs and the effect of interest-rate changes rose 8.2% from a year earlier, according to data published by Statistics Sweden. That was higher than the median estimate of 7.8% in a Bloomberg survey as well as the 8.1% expected by the Riksbank.
The rise could have been down to the 80,000 fans who flocked to Stockholm’s Friends Arena for the two nights, the lender’s chief economist Michael Grahn said, who added he expected to see the figure decrease in June as the tour moved on.
Trudeau’s plea to Taylor
Swift is reportedly having a similar impact on local economies, with research company QuestionPro estimating the Eras Tour could generate $4.6 billion in consumer spending in the U.S. alone.
The figure is drawn from $1,300 price tag that, on average, fans have spent in categories including tickets, travel and clothing in order to attend the shows.
It’s perhaps no wonder that the Prime Minister of Canada, Justin Trudeau, has directly appealed to the Nashville-based singer-songwriter to come to his country.
Replying to a tweet from Swift about new tour dates in Europe, Trudeau—making various references to Swift’s lyrics—replied: “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.”
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.
— Justin Trudeau (@JustinTrudeau) July 6, 2023
Not everyone’s sold
Between sky-rocketing housing costs, increased energy and food prices and interest rates increasing, not all economists are convinced concerts are a big enough factor to shift the dial of inflation.
Philip Shaw, chief economist at Investec, told CNBC Make It: “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.
“I suspect that there is an impact on inflation overall from concert prices becoming more expensive. That’s not necessarily due to one particular artist.”