Why the US Fed Mentioned 'Taylor Swift' in the Beige Book: "Reviving the Local Economy"

'Swiftnomics' Momentum... Hotel and Ticket Prices Rise
Concert Revenue Expected to Surpass $1 Billion for the First Time

Taylor Swift, a 30-something American singer-songwriter, is touring worldwide this year and has influenced the global economy to the extent that the term 'Swiftonomics'?a blend of 'economics' and 'Swift'?has emerged. The U.S. Federal Reserve (Fed) even mentioned Swift in its Beige Book, acknowledging that the Swift craze is having a significant economic impact.

With concert tour revenues expected to surpass the $1 billion (approximately 1.27 trillion KRW) mark, setting an all-time record, Swift has become a key factor in revitalizing local economies, drawing considerable attention to the economic effects she generates.

American singer Taylor Swift [Photo by AP Yonhap News]

◆ "Highest hotel revenues since the pandemic"…Revived local economies

The U.S. Federal Reserve (Fed) mentioned Swift by name in its Beige Book released on the 12th (local time). The Philadelphia Federal Reserve Bank analyzed, "Despite a slowdown in overall regional tourism recovery, Philadelphia's hotel revenues in May reached their highest levels since the pandemic," attributing this to "the influx of tourists coming to see Taylor Swift's concert."

From May 12 to 14, Swift held her concert tour, 'The Eras Tour,' in Philadelphia. The Philadelphia Fed explained that the tour significantly increased the number of tourists, boosting hotel demand and uplifting the local economy. This was interpreted as having reversed the economic downturn in the region following the COVID-19 pandemic.

This is not the first time Swift's The Eras Tour has been credited with revitalizing local economies. Swift, who commands a powerful fan base mainly among the MZ generation, attracts a flood of tourists to the cities where she performs.

United States Federal Reserve System
[Image source=Reuters Yonhap News]

From July 2 to 4, The Eras Tour took place in Chicago, where public transportation usage across the city reached its highest level since the pandemic. Analysts estimated that an additional 43,000 rides occurred during this period alone.

Hotels in downtown Cincinnati, where concerts were held from July 30 to August 1, recorded a 98% occupancy rate. A Cincinnati city official told NBC News that total hotel revenues in the city due to Swift and The Eras Tour exceeded $2.6 million, while total hotel revenues in Hamilton County surpassed $5.3 million.

Because of such effects on local economies, Canadian Prime Minister Justin Trudeau faced criticism for commenting on Swift's Twitter post, asking her to perform in Canada as well, which was seen as a thoughtless act during the worst wildfire season.

◆ Ticket and hotel prices soar…Inflation rises, 'Tourflation'

While a single concert can revive local economies, this phenomenon also means that local prices rise. For central banks, which have been raising interest rates sharply since the pandemic to curb inflation, such short-term price increases can be a complicated issue.

The term coined for this is 'Tourflation.' It refers to the phenomenon where demand for hotels and other services increases due to concert tours, causing prices to rise and local inflation to surge.

[Image source=EPA Yonhap News]

Swift's concert ticket prices average $254, among the highest in the industry, and many fans willing to pay premiums resell tickets. According to EuroNews, tickets for the July Seattle concert on resale platform StubHub exceeded $1,200, and tickets for the August Mexico City concert surpassed $500.

Klaus Baader, Global Chief Economist at Soci?t? G?n?rale, recently told CNBC, "What surprised me was not only the high cost of concert tickets but also that everything around it has become more expensive," explaining that "prices for beer, cider, Coca-Cola, and hot dogs have all surged."

Not only Swift but also Beyonc?, who started her 'Renaissance Tour' in Europe earlier this year, has influenced hotel and cultural-related prices in countries like Sweden and the UK.

There is also analysis that the series of large-scale concerts held since the pandemic has fueled Tourflation. Baader noted, "People haven't been able to attend concerts for a long time, and artists haven't toured extensively either, so the scale and duration of individual tours are really large. Many are willing to pay higher prices."

◆ First-ever $1 billion revenue forecast in U.S. concert history

Swift's activities are attracting worldwide attention. In particular, she is expected to set a historic record by generating over $1 billion in concert revenues in the U.S. this year for the first time.

According to The Wall Street Journal (WSJ) and others, Swift is projected to surpass $1 billion in concert earnings this year, breaking the long-held record for highest tour revenue in U.S. concert history previously held by Elton John. WSJ reported that John has earned $887 million from concerts held from 2018 through this year.

American singer Taylor Swift performing [Photo by EPA Yonhap News]

Considering various complex factors, WSJ estimated that Swift's earnings from ticket sales for this tour alone will be approximately $300 million to $500 million.

Swift has performed 52 shows in the U.S. through August and plans 54 overseas shows this year. Including the final concert scheduled next summer in London, UK, she is expected to perform a total of 106 shows.

Foreign media praise Swift not only for her outstanding songwriting and composing skills but also for her exceptional networking abilities across the music industry and business acumen beyond her years, which have contributed to her blockbuster success. She even contributed an article to WSJ, demonstrating her deep understanding of the industry.

Born in 1989, Swift began her music career at age 11, debuted in 2006, and has won the Grammy Award for Album of the Year three times?in 2010, 2016, and 2021. She has sold over 200 million records worldwide and holds the record as the most-streamed female artist on the music streaming service Spotify.

Previously, in 2014, Swift drew global attention by halting her music supply to Spotify, accusing the platform of not paying fair royalties. At that time, she emphasized, "Music is art, and art is important and rare. Important and rare things have value, and things with value deserve to be treated accordingly."

She encouraged fans to purchase CDs or download her music instead of streaming, preventing streaming services from earning more than artists. Eventually, after negotiations, streaming supply resumed.

Regarding this incident, Alan Krueger, a Princeton University professor and former chairman of the U.S. Council of Economic Advisers under the Obama administration, called Swift an "economic genius" during a podcast introducing his 2019 posthumous work, 'Rockonomics.'

This content was produced with the assistance of AI translation services.