Australian swifties are queuing for hours online to nab tickets to Taylor Swift's ‘Eras’ Tour.
The buzz harks back to the pre-pandemic era when live shows were a major part of the entertainment industry and a significant contributor to consumer spending and state tourism.
By the end of this week, many will have spent upwards of a month’s rent on just one ticket to see the pop sensation – all against a backdrop of high inflation and reports that cost of living pressures have radically dampened discretionary spending.
With the current economic environment characterised by rising inflation, increased taxes, and wage stagnation, such consumer behaviour might seem counterintuitive, especially when Tay Tay's tickets can cost up to $1249.90 in Australia (that’s for the VIP experience, naturally).
This underlines the importance of understanding that consumer spending patterns are not solely dictated by macroeconomic conditions, considering the music events market has a projected market volume of AU$1.00 billion in 2023, according to Statista.
Despite monetary struggles, consumers still place a high value on experiences – unlike household goods or luxury items, punters are willing to allocate discretionary income towards memory-making moments even in rough fiscal circumstances, and will continue to do so over the coming years, with the music events market expected to show an annual growth rate of 3.07%.
The power of Taylor Swift’s stardom and the FOMO phenomenon is enough to tempt even struggling consumers to put themselves behind for weeks or even months to get that one perfect concert moment. Consumers clearly aren't willing to give up on experiences after the pandemic, seeing travel and experiences as essential in this new post-lockdown world.
Jetstar and Qantas Airways (ASX:QAN) Ltd also recorded an increase in demand for flights to Sydney and Melbourne when concert dates were first announced, demonstrating the power one performance can have on an entire state’s tourism industry.
Of course, there are also potential drawbacks to a Swift splurge, as demonstrated by Beyonce’s appearance in Sweden earlier this year.
Bey’s May concert caused such a demand for hotels and restaurants that it influenced Sweden’s inflation for the month, which came in higher than expected at 9.7% (due to the rising prices of hotels and restaurants to cater to concertgoers’ demand).
With Taylor being a performer of similar calibre and following, the next inflation reading could carry a Swift-sized bump along with it.
Written by eToro market analyst Josh Gilbert