As the baby-boomer generation starts to retire and younger families are having fewer children, Social Security will face significant challenges in maintaining financial stability and providing expected benefits to future retirees.
Not only did Taylor Swift’s Eras Tour impact local economies across the nation, but she managed to reach new heights through music and performance. The Eras Tour kick-off in Glendale, Arizona on March 17, 2023, brought 150,000 fans to the city, just over 1.5 times the number who visited the city one month prior for the Super Bowl.[1] Her concerts over the summer of 2023 were estimated by Bloomberg to have added $4.3 billion to the U.S. gross domestic product.[2]
Aside from ticket purchases, the Eras Tour concertgoers expanded their purchases outside the stadium as well. Merchandise, hotel, airfare, and restaurants were all part of the complete package for those flocking to see Taylor onstage. With fans buying friendship bracelets and themed era outfits, even small local businesses and individuals selling on Etsy and eBay became an integral part of the economy affected by Swift’s impact. The Federal Reserve Bank of Philadelphia’s Beige Book noted that May saw the highest revenue for hotels in the Philadelphia region since the beginning of the pandemic as a result of the Eras Tour concerts that same month.[3]
Taylor Swift’s tour was not the only must-see event of the summer. Beyonce’s Renaissance Tour was also a strong force on the economy. Her world tour is the highest-grossing tour by a woman, according to Billboard.[4] Fans flocked to her stadium tours in Europe and the United States dressed in silver themed outfits for Virgo season.
Not every community was on the list for these larger-than-life stadium concert events. However, regions large and small all over the United States want tourism dollars spent locally. Those opportunities are not as simple as a promoter deciding the locations and dates of global tours. Sometimes, communities must build support around a specific project, especially if it requires financing for new venues. In this case, an economic impact study is a useful tool to emphasize the benefits in areas where opportunity exists. The economic impact analysis can provide perspective for community stakeholders to understand why a tourism project is beneficial for local growth.
As an example, we can use the $48 million direct spending from tickets, hotels, airfare, transportation, parking, food, drinks, and retail purchases, estimated by the Cincinnati USA Regional Chamber, from the two Eras Tour concerts[5} in June 2023 to estimate the total dollar impact on the region. The table below shows the multiplier effect in terms of employment, compensation, and sales/output. Direct effects are jobs, salaries and event sales specifically created or gained from the event. The additional jobs created that are indirect (contractors or hires related to but not directly hired by the venue) and induced (jobs formed in a trickle-down effect because of spending from wages paid to workers involved in the event) build a wholistic picture with the direct effects to see how the events support the local economy. Based on that calculation, it’s estimated the total impact on employment was 590 direct jobs with an additional 172 indirect and induced jobs. Using the same formula, you can see that pay compensation almost doubled when considering the indirect and induced impacts. Sales impacts almost doubled with an increase of $36 million induced spending as well.
Utilizing the multiplier effect from the economic impact analysis helps key stakeholders understand how the numbers add up. For every one job directly created to support the Cincinnati concerts, approximately 30% more indirect and induced jobs were then created.
Although we used a metropolitan statistical area in this example, economic impacts can assessed at a state, regional or local level. Within JobsEQ, you can explore a specific industry or a group of industries with assumptions of growth between direct, indirect, and induced impacts. Another feature in the tool is the ability to specify a city or county within an MSA to examine how the overall impacts spread throughout the region. You can compare other locations to see changes in employment, compensation, and sales impacts because as we know, no two communities are the same. For an even more in-depth analysis, Chmura staff provide custom consulting services to help clients better understand how development projects, tourism opportunities, special events, or other significant projects can create a greater impact on the economy.
--------------------------------------------
[1] Source: Super Bowl LVII had $1.3 billion economic impact in Arizona, committee says (azfamily.com)
[2] Source: Taylor Swift Hits Billionaire Status as Net Worth Surges With Eras Tour Success (bloomberg.com)
[3] Source: Federal Reserve Bank of Philadelphia_The Beige Book_June 2023
[4] Source: Billboard - Beyonce Monthly Touring Record
[5] Source: Spectrum news - Swifts shows mean millions of dollars for Cincy economy
Households with student loan debt will be rethinking spending and saving priorities, and those changes will ripple throughout the economy during this...
As the baby-boomer generation starts to retire and younger families are having fewer children, Social Security will face significant challenges in...
The government shutdown just became more tangible. Several federal agencies remain unfunded, leaving 800,000 workers missing out on wages that were...