Beyond just a Swift lift to economy in first quarter - Major concerts can deliver long-term dividends for Singapore


Taylor-nomics: Taylor Swift fans pose before her concert in Singapore. Inbound flights have gone up by 186% and accommodation bookings shot up some 460% around the period of the superstar’s concerts in the island nation. — Reuters

SINGAPORE: It is not often that a performer can move an entire economy, but that is the case with American superstar Taylor Swift, who has kept economists busy crunching numbers on her economic impact in cities staging her concerts.

Some economists in Singapore had to rework data on the cost and benefit of her upcoming shows after Thai Prime Minister Srettha Thavisin said concert promoter Anschutz Entertainment Group told him that Singapore had offered Swift subsidies of up to US$3mil a show as part of an exclusive agreement.

In response to queries from The Straits Times (ST), the Singapore Tourism Board and the Culture, Community and Youth Ministry said tourism sectors such as hospitality, retail, travel and dining were likely to benefit from the event just like in other cities Swift has performed in. The board did not provide details of the grant or the conditions attached to it.

Erica Tay, director of macroeconomic research at Maybank, calculated that Swift’s six concerts here in March could generate S$350mil to S$500mil in tourism receipts.

“(But) to judge the value of securing her gigs solely based on the direct economic boost misses the point,” Tay told ST.

“The concerts are one-off. Their direct impact pales in comparison to the strategic value that anchoring Taylor Swift’s concerts can bring.”

These include the ability to boost Singapore’s cachet as Asia’s leading hub for world-class events. Other A-list acts are more likely to bring their tours here knowing they can reach Asian audiences from a single well-connected city, she added.

Tay believes Swift’s global influence and endorsement of Singapore’s tourism offerings will reverberate around the world. “She will play to more than 300,000 people during her concerts here, but her social media followers number 534 million.

“What she does offstage in Singapore will create enduring mindshare among a global audience.”

Swift, a 34-year-old Grammy award-winning international star, has completed the Australian leg of her Eras Tour and has arrived in Singapore for the next leg.

More than 300,000 tickets have been sold for six sold-out shows from March 2 at the 55,000-capacity National Stadium.

Toh Si Ying, an economist for Asia ex-Japan at Nomura, calculated that the concerts by Swift and British rock band Coldplay could generate around S$422.7mil in spending.

Ticket sales alone are expected to account for S$75.2mil for Swift’s shows, and S$54.9mil for Coldplay’s. The bulk of this revenue is assumed to be passed to the artists, with about S$19.5mil retained within the Singapore economy.

Toh assumed that 40% of concert attendees are tourists, staying an average of four days and spending an average of S$400 each. This would contribute S$403.2mil to tourism revenue.

Of these, 25% is expected to be spent on accommodation, 25% on shopping, 10% on food and beverage and the rest on other expenditures such as airfares and domestic transport.

The Swift concerts and the recent shows by Coldplay will contribute an estimated 0.25 percentage point to Singapore’s first-quarter gross domestic product growth, Toh said. Hospitality, food and beverage as well as retail sectors are poised to benefit the most.

A Wall Street economist calculated that the ripple effect on Singapore’s economy caused by the spending of one person – an average Taylor Swift concertgoer – is about S$1,385.

Heron Lim, an economist at Moody’s Analytics, said American cities where Swift has performed saw significant jumps in their hotels’ revenue per available room (Revpar).

“Given Singapore’s exclusivity in South-East Asia and limited rooms, even considering that March is a slower season for leisure travel, we are expecting a Revpar increase during the week hitting more than 50% compared to the March 2023 average,” he said.

Assuming that around 70% of the estimated 300,000 concert-goers are coming in from overseas and that there are two people per room over the six show nights, Lim reckons that the direct impact on hotel receipts themselves could amount to S$35mil.

“This is conservative, given that people could turn the trip into a longer one, benefiting hotel revenues even further,” he said.

Edmund Ong, general manager of Trip.com Singapore, noted that the total volume of Singapore-related bookings surged 275% during Swift’s concert period here compared with the period from March 15 to 23.

Singapore-inbound flights went up by 186%, accommodation bookings shot up around 460% and attractions and tour bookings skyrocketed 2,373%, he said.

The average age of people making bookings from March 1-9 was 33, slightly younger than the 37.2 for the March 15 to 23 period, Ong added.

Meanwhile, Japanese research firm Economic Effect.Net estimated that Swift’s four concerts in Tokyo earlier in February boosted the local economy by 34.1 billion yen.

But not everyone is convinced about the actual economic contribution of Swift’s concerts.

The star’s Sydney and Melbourne concerts were projected to have added just A$10mil to the economy, while she walked away with more than A$100mil from the Australian tour.

“There have been estimates that the Tay Tay Eras Tour would result in an extra A$140mil injected into the (Australian) economy, while others have gone up to A$500mil and even over A$1bil.

The reality, however, is that the net economic impact is likely to be much less,” KPMG Australia chief economist Brendan Rynne said in a report.

But some economists here were quick to point out that unlike Singapore, almost all the tickets for the Australian shows were bought by locals, not tourists.

Nomura’s Toh said small economies such as Singapore could see the biggest boosts from Swift’s tour, noting that “in recent years, concert tours have grown to become not just major social phenomena but also potentially a significant driver of economic activity”. — The Straits Times/ANN

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Taylor Swift , Singapore , tourism

   

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