How Taylor Swift’s Tour Transformed Local Economies and STR Markets

This summer, a wave of excitement swept across cities, spearheaded by none other than Taylor Swift. Her Eras Tour wasn't just a series of concerts; it was a phenomenon reshaping local economies. Beyond the pulsating arenas and hit songs, Taylor's presence sparked a remarkable surge in spending, ranging from travel and dining to an array of concert-related expenditures. 

How did we calculate the ‘Taylor Swift Effect’?

Who knows, if she never showed up, what could've been? What would the landscape have looked like then? To gauge Taylor Swift's true impact on the STR markets, we embarked on a detailed analysis. 

For our analysis, we averaged nights stayed and booked rate for matched days in the week prior and the week after the concert as our baseline for comparison. 

With our baseline performance metrics for nights stayed and booked rate, we were able to calculate revenue made from additional nights being booked (demand premium) and revenue made from STR hosts being able to charge more per night (ADR premium) due to Taylor Swift being in town.

We looked at revenue impact for all 20 cities that Taylor Swift visited and incorporated data from all short-term rentals in the metropolitan statistical area (MSA) of each city. We calculated revenue lift for all concert nights as well as the night prior to the first concert in each city. 

Taylor Swift’s impact in the US totaled $27.3M

Beyond our wildest dreams, Taylor Swift’s total revenue impact on short-term rentals is $27.3M in the United States. 

The revenue impact of Taylor Swift varied greatly from city to city. Topping the charts was Los Angeles, which hosted six concert nights at SoFI stadium and brought in $6.5 million in additional revenue for short-term rentals. Eight other STR markets also saw six-figure boosts from the Eras tour, with some of the more notable being Nashville ($3.8M), Phoenix ($2.7M), and Houston ($1.8M).

Across all 20 cities, the large majority of revenue lift was driven by greater demand for STRs during concert weekends. Revenue from demand premiums totaled $20.5M for the entire Eras Tour, making up 75% of the total revenue impact the Eras Tour had on STR markets. In contrast, revenue made from ADR premiums was $6.8M (25% of total revenue impact). 

Demand premiums were the largest drivers of revenue lift in Atlanta, Jersey City/Newark, and Houston, where lack of ADR hikes during the Eras tour resulted in demand premiums making up more than 90% of total revenue lift in all three cities. The only city where ADR premiums were the biggest driver of revenue lift was Chicago. Revenue from ADR premiums totaled $515K, while revenue from demand premiums only totaled $158K.

All in all, while some markets like New Jersey/Newark and San Jose/Santa Clara experienced more modest increases, the overall picture is clear: Taylor Swift's tour left an indelible mark on the STR landscape across the United States.

The 'Taylor Swift Effect' not only underscores the economic influence of cultural events but also highlights the potential of STR markets to respond dynamically to such phenomena. It's a testament to the power of music and celebrity to transform local economies and an eye-opener for investors and market watchers alike.

Nashville among the biggest hotspots

Perhaps the city that was most enchanted by Taylor Swift was Nashville, Tennessee. Taylor’s three-night stint in the Music City raked in $3.8M in additional revenue for short-term rentals in the Nashville-Davidson-Murfreesboro-Franklin MSA, more than half the revenue impact that Taylor Swift had in Los Angeles, underscoring Nashville's deep connection with music.

Within Nashville, short-term rentals in downtown and South Nashville saw the biggest demand and ADR boosts, enabling $1.6M in total revenue lift. North Nashville and East Nashville were also popular among Swifties, with revenue lift totaling $743K in East Nashville and $548K in North Nashville. While not as popular, Midtown/Green Hills and West Nashville both felt sparks fly with Taylor Swift’s concert presence bringing in an additional $186K in revenue in West Nashville and $108K of revenue in Midtown/Green Hills.

When Taylor says she can make the whole place shimmer, she isn’t kidding. The Taylor Swift effect wasn’t just felt in the areas immediately surrounding downtown; it was felt throughout the surrounding Nashville metropolitan area and in neighboring cities. Swifties looking for better rates during the concert weekend expanded their search in all directions.  The most popular of the surrounding cities was Franklin, where revenue lifted totaled $111.5K, mostly from additional nights booked. Other demand hotspots that saw significant revenue lifts included Murfreesboro ($48.7K), Mount Juliet ($44.5K), and Hendersonville ($38.9K). 

Are you ready for it? It’s going to be a cruel summer in Europe next year

The Taylor Swift love story is about to begin again. Next summer, the Eras Tour is headed to Europe, and demand on the books is all pointing to it being another blockbuster success that will leave us breathless. The Eras Tour in Europe will cover 18 cities with a total of 48 concerts and is already setting the stage for an extraordinary surge in short-term rental demand.

Current demand on the books has gone through the roof, up more than 1000% compared to last year in some European cities. Swiftie fans in Vienna are showing their loyalty in numbers, with current demand serendipitously up 1989%. The huge spike in demand on the books compared to last year for Eras tour dates in Warsaw (+2020%), Milan (+1237%), Munich (+866%), and Hamburg (+758%) is proof that this love is not a fairytale.

The story continues in the UK, where cities like Edinburgh, Liverpool, Cardiff, and London are experiencing triple-digit surges in demand. As STR operators and investors, these trends offer a glimpse into the future and present a unique opportunity to understand market dynamics and consumer behavior in response to such events.

The Impact on STR markets across continents

Looking ahead at the upcoming European leg of Taylor Swift's Eras Tour, a fascinating trend emerges when comparing booked rates with current available rates. This disparity offers a glimpse into the savvy of Swift's fans and the responsiveness of STR hosts. In cities like Lisbon and Madrid, current available rates have nearly doubled compared to what early birds paid, while in Edinburgh and Stockholm, they've more than tripled. In short, the anticipation surrounding this global music phenomenon is leading to hosts raising their rates.

The lessons learned from the tour's staggering success in the U.S. are clear and far-reaching. Taylor Swift's influence extends well beyond the concert venues, permeating local economies and STR markets. For investors, hosts, and market watchers, the tour presents a unique opportunity to learn, adapt, and capitalize on the dynamism of the STR market. 

If you’re a host who’s considering joining the STR market in anticipation of the Eras Tour or have yet to adjust your rates, here’s a crucial piece of advice: be ready for it. The “Taylor Swift Effect” is a powerful economic force that isn’t going out of style.