After a period of enforced cancellation, live events are back. While smaller artists and venues still struggle, big events like Taylor Swift’s world tour enjoy booming demand. Consumers are willing to splash out on the spectacular, helping cities to recover from the burden of Covid-19.
Many industries were confronted with rising costs and dwindling demand following the Covid-19 pandemic. The live events industry suffered particularly acutely during the crisis, as restrictions saw concerts cancelled, theatres closed and sports stadiums left empty.
But after years of pent-up demand, revenues from large-scale live music and cultural events have not only recovered but have even surpassed their pre-pandemic economic peak. While other sectors in the entertainment and media industry lag in terms of growth, live events have seen a sustained economic boom, driven largely by changes in consumer spending.
When lockdowns and other restrictions were imposed, frugality became the norm. Since the pandemic, costs have steadily been on the rise, and households were already in the habit of saving more and limiting spending to essentials only. Dining out, travel, and entertainment were seen as non-essential costs that had to be curtailed. Globally, live event revenues fell to just a third of pre-pandemic levels.
Even now, with spiking energy prices, costs for many smaller venues continue to rise at a higher rate than revenues, leaving event organisers with few or no profits. For smaller-scale, more frequent events, the pandemic and changing spending behaviour appears to have created an inescapable storm of increasing costs and static revenues.
In contrast, so-called premium events have experienced an extraordinary economic boom. Having endured months of isolation, consumers are yearning for the cultural experiences that they had sacrificed during lockdown. The absence of such events during the pandemic has driven up excessive demand.
Adam Pearson, the commercial director at the O2 arena in London, says the new consumer mindset focuses on ‘protecting their spend for coming to big event experiences’. This ‘selective splurging’ shows that many individuals are now more willing to invest in memorable experiences, even if it means tightening purse strings elsewhere.
Ticket prices for premium live events have risen dramatically to meet overwhelming demand. Such tickets often sell out within seconds, only to be resold at astronomical prices. The men’s final at the Wimbledon tennis tournament is a prime example, with the lowest resale ticket prices starting at £5,870 – an astonishing 2,202% increase on the face value price of £225.
Similarly, Taylor Swift’s Eras tour (with its record-breaking numbers of registration for ticket sales) has seen the lowest ticket resale prices starting at a 700% increase on face value. Ticketmaster made a statement that the Eras tour pre-sale traffic surmounted any previous peak by a factor of four. It is predicted to be the highest grossing musical tour of all time, credited by the Wall Street Journal as helping entire cities to recover from the financial burdens of the pandemic.
Not only do live events bring revenues to cities through a surge of ticket sales at local venues, but they also boost tourism. Increased foot traffic from fans can be felt far and wide for such events. A positive ripple effect spreads out to local restaurants and bars for pre- and post-event recreation. Many businesses are able to take advantage by creating limited edition, event-related products.
For example, many local bars revamped their menus to include Eras-themed cocktails such as ‘Bad Blood Sangria’ and ‘Lavender Haze Lemonade’ – demand was so high for these drinks that prices have been hiked substantially. Similarly, Glam Doll Donuts sold out of $63 boxes of Swift-themed pastries, reflecting a near 174% increase on the regular value of the basic 12-pack.
Even local attractions and hotels in host cities experience a rush of demand. In Nashville, a museum had the best month in its 65-year history thanks to an impromptu Taylor Swift pop-up exhibit. Air New Zealand experienced a ‘Swift surge’ for flights to Australia, having to put on 14 additional flights to accommodate 3,000 extra flyers. In Chicago and Minneapolis, all-time records for hotel room occupancy were broken.
Similarly, New York Fashion Week (NYFW) plays a crucial role in the city’s real estate revenue. Venues are rented for parties, presentations and runway shows, and over 180,000 professionals benefit from job creation during the event. With an annual economic contribution to the city of almost $900 million, NYFW is another example of the powerful economic effect of premium live events.
The economic impact of such events extends far beyond the participating luxury designers, pop stars or athletes. Unveilings of the latest trends hold cultural significance for consumers, who are keen to feel part of a community after the gruelling isolation of the pandemic.
For some fashionistas, this might include a flight ticket to New York; while for others, it may simply be an updated wardrobe. For some Swift super fans, it might mean shelling out on tickets for the Eras tour; and for others, it might mean watching the cinematic adaptation, bringing demand to the film industry.
Entire sectors can benefit by staying up to date with changing trends. The live events industry, for big events at least, is poised to thrive, bringing a much-needed sense of joy and connection back to communities worldwide.
