Taylor Swift Eras Tour arrives in Europe and ignites hotel room prices
With Asia all wrapped up, Taylor touches down in Europe soon and, if anything, the Swift effect is even bigger for many European cities than any of her previous legs.
In this blog post, we dive down even deeper than before into how the Taylor Swift phenomenon can shift the dynamics of a local market like no other music star; why smaller markets are seeing triple-digit boosts to posted rates, and how events of this scale interact with local accommodation supply.
Hoteliers aren’t holding back when it comes to room rates
Overall, the arrival of Swift is positive for pricing in every hotel market we look at, although the level of variation from destination to destination can be quite extreme, for reasons we will discuss later.
Given that this most mammoth of tours stops at an impressive 18 European cities for a combined total of 51 shows, we have condensed the analysis somewhat to show the effect Swift has on local markets.
We compared rates when the tour is in town to a combined average of posted prices for the same days a week before and after Swift is the city in question.
We can see that the effect on hotel room pricing in some cities is staggering. Most visitors are solely interested in the event's tour within the specified dates, with limited spillover demand.
However, the effect is not universal and there is massive variation between locations.
These go from a more than threefold increase for Warsaw and a more than doubling compared to adjacent weeks in Stockholm and Liverpool, to very limited bumps of +9% in London and +5% in Paris.
Overall, the median increase in rates for a standard hotel room compared to those nearby weeks was 44%, which is a huge boost to local hotel rates and indicative of the continuing star power Swift has in every geography she has visited so far.
In general, the wider trend is for the larger tourism markets to be noticeably less price-sensitive than less commonly visited cities.
Powerhouses London, Paris, Madrid, Lisbon, Amsterdam and Milan all sit in the bottom half, while smaller markets are much more likely to see a major boost. Cardiff is a noticeable outlier here, but Swift has only one date in the city, which is unique not just in the European leg of the Eras Tour but the complete global list of stops. This reduces the overall effect on local pricing.
We will go further into what drives this disparity later.
Short-term rentals appear to be substantially less price-sensitive
When it comes to Short-Term Rentals (STRs), the pricing gains are much less substantial in general, likely reflecting a lower price sensitivity than within the hotel industry, especially where supply for tourism accommodation is high overall.
However, the top and bottom of the chart for price growth as a result of the Eras Tour are broadly similar, showing that it is largely the magnitude of change that varies between hotels and STRs rather than totally different forces at work.
Once again, London (-3%), Paris (0%), Amsterdam (+4%), Lisbon (+5%) and Milan (+6%) all bring up the bottom of our chart and, remarkably, London actually sees falling STR rates during the tour compared to surrounding dates.
At the other end of the scale, Liverpool (+149%), Warsaw (+53%), Edinburgh (+30%), Stockholm (+22%) and Hamburg (15%) also see strong relative positive change that is similar in ranking to hotel counterparts.
Dublin and Liverpool are the only locations where STR pricing rises more strongly than for hotels in percentage terms, and the differences are often substantial.
There is a 101-percentage-point difference between the increase for hotels and STRs in Warsaw and 97 points in Stockholm, at its most extreme level.
This divergence, and the difference being highest in two of the most positively affected hotel markets, show more aggressive strategies from hotels overall and more optimization for key dates, especially when accommodation supply is highly limited overall.
This may be due to the characteristics of the properties, with hotels offering more convenience and often better located for the very short stays, typical for those attending the concerts.
A deeper dive into the most affected European hotel markets
Focusing on the top performers of Liverpool, Stockholm and Warsaw allows us to see what is driving their particularly exceptional pricing performance across both hotel and STR segments.
In all three, a large amount of the potential stock has already been booked, but these are not especially large markets when compared to the other cities that comprise the European tour stops.
Furthermore, in the case of Stockholm and Warsaw, forward demand indicators remain very strong, allowing hotels to continue the upward trend and suggesting more room for rate increases in the future.
Firstly, if we try to get an impression of how many rooms have already been booked through the share of unavailable hotels, in all three cases a very large portion of the inventory is either already reserved or being held up.
The share of properties not listing any inventory at the peak point of demand during concerts is 34% in Liverpool, 48% in Warsaw and a staggering 80% in Stockholm, even with two-and-a-half months to go to the opening night at the time of writing.
Compare that to Paris, where Swift’s time in the city causes only a modest bump in rates, and the share of unavailable hotels sits at 16% at its highest.
There is then substantial demand chasing a reduced pool of inventory in these cities, which do not have a massive number of rooms at least compared to the major European tourism destinations Swift will be visiting elsewhere.
Warsaw and Stockholm both have a little shy of 20,000 hotel rooms, while Liverpool is noticeably smaller, with between 7,500 and 8,000 hotel rooms in total, which helps to explain why it is seeing such high rates even at a lower level of sold-out inventory.
These factors have pushed these markets to post much higher room rates compared to nearby dates and the rest of the year.
Furthermore, there may be room to go even higher, as forward searches indicate that there are still plenty of fans looking to find themselves a bed for the night during the key dates.
In both Stockholm and Warsaw, the Eras Tour dates mark by far the highest point for searches being made over the next six months, especially in the latter’s case, even though it is the furthest out of these three cities.
That kind of interest is why prices have continued upwards over the last 30 days as of the time of writing. Compared to a month ago, hotel rates have risen 2.9% in Warsaw and 5.4% in Stockholm, marking them out once again as two of the stronger markets in the European leg for pricing growth.
Supply and demand dictating hotel room rates
We’ve covered the Swift effect in detail through each leg of her tour, and we have noted across the analysis that the market structure is important in dictating how accommodation reacts to the demand spike.
Therefore, we dug a little deeper for this segment of the Eras Tour to give more context as to why there is such wide variation in hotel room price changes and how this may be useful for revenue managers when considering comparable events in their own marketplaces.
When examining the effect of an event on a local hospitality market we need to consider the potential magnitude of the event, what the overall level of inbound travel will be, and then contextualize that with the supply of accommodation.
For the Eras Tour we have taken the number of hotel rooms in a local market where that data was openly available and also the overall capacity of the venues for concerts to understand the potential demand generation and the possible supply alongside the price rises analyzed above.
When we looked at purely the attendance possible (assuming a sell-out each night, which is a near guarantee for these concerts) and then the increase in rates compared to nearby dates there was no correlation.
However, by trying to give more context and dividing the potential attendance by the number of hotel rooms, we can see a relationship forming. This gives a correlation of 0.64 to price changes, making it a moderate-to-strong positive relationship.
Furthermore, when we rank the cities by this ratio, it largely conforms to the grouping of higher and lower performers, putting Paris and Madrid down at the bottom and Liverpool, Warsaw and Stockholm near the top.
Indeed, for London, the position in the chart is somewhat deceptive, as the eight tour dates are spread over two different periods of three and five nights, rather than one monster set of eight consecutive concerts.
Adjusting for just one of these stops brings London down to conform to where it ranks for price rises and increases overall correlation.
These numbers for both attendance and available supply are estimates, but we hope that this explains the mechanism at play around the emerging demand picture for these time-sensitive and critical revenue-generating opportunities.
Spotlight on: UK and Ireland
Zeroing in on the UK and Ireland leg of the tour to visualize the impact on a specific region within Europe and Swift’s concerts are clearly major points within the hospitality calendar across almost all of the destinations
In Dublin, Edinburgh and Liverpool the weeks where the Eras Tour is in town are the highest points for hotel room rates across the whole of 2024, underlining the star’s power to influence local markets.
The average weekly rates come in at EUR379, GBP473 and GBP227, respectively, which represents a boost of 51%, 74% and 74% within these cities for those weeks when compared to the annual average.
For London and Cardiff, the rise compared to the annual average rate for a standard hotel room are still respectable 25% and 48% increases.
As noted above STRs are largely less price sensitive and so the gains are less dramatic and the weeks of the concerts are not the peak pricing points for our available STR dataset for 2024 in all of the cities, with one remarkable exception: Liverpool.
As noted above, Liverpool accommodation supply is limited and this is driving a major surge in pricing. Alongside being the second smallest of the destinations we are looking at for overall hotel room supply, it is similarly limited for alternative accommodation, providing just 4,500 to 5,000 potential stays, second only to Cardiff.
Combine this with a relatively large stadium in Anfield and three consecutive days of concerts, and there is a cocktail for massive price increases. As of the time of writing STR prices were 202% above the annual average in Liverpool, and the highest of any city in 2024, at GBP625.
Comparing the price changes to the same dates a year prior and Liverpool is once again the clear leader, with a year-on-year growth in rates of 84%, underlining how limited supply is really driving a major shift in pricing strategy across the city.
London, by contrast, is at the bottom with nominal pricing growth for hotels of just 1% for the first set of concert dates and 10% during the second. This also highlights the supply dynamic as it is estimated that London may now be the world’s largest hotel market by rooms.
Final thoughts
The available data clearly illustrates Taylor Swift's economic impact and influence. Every metric paints Swift's tour as a massive event, sparking considerable demand and holding the potential to set the highest accommodation price record for the year in some of the places it visits. Especially in smaller cities that have limited accommodations.
Armed with instantaneous insights derived from industry-leading demand and rate data, you can devise an optimal pricing and promotional plan for crucial event dates in your city.
This will enable you to capture bookings ahead of your rivals and maximize your room revenue.
About Lighthouse
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