Two concerts in Stockholm vaulted hotel and restaurant spending into single biggest upside influence
Sweden’s inflation rate came in hotter than expected in May, but for once it perhaps wasn’t the cost of putting a roof over your head or food on the table that was driving up the cost of living, but something entirely unexpected: Beyoncé.
Sweden’s core inflation rate came in at an annual pace of 8.4 per cent in May, the country’s statistics agency reported this week (new window). That was down from the previous month’s level, but well up from what economists were hoping to see — and a big reason why was an unexpected uptick in spending on hospitality services and various other miscellaneous recreational and cultural activities.
Spending on restaurants and hotels increased by 0.3 per cent in May alone, which was the single largest influence on the overall increase in the rate.
That had many policy-makers scratching their heads as to what, exactly, warranted all the socializing, and one economist with a Danish investment bank came up with a novel explanation: It was Beyoncé’s fault.
The music icon launched her world tour with two concerts at the Friends Arena in Stockholm on May 10 and 11. The sold-out shows saw nearly 50,000 people flock to each one, with fans from around the world, including Canada, flying in (new window) to take advantage of favourable exchange rates against the Swedish krona (new window).
Spending surge
For a city of under a million people, the crush of potentially more than 100,000 members of the Bey-hive caused restaurant business to boom, and hotel rooms were sold out even far beyond the outskirts of the city.
The tour, which will make more than 50 stops, including three in Canada later this summer (new window), is estimated to have a total economic impact of more than $2 billion US. And Michael Grahn, chief economist with Danske Bank, said the impact of all that spending is already being felt.
Beyoncé’s start of her world tour in Sweden seems to have coloured May inflation,
he said on Twitter. How much is uncertain, but probably 0.2 of the 0.3 percentage points that hotels/restaurants added.
A 0.2 per cent uptick in recreation spending was likely also related, he suggested.
- How pop stars like Beyoncé and Taylor Swift are embracing the social media concert (new window)
- Beyoncé announces 2023 Renaissance tour including 3 Canadian shows (new window)
Genevieve Roch-Decter, CEO of Toronto-based investment firm GRIT Capital, said the idea isn’t far-fetched. It’s almost like she’s the one controlling the economy, not the central banks,
she told CBC News. You can’t make this stuff up.
Visit Stockholm, the city’s tourism agency, called the phenomenon “the Beyoncé effect” last month (new window), noting that the majority of hotel bookings were taken from visitors from the U.K., Germany and the United States.
Swedish investment bank Swedbank noted that (new window) spending on recreation and culture grew by 15 per cent compared with the same week a year earlier, mainly driven by increased spending on tickets to theatres and concerts.
Temporary bump
Strange though it may be to believe, tens of thousands of Beyoncé fans getting into formation to open their wallets seems to have been enough to juice the country’s economy, at least temporarily. And it’s not entirely without precedent.
Last fall, Statistics Canada observed an almost five per cent uptick in spending (new window) on performing arts, spectator sports and related industries in October 2022. The reason for the surge was a perfect scheduling storm, as the Toronto Blue Jays had three games from April rescheduled to October, and the team played two more wild card playoff games.
Also, a late start to the National Hockey League pre-season in September contributed to a higher than usual increase in attendance in October,
the data agency said.
While that spending blip was as short-lived as the title aspirations of Canadian pro sports teams that year, time will tell if Beyoncé-related spending has more staying power.
Pete Evans (new window) · CBC News
