Katy Perry's concert in Singapore is highly profitable. Analysis: It boosts the economy but may lead to short-term price increases

Chen Dade said in an interview with Lianhe Zaobao: "These simultaneous events can contribute to the local economy beyond just the concerts; however, issues like full hotels and high room rates will limit the spillover effects of these large events."

American pop diva Lady Gaga returns to our country after a 13-year absence, holding four exclusive Mayhem tour concerts in Singapore from last Sunday (May 18) to this Saturday (May 24), expected to attract 200,000 attendees, which is fewer performances and attendees compared to Taylor Swift, who opened her concert in Singapore last year. Ticket prices range from SGD 148 to SGD 1,348, slightly higher than Taylor Swift's.

The "Little Red Dot" of Asia has welcomed American pop queen Taylor Swift and Lady Gaga for exclusive concerts for two consecutive years, causing fans to go wild and flock to Singapore, expected to bring up to SGD 750 million in economic contributions to the city-state.

In terms of accommodation, the benefits brought by the two divas' concerts are even more astonishing. Taylor Swift's concert pushed hotel occupancy rates up by an average of 40%. Now with Lady Gaga's concert, the occupancy rates of serviced apartments near the National Stadium under Far East Hospitality Trust, as well as some luxury hotels, are expected to soar above 95%, with prices also rising by 20% to 40% compared to usual rates.

Overall, Taylor Swift's concert is estimated to contribute SGD 300 million to SGD 500 million to Singapore's economy; Lady Gaga's tour is expected to generate lower revenue, estimated at SGD 200 million to SGD 250 million.

In addition to the direct benefits mentioned above, Chen Dade, Chief Strategist for Asia at Amundi Wealth Management, believes that the concert economy can also indirectly benefit sectors like laundry services and finance, thereby strengthening economic demand and stimulating local wages, which in turn drives consumption.

OCBC Bank's Chief Economist, Selena Ling, responded to Lianhe Zaobao's interview, saying: "China's economic indicators in April reflect weak local consumer demand. Therefore, I speculate that Lady Gaga's concert will have a minimal impact on Singapore's travel, accommodation, and entertainment sectors, and will not cause significant changes to the overall economic growth outlook."

Analysis: Concert Economy Boosts Consumption but May Trigger Short-term Price Increases

However, the spillover effects of concerts ultimately depend on the number of performance days, the capacity of the audience, and ticket sales. Additionally, it is worth noting whether there are other events in the city during the concert period, such as large conferences or exhibitions.

Concerts Drive Demand for Flights and Accommodation

American pop star Taylor Swift performed in Singapore for six days in early March last year. This was the exclusive Southeast Asian stop for The Eras Tour, selling approximately 300,000 tickets, with prices starting at SGD 88; the highest VIP package reached SGD 1,228, with additional sales at one point

Extended Reading

Interviews with analysts and related reports indicate that concerts, which carry the star halo, have a significant contribution to various local economic aspects and also have indirect chain effects. However, they may also lead to short-term price surges, thereby limiting the spillover effects brought by large events.

According to a report from Tiger International and previous data, overseas fan ticket purchases for the two pop divas generally stimulated a 20% increase in flight bookings, with notable growth in routes to Manila, Jakarta, and Bangkok during Taylor Swift's tour; while Kaká's tour is expected to see significant growth in routes to Japan and Australia. The largest source of tourists to our country last year—China—was not mentioned.

He also reminded that the concert economy may lead to short-term price increase issues. The first to be affected is hotel room prices; for example, the Singapore Formula 1 (F1) event, which usually takes place in September, is also the month with the highest average room rates (ARR) locally. Depending on the time and location, there is also a significant risk of increased transportation costs during the concert period in the Lion City.

In retail, Taylor Swift's concert has a relatively significant stimulating effect on small businesses, such as clothing and accessory retailers, bringing about a 30% increase in sales. Travel-related bookings, including retail and dining, surged 2.75 times year-on-year. As for Kaká, some local real estate investment trusts (REITs) in shopping malls are eyeing revenue growth of 7 to 10 million dollars