While 2022 was the year of "revenge travel", 2023 may be the year for "revenge" experiences as consumers are coming out in full force for the new "Barbie" movie and Taylor Swift's "Eras" Tour. Economic Educator, Creator, and Author Kyla Scanlon outlines how consumers are paying upwards of $1,300 to see Swift in concert, "showing us that the consumer is willing and able to spend."
When asked about the Barbie-Swift growth indicators, Fed Chair Jerome Powell even stated "stronger growth could lead, over time, to higher inflation" in turn calling for necessary monetary policy.
Scanlon notes the pent-up demand for travel and elevated savings as consumer spending searches for normalcy in the post-pandemic era: "consumer sentiment is at an all-time high [and] it's a little confusing to figure out what people are going to do."
This post was written by Luke Carberry Mogan.
BRAD SMITH: Have we entered a girl boss economy here?
Interest rate hikes were expected to slow demand and rein in decades high inflation, but consumers have been defying all that recessionary talk and continue to spend on tickets for Taylor Swift, "Barbie", and Beyonce.
Joining us now, we've got Kyla Scanlon, who is the author, educator, and creator.
Kyla, have you been to all of these events?
Have you already hit the hat trick on both "Barbie", Taylor Swift, and Beyonce?
KYLA SCANLON: I actually haven't.
No, I haven't achieved that quite yet.
BRAD SMITH: Well, some people out there are trying to do it.
[LAUGHTER] I am not in the camp that's achieved all of it either.
But what is it telling us right now about the state of the consumer?
KYLA SCANLON: It's showing that the consumer has some resiliency.
So people are willing and able to spend on big events like this.
People are spending about $1,300 on average to go to see Taylor Swift, which I think is really phenomenal and really impressive just in terms of what Taylor Swift can do.
So I think it's showing us that the consumer is willing and able to spend.
JULIE HYMAN: Yeah.
I mean, well, obviously, "Barbie" and Beyonce, to your point also, part of that phenomenon there is that propensity to spend now.
You put out a recent video where you also talked about kind of does it keep going?
Are there other-- I mean, Taylor can't.
She's not the Grateful Dead or Phish.
She's not going to tour forever, right?
So at some point, the tour is going to stop, and people won't be going to see her.
So does that mean that we're going to see spending fall?
KYLA SCANLON: Yeah.
I mean, maybe.
That's one thing that I talk about in the video.
I think there's a lot of worries around student loan debt payments starting back up and if people will be able to finance those because that's going to be a big hit to a lot of people's incomes.
And then I think Taylor Swift was definitely like a summer boost.
And "Barbie" happening at the same time, people were just like, yes, I'll go and do all of these experiences.
People really want to spend on experiences right now.
So I think it'll be interesting in the post-Taylor Swift policy era to see what happens, but there are some headwinds that I think we should be paying attention to for sure.
BRAD SMITH: What are those headwinds?
KYLA SCANLON: I think the student loan debt repayments starting back up.
I think credit card spend, you know that's always seemingly at a record high.
Real wages are finally ticking up so that could be a bit of a tailwind, I suppose, if I'm using those two terms correctly.
But yeah, I think we're just going to see consumers maybe not have as much discretionary income as they did.
Yeah.
JULIE HYMAN: Do you think that the sort of-- I also wonder like once you get the fix, I know if you're Swifty, the fix is never satisfied, right?
Like if people can go see her multiple times, they will.
But, you know, once you've done your international trip, for example, to just give another example of stuff that people are spending on, I just wondered like how long people's desires and wallets can sustain this kind of stuff?
KYLA SCANLON: Yeah.
I mean, I guess like people said that they would go and watch her again, and that they would spend $1,300 again to go and see her.
So I think there's the willingness to do it.
I do think that we'll probably see a little bit of a slowdown going back into school and going back into the fall.
But I think yeah, once you kind of have that one experience, it might be enough for a while.
But presumably consumers could go and spend on other things too like there's a lot of experiences out there.
But I do think Taylor Swift was-- that whole concert series was just such a boost to local economies.
It's really cool, I think, what she was able to achieve within each city that she visited.
BRAD SMITH: I consistently loved your whiteboard behind you every time you join us here, and I can see that you map out a lot of things here.
And so, when consumers eventually do trade down from the $1,300 Taylor Swift ticket or the $900, at least that's the price that I saw, Beyonce Renaissance Tour ticket, what do they trade down to, and who does that begin to benefit in other parts of the spending economy?
KYLA SCANLON: Yeah, I think it'd be interesting consumers end up spending on.
You know, people had more cash flow over the past few years because of the pandemic and just extra savings.
And they weren't really contributing a bunch of that to paying off debt.
They were just doing more experiences.
So I think there's still-- you know we were-- the pandemic was sort of a long time, so I think that people were locked inside for a long time, and they're still probably going to be the desire to consume and go and have experiences.
In terms of what people go and spend on, I'm not sure.
But there seems to be a desire for travel.
Like Southwest Airlines had record revenue.
Hilton was talking about how many people are going and staying at their hotels, so I think that there's still going to be people doing all of these things as long as they're able to.
Yeah.
BRAD SMITH: And then additionally here, I mean, I'm just looking behind you.
You've got travel, flights, airlines, all of this kind of travel and accommodation experience that many of us for the pent up demand that we've heard about from airline CEOs, from accommodation CEOs, that they say is still in place.
How for the consumer do they start to think about, all right, where do we kind of pull back on some of that spending as well in order to monitor where else we've got to either carve down some of that debt that's being incurred on the credit cards or just ensure that household balance sheets are still healthy?
KYLA SCANLON: I don't know.
It's kind of interesting.
Like consumer sentiment is at an all-time high.
So it's a little bit confusing to figure out exactly what people are going to do because people are feeling pretty good.
Real wages, as I said, are starting to tick back up.
Obviously, credit card debt is at an all-time high.
People are taking out loans and trying to finance different things.
So I'm not sure what that spending will shift to or if it will just sort of stay in this entertainment category.
We've seen people really choose to consume services over goods over the past few years since the world sort of reopened, so I think that trend will continue.
I can't imagine anything that-- I mean, obviously there's a lot of things that could prevent that from happening.
But I do think that is the way that the consumer tends to be going is consuming experiences right now.
JULIE HYMAN: Kyla, good to see you.
Kyla Scanlon, author, educator, and creator.
Always good to catch up with you.
Appreciate it.
KYLA SCANLON: Yeah.
Thanks for having me on.
