Astronomical hotel prices, fully booked restaurants: Singer Adele’s concert series also moves Munich economically. But how lasting is the effect – and does it affect all of Germany?
Anyone looking for a hotel room in Munich for August 2nd will be amazed at the moment. Not that Munich has ever qualified as a cost-effective metropolis – but the fact that the simplest standard rooms on the booking portal Booking.com only start at 158 euros is unusual even for the Bavarian capital. If you’re looking for a little more comfort and proximity to the city center, an overnight stay can easily cost 300 euros or more. Things are no different on August 3rd, nor are they on eight other dates in August. The reason behind it is simple: the singer Adele is in town and is playing ten concerts there.
It is not unusual for individual pop stars as well as sporting events and trade fairs to increase hotel prices. Price ultimately balances supply and demand. The demand for hotel rooms is variable, but the number of hotel rooms is not. The lubricant is prices. If these increase, the demand for better hotels decreases. More price-sensitive people move to the outskirts or stay at home. This is how economics works, both large and small.
Beyoncé drives inflation in Sweden
In recent months, however, the extent to which individual artists have an influence on the economy has increased enormously. Not just locally, but sometimes even economically. The singer Beyoncé is said to have been responsible for almost 0.3 percentage points of Sweden’s inflation rate last May. Economists have already coined the term “Swiftonomics” for megastar Taylor Swift because her tours affect entire economies. The same thing could now happen with Adele in Munich – i.e. “Adelenomics”.
The more exclusive the events are, the more noticeable the effects are. Beyoncé started her “Renaissance” tour with two concerts in the Swedish capital Stockholm. Up to 46,000 fans are said to have attended each of these events, thousands from overseas, including hundreds without tickets. As a result, the prices for tourist services have risen noticeably. However, Beyoncé fans have not only driven up prices on hotels and popular leisure options, but also on local restaurants and even clothing. Michael Grahn, chief economist for Sweden at Danske Bank, calculated a Beyoncé effect of almost 0.3 percent in inflation for May 2023.
Taylor Swift, who will be coming to Germany this summer, is experiencing similar developments: high hotel prices, astronomical ticket prices on the secondary market and the first restaurants that are fully booked – six months in advance. In the USA, “Swifties”, as many of the singer’s fans call themselves, spend an average of $1,300 when attending a concert. For tickets, hotels, restaurants, merchandise and much more. As a result, her US tour alone is said to have triggered consumer spending of an estimated $4.6 billion last year – more than the economic output of 35 of the 50 US states.
No “adeleflation”
And yet the effects will be different for Adele than for Beyoncé in Sweden. “Inflation, for example, will not rise because Taylor Swift or anyone else comes into the country,” Felix Herrmann, chief economist at asset manager Aramea, told Capital. The situation in Sweden and Germany cannot be compared. “Sweden is much smaller than Germany. Any events such as Beyoncé’s tour start would not be measurable in our numbers.”
Basically, the economic effects of pop stars are overestimated, says Hermann. Taylor Swift’s concerts in the USA also show this. Because the concerts there didn’t change anything in terms of GDP or the inflation rate. This is mainly because the expenses for tickets etc. are so-called “displacement spending”. A temporal and regional accumulation of consumer spending. People therefore prefer to spend more time if they pay several hundred euros for tickets, hotels and restaurants. In return, they spend less throughout the rest of the year. An effect on the inflation rate would therefore only be temporary and would only create a base effect.
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In practical terms, this means: If you were to determine a regional inflation rate for Munich only and Adele moved it up by 0.2 percentage points in August, for example, it would go down by exactly 0.2 percentage points in August 2025. Assuming Adele doesn’t play the same series of concerts with the same crowds next year.
An effect is only noticeable with recurring events
This is exactly where the crucial point lies as to whether a pop star, a sporting event or a trade fair has a lasting effect on the economy. They must be recurring. One-off events bring little to a region. The people of Munich spend the money they raise elsewhere. This also applies to foreign visitors, whose consumer spending influences the German foreign trade balance. In return, consumer spending will then stop at home. Ultimately, globally it is the same zero-sum game.
“This temporal and regional relocation of economic effects is not something that you as an economist look at and say: Oh yeah, something very special is happening here,” says Herrmann. “At best, this is a nice party theme.”
Little impact on the Munich location
The situation is different if the income is invested in Munich. If a location like Munich, for example, manages to attract well-known artists on a long-term basis, or if the football club 1860 Munich is promoted to the 2nd Bundesliga and has to expand its beloved stadium on Grünwalder Straße, then investments are necessary. New hotels are being established, roads and train stations are being built, and jobs are being created. All of this leads to more productivity in a region and ultimately to an increasing growth path. “In the long term, growth is not increased through consumption, but through investments,” says economist Hermann.
It is not yet possible to predict whether any real investments will take place around the Adele concerts. The city and the Munich Economic Development Agency left Capital’s corresponding inquiries unanswered. The exhibition center in Munich is being rebuilt for Adele and an open-air area is being created. But the area will ultimately be largely dismantled. And thanks to the Oktoberfest – which incidentally triggered huge investments – the region already has most of the materials for setting up and dismantling the location.
Source: Stern
