Thank you for the comments and messages from readers regarding my article “Decoding Taylor Swift Concert Economics (see Josiah Go’s blog https://josiahgo.com/decoding-taylor-swift-concert-economics/).” I have received more questions to answer and additional information to share. Let me share some data from the perspective of Singapore.
- Thailand has been the region’s tourism leader since 2015, surpassing Malaysia. It is followed by Singapore, Vietnam, and Indonesia.
- Vietnam’s tourism has experienced the most significant percentage growth between 2011 and 2019. Based on pre-COVID data, Vietnam’s growth rate was three times higher compared to most neighboring countries in Southeast Asia (see Josiah Go’s blog “Pressing the Reset Button on Tourism” at https://josiahgo.com/pressing-the-reset-button-on-tourism/) It was close to overtaking Singapore for the third spot before the COVID-19 pandemic.
- Singapore’s number of foreign tourists doubled in 2023 compared to the previous year. However, the number of international visitors has been declining month after month between August and November 2023. By the end of the year, it reached only 71% of pre-pandemic levels in 2019. Vietnam overtook Singapore in the number of foreign tourist arrivals in December 2023, with a higher recovery rate of 80% versus the pre-pandemic level in December 2019. Singapore almost tied with the Philippines for the lowest recovery rate versus pre-pandemic levels, at around 72%.
If we analyze Singapore as an institution, its tourism market share versus competitors has been declining, and the number of visitors has been decreasing month after month in recent months. Its relative attractiveness as a country has been affected by the relative attractiveness of other countries like Thailand and Vietnam. Additionally, its prices are much higher than its competitors, its nightlife is subdued but orderly, and it has very few natural attractions due to its smaller size. Singaporeans are generally more polite and formal compared to the warmth and informality of their neighbors. What can Singapore do? Who should they attract as a target market to reverse course and regain momentum in inbound tourism?
One turnaround strategy is to look beyond their traditional strengths by offering something that is immediately doable. This can be achieved by promoting specific tourism segments, such as musical events where attendees are large and loyal to their pop icons like Taylor Swift, and will spend money while being attracted to Singapore’s wholesome nightlife. After all, the last time Taylor Swift performed in Southeast Asia was a decade ago. There have been trends in tourism suggesting a resurgence in interest in attending shows and events abroad after the COVID-19 pandemic due to pent-up demand. Combining cultural and entertainment goals as travel objectives to create more meaningful and memorable experiences, with attending shows abroad as a highlight of travel itineraries, is becoming more common.
To justify the business case of a grant, we can use the trio sequence of desirability, feasibility, and viability framework. First, Taylor Swift is extremely desirable. As a pop icon, her pulling power has been proven in many prior concerts of the Eras Tour before Singapore. Even her resilience to past disappointments inspires the youth. Second, in terms of feasibility, Singapore as a destination with existing large venues, higher purchasing power of consumers, a disciplined and organized government capable of securing concert stakeholders, and the least corrupt country in Southeast Asia are all positives. Third, in terms of viability, offering a grant will make performing in Singapore easier to decide for the performers and the organizers. The grant, as a strategic investment, is much cheaper than actually paying the entire professional fee of a pop icon like Taylor Swift for the organizer. With no less than Singapore’s Minister of Culture, Community, and Youth, Edwin Tong, personally flying to offer and negotiate the deal for Singapore and assuring the organizers of no barriers and show stoppers like permits, one can already imagine things falling into place in no time at all. Based on the trio criteria of desirability, feasibility, and viability, how many countries in Southeast Asia can actually match Singapore even if they also offer a grant as a value proposition? In analyzing a business model, the value proposition can only materialize when the value architecture, composed of the value chain, key processes, and key resources, is in place to deliver the value proposition. It is not as easy as offering a grant!
To mitigate the government’s risks, economic data on sales lift in many cities where Taylor Swift performed have been published for anyone paying attention to read, gain insights, and create actionable strategies. Singapore was able to connect the dots earlier than its competitors. So long as the grant amount is lower than the expected gain in Singapore’s tourism, taxes, economy, and as a cultural hub, the business model should be viable. Assuming half of the 330,000 concert-goers are from other countries, which is not a remote possibility, the number of inbound tourists to Singapore is expected to represent double-digit incremental inbound growth to Singapore for March 2024 alone.
From the perspective of the organizers, securing a deal with a credible government mitigates several risks. Firstly, alignment risk is practically eliminated with the government fully backing the concert series as a key complementor. Imagine having a direct line with the minister himself. Moreover, with the grant, the government is as interested in ensuring the concert’s success to attract tourists for future events. The second risk, operational risk, is minimized as established infrastructure ensures a smooth execution.
A master strategist needs five critical skills: sensemaking, innovating, discovering, influencing and executing.
The Taylor Swift concert economics showed us some significant lessons
- If traditional markets can’t be relied upon, explore new market segments while creating offerings that resonate with these new audiences.
- Assess the potential success of new initiatives. In this case, Taylor Swift’s popularity adds to the desirability, while Singapore’s infrastructure and government support contribute to feasibility and viability, the latter will be influenced by how government can help to mitigate risks associated with large-scale events.
- Government should be willing to reconfigure existing approaches and align with changing market dynamics.
- Trust is an economic driver. Trust increases speed of doing business.
- Opportunities abound for those who can identify the problem, make sense of the situation, and develop strategies and innovations. This confers a head start advantage in gaining a competitive edge, reducing competitors lead them to resort to complaining
- Budgeting becomes more efficient when a single budget can move the needles in various areas, including tourism, economics, taxes, and culture image, creating a cluster of interconnected benefits and opportunities for overall growth and development.
- Countries must weigh the trade-offs between commercial gains and diplomatic relations when deciding on hosting exclusive events. Every decision entails trade-off!
- Exclusivity warrants reconsideration. The fact that 22 million people applied for 330,000 Taylor Swift tickets in Singapore indicates that a regional initiative to promote tourism and cultural exchange collectively is feasible. By collaborating with parties not seen as threats, resources can be pooled, expertise shared, and collective strengths leveraged to showcase the diversity of the region. For example, while Singapore may lack the motivation to collaborate with tourism leaders like Thailand, Malaysia, and Vietnam due to their proximity, could the Philippines—with its large population, vast natural resources, and English proficiency, among other features—capitalize on this opportunity as a back-to-back destination with Singapore? (Hint! Hint!)
- To effectively strategize and execute like Singapore’s Taylor Swift concert economics, research has shown that a master strategist needs five critical interconnected skills: sensemaking (to give meaning to data, make sense of complex situations, understand market trends, and identify opportunities and threats in the industry), innovating (to create unique experiences and offerings that are compelling to attract customers and sustain competitive advantage in the market), discovering (to gain new insights, identify untapped opportunities, and recognize emerging trends to envision new possibilities within the industry), influencing (to build partnerships, gain support from stakeholders, persuade key decision-makers, and shape perceptions), and executing (to translate strategies and ideas into action, efficiently implementing initiatives, and achieving desired outcomes).
- Skills come before strategies!
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Josiah Go is the chairman and chief innovation strategist of Mansmith and Fielders Inc., and author of the 5 Skills Framework. The 15th annual Mansmith Market Master Conference, scheduled for May 8 and featuring 15 CEO Thought Leaders, is now open for registration via www.marketmastersconference.com
