If you wondered how people could skyrocketing ticket prices and travel costs at a time when real wages fell, we now have our answer: they couldn’t. Instead, concert-goers and festival ticket buyers plunged themselves into debt this summer — more debt than at any time in the last decade.
It’s a debt they might have trouble paying off — a boon for banks who collect the highest possible rate of interest on credit card debt, but a problem with long-term effects for the music scene as much of the world plunges toward recession.
The information on this comes from the finance industry itself. In a survey published mid-summer by Lendingtree, the industry was cheered by the fact that more than a quarter of all attendees said they would be taking on debt and resorting to borrowing to afford this summer’s festival ticket prices. (Remember, lenders make a profit from this. It’s good news to them.)
That number — 26% of all attendees — is large, and scary, and increasing. Only 12% of respondents said they’d gone into debt to attend music festivals or concerts before this summer.
And it’s worse among the most vulnerable festival goers: 21% of Gen Z respondents admitted going into debt before this summer for festival costs. This summer: 41%.
Workers are earning higher wages than before the pandemic but those gains have been completely eaten up by inflation. Not just tickets and travel but food, clothing, gas, even rent has been increasingly paid for by taking on more debt to make ends meet.
Customers borrowing in order to watch Travis Scott mumble scales with autotune is part of larger consumer spending pattern in the United States over mid-2022. In a scramble to keep up with soaring inflation, consumers have been taking on more debt to maintain the same buying power and opening new sources of credit. Americans opened 233 million new credit accounts just from April to June of this year as inflation took hold while banks began pouring money into marketing in order to increase credit card sign ups. At the same time, open credit card balances soared at the highest rate in decades in the quarter ending in June as financial institutions splurged on marketing encouraging consumers to take on more debt. (If you are wondering if you read that right — you did. Just as interest rates began to soar, banks and lenders were figuring out how to get their customers to use even more credit than ever before.)
None of this should be surprising. People are earning higher wages than before the pandemic but those gains have been completely eaten up by inflation. The Dallas Fed revealed in October research that a majority of workers — 53.4% — are experiencing real wage declines. Not just tickets and travel but food, clothing, gas, even rent has been increasingly paid for by taking on debt to make ends meet.
What seems to have been happening is that cash-strapped consumers facing price shock at the box office charged tickets and travel costs they could not afford to their credit cards over the summer, which they planned to pay off in the last half of 2022. Some of them had done this before, but twice as many as ever were doing it now.
Since then, however, interest rates have soared, increasing the cost of maintaining debts. Delinquencies are rising as well. That debt is likely to stick for much longer than consumers thought — even into next spring and summer.
There are some suggestions that the fallout from this is already happening. The number of festivals in most areas declined this summer. Two major festivals in Chicago were canceled this year — the last, Necropolis, just two weeks before it was supposed to debut over Halloween weekend. Independent artists have been pulling the alarm that the cost of living is driving them off the road as touring has become financially unfeasible.
And from a consumer perspective, they were gouged like mad for tickets and travel in the summer of 2022. It seems likely the industry will be coming around to pitch 2023’s “early bird offers” when their customers are still paying off 2022’s debt. Coming out of COVID lockdowns, the festival industry, which minted money over the ’10s, is facing probably the worst economic headwinds they’ve seen since the Great Recession.
