Taylor Swift is doing 8 Eras shows in London. Mini-residencies could be her smartest business decision yet.

• Taylor Swift's Eras Tour raked in over $1 billion in 2023 and will break more records this year.
• Swift is set to take home hundreds of millions of dollars — which is helped by "mini-residencies."
• Inside her touring strategy and how it's making Swift so rich.

From the dance moves of a literal prince to her very own prince charming taking to the stage, Taylor Swift's first three shows at Wembley Stadium proved people aren't sick of the Eras Tour yet.

Swift and her economic impact have swept Europe. The European Central Bank is monitoring how the tour will affect inflation; hotels across the continent have sold out around her tour dates; and in the UK alone she's expected to pump $1.26 billion into the economy, according to a Barclays report.

The Eras Tour was always set to be immensely profitable for Swift, but she's set to make even more money thanks to one key business move. Swift is set to play eight nights in London and six in cities like Toronto — and she's skipping nearby cities that she's hit on past tours like Ottawa.

These mini residencies are likely adding millions of dollars to her bottom line. The underlying business assumption is that Swifties will travel and pay big bucks for tickets, so the shows will likely be sold out no matter where they are. Playing in fewer cities means less money spent on production, travel, and labor — which in turn means more profits.

"It significantly reduces the overhead of a tour," Nathan Hubbard, the former CEO of Ticketmaster who founded the management firm Firebird, told Business Insider. "Think about the cost of taking down an entire stage, packing up 50 trucks, moving it all to another town. Every night you can avoid striking the set saves millions of dollars."

Swift's representatives did not respond to a request for comment.

She proved this theory worked during the US leg of the tour when she played six shows in Los Angeles but skipped San Diego. Harry Styles also tested it with his 15-night runs at New York's Madison Square Garden and Los Angeles' Kia Forum, an extension of the Las Vegas residencies that have long minted millions for stars.

"Coming out of Covid, the largest artists understand that their fan bases will travel to be with them," Hubbard said. "Previously, this was just happening in Las Vegas. But so many of these cities can be a fun excursion for a fan and their friends. That's driving a lot of what we're seeing in the evolution of touring right now."

The math is working out for Swift: BI spoke with several fans who said they traveled out of state to see Swift last year. Many American fans are traveling to Europe to get to see her abroad.

"I probably would've come to Scotland at one point, but it was the concert that got me here," one Swiftie from Minneapolis told BI.

"We said to ourselves, 'Let's just go and have an adventure," her friend added. "Tickets are outrageously expensive in the US, and this entire trip for both of us was cheaper than our friends back home paid."

Of course, it's a delicate balance. Swift is considered among the pop stars most in touch with her fans and wouldn't want to alienate anyone by skipping over their local venues. But with more than 150 shows in 50-plus cities, it would be hard to complain about her doing a few extra nights in one place and passing over another.

Plus, she's charging less — an average of about $250 per ticket, per Pollstar — than she could, especially considering the average resale price of $3,801 that Pitchfork reported.

And, again, she's not the only one profiting.

The Common Sense Institute said that "the totality of Taylor Swift's US tour could generate $4.6 billion in total consumer spending, larger than the GDP of 35 countries." In Europe, the total figure will surely be impressive as well.

Turns out that she's an industry disruptor — if not the smooth-talking huckster — after all.