Revenue / 08.17.22
Why Inflation Has Become the Next Big Test for the Festival Sector
Music Week (08/08/22) Paine, Andre
Cost of living increases are building into the next big challenge facing the U.K. festival sector, with inflation currently running at 9.4%, up from about 1% in 2020. "2022 is still a year of tremendous uncertainty that we need to get through," explained LIVE CEO Jon Collins. "There are festivals honoring ticket prices that were set in 2019 against the 2022 cost base. So there are some huge challenges for the operators." Association of Independent Festivals CEO Paul Reed pointed to 30% or higher spikes in infrastructure costs and supply chain disruptions, which is "particularly challenging for independent festivals as they operate on margins that are typically lower than 10%." Weekend tickets for the Truck Festival in Oxfordshire were £105 in 2019, but they have ballooned to around £140 for 2023 because of higher operating costs. "The cost of living crisis has hit everyone this year, but the arts, events and entertainment sectors are particularly affected — as people are now less likely to have spare savings for higher price tickets, which are ultimately a luxury item," said Will Young at Strawberries & Creem organizer S&C Productions. Trade organizations are urging a value-added tax cut for the cultural sector, and Young added that without government intervention, strong advance ticket sales may not be enough to keep festivals solvent.
Read the full story on Music Week.
Tags: Revenue , Inflation