Rising Costs in the Music Festival Sector in 2022.
Inflation is a developing story in the media in 2022 with many economists predicting inflationary pressure on world economies. This will likely impact all parts of society and will have a knock-on effect on the music festival sector with organisers seeing rising costs and a subsequent need to increase ticket prices.
Most fiscal policies adopted by central banks when faced with inflation is to cool economies by increasing base rates. Futures trading on the wholesale rates markets indicates that increases in the cost of borrowing have already been factored in which means interest rates will rise because inflation is expected to rise. What factors of the music festival sector will see rising costs this year and how can organisers prepare for managing this situation.
The cost of energy has been on a steep rise recently due to rises in the cost of raw materials like oil and gas leading to unprecedented increases in the cost of electricity production. Given the enormous energy required to power a multi-day festival, organisers could be faced with steep increases in the cost of powering their generators. Whilst many organisers have invested in solar and wind power in recent years it usually does not generate the ‘juice’ required to power the stage backline needs. There is still a heavy reliance on generators so it makes sense to shop around for the cheapest fuel options whether that’s diesel, biofuels or hydrogen.
Food and Beverage.
Supply chain costs have increased, in part due to rising fuel costs making delivery and storage costs rise. Food and beverage suppliers have had no choice but to pass on these increased costs by raising the price of items they sell. Whilst this will mainly affect festival site vendors who will charge festival-goers more, there may be an impact on catering services contracted by festival organisers for staff, artists, crews and volunteers for example.
Suppliers and Contract Labour.
Suppliers and contractors have had to deal with rising energy and supply chain costs and these are likely to be passed onto festival organisers. Another factor is the increase in labour costs as many experienced specialist contractors left the industry during the last 2 years because of the coronavirus pandemic. Festival contractors are now in high demand and they are asking for an increase in their pay rates knowing that there is a labour shortage in the industry.
It’s impossible to cover the intricacies of all the elements at play here in this short article but with all these potential rising costs festival organisers need to carefully factor increased costs into their financial planning and management this year. Given the tight margins most festivals operate under these financial pressures are only going to increase. It may be prudent to delay releasing ticket availability as late as possible so that the pricing can reflect increased costs. Organisers should do more shopping around for contractors and suppliers to secure the best rates whilst balancing quality of delivery. Artists fees may not see large increases as not all festivals and tours will resume this year possibly making more performance artists available for the limited number of events.
For festival organisers planning their events using a software management platform like Festival Pro gives them all the functionality they need manage every aspect of their event logistics making their festival management more efficient. The guys who are responsible for this software have been in the front line of event management for many years and the features are built from that experience and are performance artists themselves. The Festival Pro platform is easy to use and has comprehensive features with specific modules for managing artists, contractors, venues/stages, vendors, volunteers, sponsors, guestlists, ticketing, cashless payments and contactless ordering.
Photo by Olya Kobruseva from Pexels
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