Inflation Woes for the UK Music Festival Sector in 2024.
It's been a tough year for many music festival entities as rising costs and falling ticket sales have created tight margins across the industry. The latest economic data suggests that the situation is unlikely to change soon. What are the key factors organisers should be aware of in their planning process for 2024?
Anyone involved in planning a music festival in 2024 should be closely observing the trends in economic data released on a regular basis in the UK. Most data released is from previous months so it's important to understand the future trending implications for it to be factored into any planning. Key aspects to consider in the near future could include:
Inflation and the Impact on Supplier Costs.
Although the most recent inflation numbers released at the end of Q3 2023 indicate a levelling off the upward trend and overall picture suggest that the UK has one of the highest inflation rates in Europe. These numbers would indicate that supplier costs from festival contractors are likely to be higher in 2024 compared to this year.
Rising Staff Costs.
The increased costs of living for anyone in the UK have been rising under inflationary pressure with energy and fuel costs particularly hard hit. As a result, the demand for annual increases in salaries have been around 8% and are therefore running at a higher rate than inflation. This differential may lead to a continuing hike in base interest rates for example.
Ticket Prices and Falling Sales Volumes.
To cover the rising costs from suppliers and staff salaries music festival organisers are going to have to increase their ticket prices for festival-goers in 2024. The result of this price increase is likely to lead to a fall in demand for tickets.
The financial management of supplier costs and staff salaries will need careful planning and the pricing of tickets will require an analytical approach. A creative thought process for ticket pricing can help to present higher prices in a way that is perceived by festival-goers as more manageable or better value for money. Accurate forecasting for costs against a reduced ticket volumes can help to manage cash flow through the year and maintain margins.
Strategies to Maintain Margins.
Using historical data from 2023 along with accurate economic predictions can help to produce accurate financial plans for 2024. Taking a tougher stance with suppliers and staff on costs and salary increases can help to reduce the overall cost burden. A creative approach to the marketing of festival-goer tickets can make them more attractive by offering multiple options based on price paid. Festival organisers can also seek out potential assistance and financial grants from various Arts Foundations and government sponsored initiatives. For organisers with festivals that make very small margins they could consider converting to a Community Interest Company (CIC) status which may or may not be advantageous.
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. 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.
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