Following the festival cash trail

Published on Tuesday 2 September 2008 10:01

THEY are estimated to be worth more than a staggering £142 million to the Lothians economy, much of it spent by the massive influx of visitors they attract every summer. Ticket sales alone amount to around £15m.

In the light of such figures, it's no wonder Edinburgh's festivals are said to be the envy of the world, with cities around the globe hoping to emulate their success.

Yet despite the small fortunes spent by tourists, residents and the performers themselves, precious few people are willing to admit they make money from them.

In fact, many people are queuing up to say they don't make a bean. Comedian Barry Fearns blames the cost of appearing at the Fringe for his bankruptcy, while one of the festivals' best-known promoters, Charlie Wood, of the Underbelly, says he and others like him do well to break even.

Even being a well-known name is no guarantee of a pay day. TV comedian Stewart Lee said he lost between 50,000 and 100,000 over ten years, before making tens of thousands with one big hit show.

So, where does all the money go? If there are so many losers, who are the winners in the festivals money game?

You don't have to look far to see where most of the money is going, with hotels, guest houses, restaurants and bars soaking up the majority of the extra spending. Buy-to-let landlords also do well, charging up to 1000 a night for some of the largest properties.

Dig a little deeper though, and there are some surprising winners alongside them, including Edinburgh University and the city council.

Tom Pringle, star of television's Braniac, who staged his popular Dr Bunhead science show at the university's newly-refurbished George Square theatre, agrees that most festival performers are struggling to get by.

"Even as an established act I'm struggling to break even. Last year I took 2000 which, when you consider the Fringe probably occupies about two months of my year, including preparation, is barely even minimum wage."

Venue owners force performers to take the financial risks, he adds. "Some venues charge an initial sum up front and then take a 60/40 split on the ticket costs, and they usually insist on a guaranteed deposit in lieu of attendance figures, so they get their money either way," he says.

It has to be said though that not all performers are struggling to buy their next beer. A 70,000 profit from a 25-night run is not unheard of, particularly for a stand-up comedian whose overheads are low.

For those that make money, where better to celebrate than in Edinburgh's huge array of bars and restaurants?

The amount of money pouring into the tills at hotels, pubs and eating places has been laid bare in studies. The Scottish Executive-commissioned Thundering Hooves report identifying such establishments as getting the biggest slice of the 142m generated by the summer festivals.

An economic impact study which accompanied that report suggested that in 2005, around a third of the extra spending generated by the festivals went to hotels and other accommodation providers, with a quarter going to bars and restaurants.The next biggest winners were shops (18 per cent) and taxis and buses (7.5 per cent on travel).

A survey carried out by the Fringe among performers found accommodation accounted for a third of their costs. This has led to calls for hotels to plough some of their profits back into events.

Councillor Steve Cardownie, deputy leader of the city council and festivals champion on the local authority, says: "There was talk a while back about a 'bed tax' and that's something I'm certainly in favour of. There's all of this money being generated by the festivals which is going directly into shareholders' pockets, and very little of it gets reinvested into the festivals."

Hotels argue they would be busy regardless of the extra visitors brought to the city by the festivals. Simon Williams, chief executive of the Edinburgh Principal Hotels Association, said: "The summer months are good for hotels in general and we recorded equally good occupancy rates for the months leading up to August at around 85 per cent, so our hotels are normally busy anyway."

Mr Williams agreed prices went up in August, but pointed out this was not limited to festival time, as events like rugby internationals prompt a similar spike.

David Hinnrichs, owner of Allison House Hotel in Newington, and spokesman for the Edinburgh Hotel and Guest House Association, stressed not all of the takings were profit, and said a significant proportion goes towards maintaining and improving facilities, and paying staff, who demand premium wages at festival time.

He added: "Even the large hotels invest heavily in Edinburgh. When you look at the amount of reinvestment that goes into the Balmoral, for example, with things like the new bar they've just set up, you can't say the owners are just gobbling that money and taking it out of the city."

Festival prices at The Balmoral start at around 400 a night, and some buy-to-let landlords can make big money too.

Short-term letting can be a lucrative business in August, with agents like Ian Scott, director of Festival Apartments, who provides a web portal for more than 700 rental agents, able to get up to 1000 a night for the biggest properties.

"The going rate for a decent, four-bed holiday let is around 100 a day," says Mr Scott, who owns a personal portfolio of 25 flats. "I don't touch anything below about three bedrooms, but I do offer large townhouses with a capacity of up to 22 bedrooms which I'll let out for about 45 per person, per night. These usually go to large production companies all bedding down in one place."

There are estimated to be around 1200 holiday let properties in the city, collectively earning somewhere in the region of 3 million during festival time.

Another group earning big money from the Fringe are venue owners. Among these, Edinburgh University and the city council figure prominently.

The university's stock in the festivals is massive, with the Pleasance complex, George Square Theatre and Teviot among the dozens of properties it hires out as venues.

Like many performers and producers, the university and the council stay tight-lipped about rents, but the Evening News understands the Underbelly paid 18,000 to rent their Cowgate premises from the council, while the Gilded Balloon charge producers 3000 to 4000 for a 360-seater hall.

Based on those figures, the university is likely to earn around 270,000 and the council 100,000 from festivals rents in August, with the council reinvesting that amount – and more – in supporting the festivals.

FACTS AND FIGURES

Around 40 per cent of those attending the summer festivals live in the Lothians, with 20 per cent from elsewhere in Scotland. Around a quarter travel from the rest of the UK and 15 per cent come from overseas.

&#149 The average tourist visiting the Fringe stays for around six nights and spends just over 60 a day. That means they stay roughly as long as visitors staying in the run-up to Christmas, but spend over 50 per cent more money.

&#149 The Fringe is reckoned to attract around a third of a million visitors. The Tattoo (217,000) is the next biggest draw, followed by Hogmanay (147,000).

&#149 The advertising equivalent value of the press and broadcast coverage generated is estimated at 11.5m in the UK alone.

Source: SQW report on economic impact of Edinburgh's festivals, 2004-5.