Soaring demand for must-go-to festivals and gigs, star-studded West End theatre shows and VIP tickets for events is sparking a spending boom despite the cost of living crisis.
The live event industry, described as the first casualty of the coronavirus pandemic and the last to fully recover, is predicted to have a strong year in 2023 as people rein in spending on big-ticket items and holidays but still want a night out.
Despite double-digit inflation and soaring bills, belt-tightening households are making sure they have enough set aside for a summer of fun. But it’s not going to be cheap.
In October, Glastonbury – the not-for-profit festival of festivals that this year will mark Elton John’s last UK show – stunned fans by announcing a more than 26% increase in ticket price to £340 (including booking fee) because of cost increases.
Glastonbury’s eye-watering rise is part of an industry-wide ratcheting up of ticket prices for the events industry, which still remains a third smaller than pre-pandemic, as organisers grapple with increasing financial challenges.
The best seats in the house for West End theatre shows have soared by more than 21% since 2019, with the average cost hitting more than £140, according to a survey by the industry title the Stage.
To Kill a Mockingbird at the Gielgud theatre was the most expensive, with some tickets at £199.50. Cabaret was the most expensive musical, with top-price tickets costing £303.80.
Earlier this year the West End show Cock, which originally starred Taron Egerton, advertised tickets for £400 based on “supply and demand” as it came to the end of its run. After public criticism, the top tier price was dropped to £175.
A family trip to a theme park is expected to go up by about a fifth, piling on extra expense to household budgets – and that’s just for tickets.
Merlin Entertainments – the world’s second-largest theme park operator after Disney, and the owner of UK attractions including Thorpe Park, Legoland, Madame Tussauds and Sea Life – has raised on-the-day ticket prices at Alton Towers from £56 in 2019 to £68 for 2023.
“This year is the first proper pre-Covid year for a number of events and there are some big price increases being announced as they try to ‘catch up’ on lost years,” says Harry Heartfield, a senior partner at Edition Capital, which has investments in events including Crystal Maze and Tomb Raider Live and the Snowboxx festival in France. “But only some events have the luxury of sellout demand allowing price increases. At the top end, particularly in sports and music, fans are hyper-engaged, and feel the need to be part of the tour or event. This means that operators can increase prices significantly and people will pay to be there.”
While the financial strain on the live event industry that has kicked in has resulted in a dramatic thinning in the glut of festivals and events that proliferated before the pandemic, it is all about star power to keep ticket sales rolling in.
The return of the comedian Peter Kay for a residency at the O2 after a 12-year break from the stage has led to a rush for tickets, with the monthly shows currently sold out until March 2025.
AEG, the owner of that London arena and events including British Summer Time (BST) in Hyde Park, which this year features a lineup including Guns N’ Roses, Take That and Bruce Springsteen, has seen tickets for the festival sell out faster than pre-pandemic.
“Even with the cost of living crisis people are still buying,” says Paul Samuels, the executive vice-president for global partnerships at AEG Europe. “It could change, we have to be cautious because of course there is a risk, but we have seen no evidence at the moment. During the 2008 financial crisis there was never a drop in ticket sales – or food and beverage – at the O2. People felt a holiday abroad was too much of a big-ticket cost but they still wanted a night out, to see friends, and use that as a release. We are predicting that will be the same case with the cost of living crisis, and not a total wallet crunch.”
While the industry has kept “cheaper” ticket prices relatively low – there has been only a 3.3% rise in London’s theatreland since 2019, while standard BST tickets are only 3% more than 2022 – operators are cashing in on a rise in demand for premium experiences.
BST has more than six options for fans to upgrade, such as for VIP areas with fewer crowds closer to the front, which Samuels says completely sold out ahead of the general admission tickets.
Within the O2, annual sales of the “best seats in the house” – offered through the sponsor American Express’s Advantage programme, which cost £300 to £400 for luxury seating near the stage with dinner thrown in – have increased by 49% between 2019 and 2022.
“One thing that has amazed us the most, it was a bit unexpected really, has been the premium seating boom,” Samuels says. “Not just business hospitality but consumers that just want an extra experience. Based on current sales rates, 2023 could be our biggest year yet for hospitality and premium seating.”
Capitalising on this trend, the O2 is ripping out about 10 corporate suites – which cost up to £350,000 annually and have a waiting list of corporate clients – to create a new space opening in November. Super club is the current working title for the roughly 300-seat space, and each will go for about £12,000-£15,000 annually.
Heartfield says that the ability for event operators to cover soaring costs with ticket price increases, and upselling experiences, will continue to be matched by consumer demand. However, there will be a “backlash if they feel they are being taken advantage of with prices”.
Fiona Eastwood, the chief operating officer at midway and resort theme parks at Merlin Entertainments, says: “We are very careful with price increases, and our approach is that prices generally only go up when our guests are getting more – for example, a new attraction at a park. We need to deliver days out that represent great value for money. Despite external pressures, families and friends will still want to laugh, take selfies and make memories.”