Festival Travel’s Ruud Bongaerts: Making Up For A Year Of Lost Revenue

Fans traveling to Budapest, Hungary on the Sziget Express
Courtesy of Festival Travel
– Fans traveling to Budapest, Hungary on the Sziget Express
Festival Travel allows promoters to integrate travel and accommodation booking into their festival website and participate in the commissions.

Dutch company Festival Travel announced that it has found a solution for large-scale festival promoters to generate post-coronavirus festival revenue. Pollstar asked Ruud Bongaerts, managing partner at Festival Travel, how.
Even in the best-case scenario of events returning unrestricted in the summer of 2021, this year of lost turnovers will leave its mark on the entire sector.
View of Budapest from Gellert Hill
– View of Budapest from Gellert Hill
The city has a lot to offer for visitor pre- and post-Sziget. Thanks to Festival Travel’s Chameleon, many of those offers can be booked through Sziget’s own website.

According to a statement from Festival Travel, it is “inevitable that an event’s turnover of one year will be spread over two years, while costs don’t decrease proportionally.”

To increase sales, promoters have a set of choices: organize more events, which would increase costs considerably, increase capacity, which no promoter dares think about in times of social distancing, or offer more adjacent products and services, which will increase revenue per visitors.
To accommodate the latter, the team at Festival Travel have developed a product called Chameleon, which lets promoters share in ancillary revenues generated by booking various products and services of multiple suppliers at the same time through Chameleon’s online shop. 
Aside from extras such as camping, lockers and local transportation in addition to entry tickets, Chameleon also integrates the offers of, among others, nearby ho(s)tels and (inter)national travel options (such as train, bus or plane) for the distant visitor. 
Chameleon has pledged to share the commissions from this ancillary revenue, which it would usually keep for itself, with the promoters, who can implement Chameleon as a white-label shop on their event’s website, so customers won’t have to book anything through a third-party.
Ruud Bongaerts
– Ruud Bongaerts
Managing partner at Festival Travel.

“All additional products which Chameleon can offer via its marketplace solution have a certain commission included, which will be shared with its clients. Commissions vary per product, as more expensive products like hotels and travel have a significant higher amount than smaller add-ons for example. During the past years we already used this solution for ourselves but we feel responsible to help our industry by sharing these margins with our partners,” Bongaerts told Pollstar.

Festival Travel will take a commission, which varies per product type, but usually is around 10% to 25%, the rest will go to the promoters.
Bongaerts estimates that 60% to 90% of current entry ticket margins can be earned from such ancillary products and services. 
“This is based on averages from our existing partners, such as Sziget Festival, Balaton Sound, Electric Castle and several others,” he said.
“Of course there are differences in margins between festivals. Some have more income thanks to sponsor budgets while others mainly see margins from bar revenue. Based on our current partnerships we know that almost the same margins (in a shared model) can be earned by offering travel and hotel products,” Bongaerts continued, adding, “since we offer almost every possible travel and accommodation product, we enlarge our revenue streams which otherwise would go to major tourism platforms such as Booking.com.” 
According to the announcement of Chameleon, “the curve of declining cash flow due to Covid-19 can be flattened considerably (see Figure 1).” 
"Flattening the curve of declining cash flow."
– “Flattening the curve of declining cash flow.”
Figure 1

Festival Travel also guarantees various Covid-19 precautions, such as a 100% free cancellation option. Pollstar wanted to know whether that option only pertains to the services booked through Festival Travel, leaving the actual festival ticket a separate issue.
Bongaerts explained: “It’s our task to give festival goers a festival holiday without any concerns. As it showed from our recent survey, a big majority (almost 90%) of our audience feels comfortable to buy tickets for festivals again if they get flexible order options. So we enable a free cancellation on all ancillary products as you stated, however, we also try to find a solution for festivals. 
“Several festivals agree on our cancellation policy, others lean more towards a voucher arrangement (in case next season needs to be postponed again). We obviously will communicate per festival if entry tickets are included in the policy but it is our mutual task (the festival organisers and us) to increase customer’s confidence and receive new orders for 2021 in the first place. 
“Our ‘new normal’ negotiations with suppliers all include a free cancellation policy and we, as a company, will reserve total order revenue until it is decisive that the festival can and will take place.”