The president of the Salzburg Festival is annoyed. Deafening firecrackers echo through the historic city center around the festival hall. “Such a thing in times of terrorism fears!” Helga Rabl-Stadler says.
The Austrian city of 150,000 is bursting at the seams in the midst of the 41-day music and drama festival, considered to be among Europe’s most important annual cultural events. Crowds push their way down the narrow streets flanked by expensive shops, and traffic slows to an agonizing pace through the labyrinthine old town. Finding a last-minute hotel room is almost impossible.
But the crowds are too much for some locals, who fear the city may become a terrorist target. “I only go into the city if there is no other option,” says one resident.
These crowds who come for the city’s opera, music and theater productions are the fuel that keep the picturesque city’s tourism business booming, though. This past weekend, the Salzburg Chamber of Commerce released an economic impact study that analyzed data from more than 3,000 festival visitors. The study found that the festival brings in €215 million ($243 million) to Austria each year, creates some 3,400 jobs and contributes to €77 million in taxes to the state coffers.
“We have the highest purchasing power and the lowest unemployment in Austria,” says Konrad Steindl, head of the Salzburg Chamber of Commerce.
“The festivals create cultural value and measurable economic value,” adds Ms. Rabl-Stadler.
One advantage that the Salzburg Festival has over things like sporting events is that it draws an exceptionally high proportion of repeat visitors. According to the study, 80 percent of the guests are regulars who have attended the festival at least six times. Almost half of the visitors have come more than 20 times. The festival is especially popular with Germans, who make up 41 percent of attendees. Austrians make up another 38 percent.
These repeat attendees can pose a problem for the festival, however, namely the threat of an aging audience. In recent years, the festival has avoided experimentation, instead sticking with big names and established material. But that could change with the arrival of a new director, Markus Hinterhäuser. The successful leader of the Vienna Festival will take on his new post as artistic director in Salzburg in October.
Another problem is that the well-heeled attendees can be a bit frugal in their spending. Each festival guest spends on average €319 per day, just €2 more than in 2001. Money spent on tickets, which is on average €550 per guest, has also not increased since then. Tickets range in price from €5 to €430.
Nevertheless, the economy continues to thrive thanks to the publicity. “The festival is an annual infusion of excellence into the area,” says study author Helmut Eymann Berger.
“The Salzburg brand might not shine so brightly internationally without the festival,” says Mr. Steindl of the Chamber of Commerce.
When the Salzburg Festival was founded 96 years ago, organizers already had the economic impact in mind. At the time, theater director Max Reinhardt pointed to similar events in Bayreuth and Munich and the source of “decades of an inexhaustible stream of wealthy travelers.” These guests would bring economic advantages, “the amount of which would be almost impossible to calculate,” he said. Mr. Reinhardt founded the festival along with poet Hugo von Hofmannsthal.
Today, the Salzburg Festival is a relatively inexpensive for Austrian taxpayers. The festival’s total budget is €60.5 million, just €16 million of which is publicly subsidized. The remainder is financed through ticket sales, broadcasting rights, donations and sponsors.
These sponsors are playing an increasingly important role. There are currently four major sponsors: Siemens, Audi, Nestlé and Rolex. Apart from the watch manufacturer, which didn’t become a major sponsor of the festival until 2012, the companies have all long been involved in various ways in the financing of the almost 200 performances spread over 14 different venues. For example, Siemens has had a hand in the increasing popularity of the festival for several years through the free screening of the festival performances on a giant LED screen in the Salzburg city center. These open-air screenings pull in about 70,000 viewers during the festival.
The search for sponsors has become more difficult, though. Stringent compliance guidelines to prevent corruption pose a challenge for the Salzburg Festival as well as other cultural festivals. “I think it’s wrong to put hospitality under the general suspicion of bribery,” says Ms. Rabl-Stadler. “But I’m not fighting it, because that’s a quick way to end up in the wrong company.”
She acknowledges that keeping sponsors happy can be difficult, too. “Every CEO wants their own special project,” she says. But the festival has one powerful weapon. “Our advantage is in how international our reach is,” she says. “I find it easier than others to attract sponsors since we have guests from 74 countries. This is very important for companies like Audi or Nestlé.”
Besides the four main sponsors, Ms. Rabl-Stadler has arranged a number of project sponsors including Bank of America Merrill Lynch, the Austrian insurance group Uniqa and the Tyrolean crystal producer Swarovski.
But in recent years, the former parliamentarian for the country’s conservative Austrian People’s Party, or ÖVP, has been unable to attract international innovators as sponsors to Salzburg. Digital players, or example, have so far kept their distance from the festival.
Hans-Peter Siebenhaar is Handelsblatt’s Vienna correspondent from where he covers Austria and South Eastern Europe. To contact the author: email@example.com