Ticket price reimbursement in case of festival cancellation due to Covid-19 (17.03.2020)
As things stand today, our understanding is that our festival will take place in July – as long as there is no other order from the Swiss Federal Council.
In the face of current conditions due to the Covid-19 virus, on 28th February 2020 the Swiss Federal Council imposed a ban on any gatherings of more than 1000 people. On March 16th they declared that an ‘extraordinary situation’ now exists in Switzerland in terms of the Epidemics Act. All shops, restaurants, bars and entertainment and leisure facilities will remain closed until 19 April.
We therefore want to explain our terms and conditions in detail so that ticket purchasers will be informed in a clear, transparent, and understandable way about the handling and applicable laws as well as potential reimbursements in case of a cancellation.
There are basically three scenarios (none of which have ever happened in the 37-year history of our festival due to the very low likelihood of occurrence):
The reasons for each scenario will be explained in detail below.
Please note that the following explanations solely reflect our own approach and policies. There is no one single approach within the music business, so the following applies to the Gurtenfestival only. Other event organisers may choose a different approach. It is up to their own judgement – only they can assess their own situation and possibilities.
Current situation based on the Gurtenfestival’s general terms of business
For more than ten years, our general terms of business have contained the following clause: “No claims for reimbursement of the purchase price of festival tickets shall be accepted.” (Please refer to the following link: Gurtenfestival: General Terms of Business.)
This may appear harsh, but is current practice for festivals. Many people may have the impression that a festival requires work only during a few days per year when in fact it is a year-round endeavour. For example, booking bands may take place at any time during the year. Setting up and taking down all the festival structures takes nine entire weeks – so that there will be small town on the mountain above Bern to accommodate 20,000 people per day. With some partners we have signed 3-year delivery contracts, and certain materials need to be reserved and ordered six to twelve months in advance.
We have an internal team of full-time employees whose wages comprise a low two-digit percentage of our yearly costs. We also work with numerous external partners in the areas of construction, electronics, catering, print, sponsoring, ticketing, etc. This means that many services that need to be paid for were already rendered months before the actual festival starts – even if the actual event cannot take place for one reason or another.
In addition, festivals are bound by many more factors than regular concerts. Our festivals are highly complex systems in which during 92 hours per year all the scheduled services provided by numerous parties (bands, partners, suppliers, helpers, etc.) need to be coordinated and implemented at just the right time and at just the right place. These 92 hours make the difference between success and failure of the festival. Some bands may cancel on short notice. The weather may not cooperate and we have to interrupt or cancel individual concerts. A crucial partner may not be able deliver as promised and critical services are suddenly not available.
In case of a cancellation (for any given reason) we do not have the option of just postponing the festival. It is simply not possible to bring all involved parties (including all the bands) together on four different consecutive days.
We also need to consider that the entire city of Bern is affected during the four days of the festival. There are a great number of interdependencies and interactions with the public transport system, various city departments, as well as roughly 1500 persons who work with us instead of with their main employers during those four days.
This, in short, is the reason why festivals tend to include a clause in their general terms of business according to which the ticket price cannot be reimbursed.
In the 37-year history of the Gurtenfestival there has never been a cancellation, and for the above mentioned reasons any cancellation would occur only in extreme situations in which we would be forced (also in the literal sense) to take this measure and there was really no other solution possible.
The following scenarios explain our general terms of business regarding any tickets purchased for the Gurtenfestival 2020 (regardless of the time of purchase).
The festival needs to be cancelled due to reasons such as terror, piety, or severe weather. We currently do have insurance coverage for these scenarios. This may, however, change in the future as insurance companies adjust and change their products on a yearly basis.
Our insurance covers 50% of the tickets based on the days that have already taken place (due to the fact that it is possible that between one and four days may have to be cancelled on short notice).
Any money that we generate through ticket sales up to that point will then go to our so-called service fund. Out of this fund we pay any services that were already rendered for the current festival. For example, we pay the people who set up the infrastructure for the festival and have already done their work. Or we pay for rented materials that we ordered and were already delivered. Or we pay the people who spent time on planning and organising the festival.
After all those services are paid, any remaining funds will be moved from the service fund to the reimbursement fund in order to reimburse the ticket purchasers. The amount of the reimbursement will be dependent on the amount already spent.
Depending on the amount of money that ends up in the reimbursement fund, ticket purchasers will therefore receive a refund of 50% (guaranteed by our insurance) plus anywhere between 0 and 50% from us. Under no circumstances will Gurtenfestival AG generate any profit, nor will it claim more than is necessary to pay for any services that were already rendered. While it is our declared goal to reimburse the ticket price in full, we are unfortunately not able to guarantee that we will be able to do so.
The festival needs to be cancelled due to a pandemic, war, or strike (e.g. strikes by public transportation providers which would prohibit travel to the festival or strikes by bands so that concerts cannot take place).
Pandemics cannot be insured – no insurance company offers such a policy. Therefore we have to refer to our general terms of business, but we strive to act as fairly as possible. Any money that we generate through ticket sales up to the point of cancellation will go into our service fund. Out of this fund we pay any services that were already rendered for the current festival. For example, we pay the people who set up the infrastructure for the festival and have already done their work. Or we pay for food or rented materials that we ordered and were already delivered. Or we pay the people who spent time on planning and organising the festival.
After all those services are paid, any remaining funds will be moved from the service fund to the reimbursement fund. In case the service fund does not include enough money to pay for all the services that were already rendered (e.g. if not enough tickets were sold at the time of cancellation) we have to bear the consequences. It is our entrepreneurial risk, and we have to come up with the uncovered amount to pay all the bills. In an extreme case this may lead to the insolvency and ultimately to the bankruptcy of the Gurtenfestival AG.
Once all the bills are paid, the remaining funds will be used to reimburse ticket purchasers. The amount of the reimbursement will be dependent on the amount already spent.
Depending on the available amount in the reimbursement fund, ticket purchasers will receive a refund of anywhere between 0 and 100% of the ticket price. Under no circumstances will Gurtenfestival AG generate any profit, nor will it claim more than is necessary to pay for any services that were already rendered. While it is our declared goal to reimburse the ticket price in full, we are unfortunately not able to guarantee that we will be able to do so.
No reimbursement will be given in case of cancellations of bands (even headliner bands). Also, no reimbursement will be given should individual days or concerts need to be interrupted or cancelled due to thunderstorms. These circumstances are not covered by insurance and constitute merely a reduction of performance.
In the 37-year history of the Gurtenfestival there were only a handful of concert interruptions that lasted a few hours at the most. At no point was it necessary to cancel an entire day.
Scenarios such as interruptions are part and parcel of normal festival routines and cannot be insured. Of course we always strive to avoid such scenarios whenever possible as long as the safety of everyone involved is assured.