Two major festivals, Splendour in the Grass and Groovin The Moo have already cancelled their 2024 editions, with organisers of the latter citing low ticket sales.

The Australian Festival Association say more than 25 festivals have been cancelled since 2022 yet Illawarra music festivals like Yours and Owls and Changing Tides festivals continue to prosper.

For Simon Felice from Changing Tides, which held its inaugural event in December 2023, organisers need to be wary of the current climate.

"You need to be aware of not just the future of festivals but you also need to be aware of what the economy is telling festivals," Mr Felice said.

"We created close to 250 jobs, for the last festival over that two-day weekend and we injected close to $8 million back into the Kiama LGA.

"It's a huge risk but the pay-off economically is quite rewarding."

The Changing Tides Festival prided itself on keeping the festival site clean and the lines at the bars to a minimum, but Mr Felice said this came at a high "labour cost".

Adelle Robinson from the Australian Festivals Association told a senate inquiry the insurance premiums and operational costs have risen by 40 per cent.

"Festivals are currently experiencing a crisis from a combination of issues occurring at once, to create what we see as a perfect storm," Mrs Robinson said.

Mr Felice said the costs he paid for labour were the "highest they've been since 2012".

"It's steadily increasing year in, year out," he said.

"So you need to be aware of your budget and you need to stick to that budget, but you also need to give your punters a point of difference."

Changing Tides will be back this year and Mr Felice says a big part of the festival will always be the South Coast.

"I really want to showcase locals, because I think the South Coast has got some amazing talent. But then also say hey this is looking like a great hub for musicians.

"So whether it does attract musicians from around the country or overseas. I really just want to highlight that."

For local Illawarra artists like garage punk band Hoon's frontman Daniel Breda, festivals like Yours and Owls are important parts of the Wollongong live music landscape.

"I guess it's really important to our economy actually, like in terms of tourism," Mr Breda said.

Hoon runs the one-day festival, the Gong Crawl, in collaboration with Yours and Owls.

Mr Breda does believe that Splendour will be back though.

"One thing will go and another thing will rise you know what I mean?" he said.

"I don't think Splendour will be permanently gone, it's just they got dealt a pretty rough card with Splendour in the Mud."