Costs of putting on a show at the Fringe are getting beyond a joke, says festival chief

Scotland's already faltering tourism industry has been warned that crippling running costs and expensive accommodation could threaten the future of the Edinburgh Festival - the country's most successful crowd-puller.

Scotland's already faltering tourism industry has been warned that crippling running costs and expensive accommodation could threaten the future of the Edinburgh Festival - the country's most successful crowd-puller.

With the official launch of the Fringe Festival tomorrow, the director, Paul Gudgin, said performers could be put off coming by the combination of venue and marketing costs. While the festival, which this year has 1,350 different shows, brings more than £100m each year to the Scottish economy, Mr Gudgin said he feared it could become a victim of its own success.

He said it was not unusual for promoters to spend between £100,000 and £150,000 putting on shows and rarely breaking even. At the same time, the city council this year upped rents in one of the venues - Princes Streets Gardens - from last year's price of £7,000 to £20,000 for three and a half weeks.

Mr Gudgin said: "We are very concerned that as the fringe becomes bigger, costs seem to be spiralling out of control. The performers are wanting Edinburgh City Council to give us a break on venue costs.

"It is a prestigious event and everything should be done to make the place more welcoming for performers. We have had complaints from performers regarding costs and they are saying it is far too expensive to put on a show. Every year we are getting a few people who cannot and will not come back. They cannot afford it."

The comments come at a time when Scotland's tourism industry is struggling to recover from what its officials call a "slow start". While the fringe and the International Festival always draw more than one million visitors, tourism officials are concerned that the number of foreign visitors coming to Scotland at other times of the year has fallen sharply. Figures for last year show that the number of overseas visitors fell by more than 12 per cent from 1998 - the result of a combination of increased competition and weak European currencies compared with a strong pound. (The one exception seems to be groups of Christian tourists from the American Bible Belt who are flocking in increasing numbers to visit the Edinburgh house of John Knox, Scotland's Reformation leader.)

This year the position has been made even more difficult because of the high price of petrol in Britain compared with the continent. A spokeswoman for the Scottish Tourist Board said: "The price of petrol does seem to put off people from Europe. People from England are used to paying silly prices for petrol. And in Scotland there are long distances to cover."

The industry has made great efforts to help itself. Officials are even considering buying mechanical "midge eaters" from America to try to counter one of Scotland's most persistent problems.

But tourism officials also point out that Scotland has never been promoted as a cheap destination. A spokeswoman for the Edinburgh and Lothian Tourist Board said: "Edinburgh is not a cheap city. During the festival hotels do not put up their prices but they do charge the maximum rate. It is just that at other times of year they might reduce their rates. At this time of year there is a lot of demand. Things are chock-a-block but there is accommodation that ranges from hostels at £10 a night to five-star hotels." There is some sympathy within the council to performers' concerns. The council's head of recreation, Steve Cardownie, said it needed to make promoters and performers more welcome in the city. "I have promoted events in the fringe festival before and I know how much of a jungle and a rat-race it can be," he said. "This is three weeks of the biggest arts extravaganza in the world and the council should not be seen as trying to cash in."

The move to treble the price at Princes Street Gardens has dissuaded David Bates, a promoter, from bringing the Spiegeltent, a fixture of the last four fringes, to the venue. Mr Bates said performers would not be prepared to take the risks of appearing at the festival for fear of losing money. He said: "All I want is a sane and reasonable rent measured against the value of the Spiegeltent and the festival to the city.

"Edinburgh is in serious danger of biting the hand that feeds it as far as the festival is concerned. I can assure the council other cities south of the border are watching events up here closely with a view to adopting Edinburgh's mantle.

"If hikes in rentals proceed at this rate, they will makethe fringe non-viable for a lotof influential promoters and performers."