Musikfest grows from local, feel-good festival to $75M economic powerhouse for Lehigh Valley

UPDATE: Musikfest 2023 sets new record for crowd attendance

BETHLEHEM, Pa. — Bethlehem was facing dire straits in the mid-1980s, with its largest employer and namesake steel company on the slide.

Many struggled to imagine the city and its future without Bethlehem Steel.

Almost 30 years on from the corporation’s collapse, and four decades after the launch of Musikfest, some people are saying the same thing about the 10-day festival that draws more than a million people to the city. 

• The 2023 edition of Musikfest is likely to generate $70 million to $75 million in economic impact in the Lehigh Valley, according to ArtsQuest
• The festival drew almost 1.25 million people in 2022, and all attendance indicators are “as strong as last year” 
• Attracting new people to the region is essential for long-term economic development, according to a local expert

“People come up to me and say, ‘You know, we never thought there would be a Bethlehem without Musikfest. We almost had to experience that, and we never want to have that happen again,’” ArtsQuest Chief Executive Officer Kassie Hilgert told LehighValleyNews.com.

Crowds have flooded back to the festival since the COVID-19 pandemic forced ArtsQuest to move it to a virtual format in 2020 — and so has its economic impact on the Lehigh Valley, Hilgert said.

Musikfest organizers expect the 2023 edition to generate $70 million to $75 million in economic activity for the Lehigh Valley.

That money flows to local hotels, restaurants, shops and businesses that help set up and supply the festival’s 50-plus food vendors, Hilgert said.

Many Northside businesses near the festival also reap the benefits of having thousands of people walking by their storefronts, she said.

'Tourism ... and civic pride'

Musikfest was held entirely on Bethlehem's North side until 2011, when the festival made its way to the then-new SteelStacks campus on the other side of the Lehigh River.

Since Musikfest expanded its footprint, and added stages and vendors, the festival’s economic impact has essentially doubled.

The 2010 edition — the last fully on the north — generated about $38 million in economic activity, while Hilgert estimated the 2022 festival’s impact at $77 million.

The festival’s total economic impact on the Lehigh Valley across four decades is difficult to quantify. But that number is likely at least $1 billion, with about $150 million in the past two years alone, according to ArtsQuest’s estimates.

It “would be fair to say that, in 40 years, it could have [had] that kind of impact,” Hilgert said.

Musikfest is billed as the largest non-gated, free music festival in the United States.

“When you have a free festival with no gate, it's very hard to recover your expenses,” Hilgert said. “But what you cannot put a number on is the value this festival brings to the community in terms of tourism … and civic pride.”

'Incredible marketing vehicle'

The festival, which stretches 10 days (this year it was 11 days, with a "preview" night, set an attendance record last year, with almost 1.25 million people enjoying the 2022 edition, according to ArtsQuest.

A similar attendance is expected this year, as sponsorships, ticket sales and memberships— the three indicators ArtsQuest uses to determine attendance in the absence of gate receipts — “were as strong as last year,'' Hilgert said.

The massive influx of people each August is essential to the region’s ongoing revitalization, according to Don Cunningham, chief executive officer of the Lehigh Valley Economic Development Corp.

“Visitation to the region is really the front door of economic development,” said Cunningham, a former Bethlehem mayor and Lehigh County executive.

“It all begins with people discovering the quality of life and the attractiveness of the Lehigh Valley.

“Musikfest, for 40 years now, has been this incredible marketing vehicle, showcasing not only Bethlehem, but the uniqueness and the authenticity of the Lehigh Valley."

As one of the Lehigh Valley’s premier attractions each year, Musikfest serves as “the tip of the spear” for the region’s tourism industry, Hilgert said.

With the exception of the 2020 virtual festival, Musikfest now regularly draws more than 1 million people here. Many are coming for the first time.

“So I’d like to think we’re sort of that door-opener [for people] to come back and explore all the attractions that the Lehigh Valley has to offer,” she said.

With the LVEDC's mission to market the region’s economic assets, the agency “wouldn’t be able to afford the type of marketing that Musikfest provides [for the region] by having a million people come in and experience this place,” Cunningham said.

Region's 'premier event'

Cunningham served as Bethlehem mayor from 1998-2003. During his first year in office a quarter-century ago, Bethlehem Steel shut down its last remaining operations in the city.

Musikfest was in its 15th year in 1998 and was “much more of a local festival” then, he said.

“It really played a very critical role of bringing the community together to celebrate and to recognize all the different elements and people that were in the community, and to give people hope beyond the economic closeout of [Bethlehem] Steel and many of the textile mills,” Cunningham said.

The “importance of Musikfest has somewhat changed over the decades,” he said.

Now, the festival “draws so many folks outside of the Lehigh Valley and exposes so many people to the quality of life here that it's become an even broader economic vehicle and marketing event” for the region, Cunningham said.

Musikfest is the region’s “premier event,” but Cunningham was quick to highlight the Lehigh Valley’s many other offerings, such as the IronPigs and Phantoms, Dorney Park, the Crayola Experience, Wind Creek casino and the PPL Center.

“It all works together,” he said. “And we're really lucky to have all of these attractions.”