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It's not a loss, it's one discretionary spending option that's not there anymore.
Unless it was anticipated to bring significant visitors from outside the metropolis.
It's absolutely not a hit to the economy in any way. Money not spent at a festival doesn't evaporate into thin air. People simply spend that money on other, similar things.
Plus the festival is organised by Live Nation Concerts, an American company, with tickets sold through Ticket Master, another American company (also owned by the same parent company Live Nation Inc) so the vast majority of the money spent at the festival wouldn't end up in the UK economy in the first place.
Merch? Overpriced drinks and food? Accommodation? Transport? Visits to other attractions while in London?
I guess if you put yourself in a position to be that dependent on an idiot like Kanye, you don't really deserve that money anyway.
I'm sure London will cope somehow
Why they canceled the entire festival?
Because he was headlining all 3 days. There is not a chance of getting 3 acts of similar clout to play at this short notice. At which point the event is far enough from what was advertised that they'd have to give refunds to the shitload of angry customers demanding them. Better to just cancel now.
Also it was speculated elsewhere that Kanye may get paid (by contract) if the festival happens, but not if the festival as a whole is canceled. It's speculative, but reasonable to assume Kanye had strong contract guarantees.
I know they canceled the festival, but why? They could easily hire someone else and move on
“Easily”? Not really.
The UK and European summer festival circuit is highly competitive. Those high-profile acts willing to do festival appearances (many aren’t) book years in advance.
Those who aren’t committed to the dates in question may have signed exclusivity window deals with other festivals precluding their appearance anywhere else.
The PR of being second-choice to a literal nazi isn’t something that gets agents beating down the promoter’s door.
Given the sunk costs involved, if they thought they could line up a replacement tjey would have.
It was billed as a festival but really it was Kanye and a few other acts.
That makes sense.
Maybe they had an insurance policy for if a headliner couldn't attend? In that case definitely easier for the organisers to just cancel and claim
That's a "no show" insurance, maybe they had a clause for canceling everything if Kayne couldn't act
maybe it makes a bigger statement and gets more headlines for the organisers this way.