A councillor has claimed about 10,000 free tickets were given away at Mudtopia and could have contributed to the council picking up a $437,000 tab.

The money was lower than the $550,000 budgeted for but the festival only made $117,000 despite about 14,000 visitors including 12,000 mud passes.

Preliminary figures released at the strategy, policy and finance committee meeting yesterday by arts and culture director Stewart Brown show Mudtopia cost $1.48 million and had made $1.06m but that also included government funding, sponsorship and grants.

Read more: Inaugural Rotorua Mudtopia Festival deemed success
Mudtopia organisers hopeful despite slow ticket sales

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Brown said the event was also up against Crate Day, concerts and it had struggled to attract sufficient sponsorship with only $35,000 secured - a shortfall of $60,000.

Acting operations group manager Henry Weston said the concept was untested but he was positive about its future because families had enjoyed it.

''Families in particular embraced the concept, it was quite phenomenal... it was a very happy atmosphere.''

Most councillors agreed and believed Mudtopia would only improve over time but others questioned the reasoning behind giving away free tickets.

Councillor Charles Sturt congratulated staff involved with the event and remarked it was similar to the Tulip Festival ''everyone laughed at us''.

But councillor Raj Kumar said giving away free tickets and buses while the sales were poor may put people off actually buying them in the future because they could ''hang out and wait''.

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However councillor Rob Kent was more scathing and said: ''If you had 12,000 passes and only made $117,000 in revenue by my calculation you only charged for about 1500."

He addressed this to committee chairwoman Merepeka Raukawa-Tait who said ''you may be right''.

Kent told the Rotorua Daily Post he wanted to see ''much more of a business case if this is the sort of return we have had with the tickets''.

''I find it very disappointing. Put it this way - I can think of a lot better uses for $437,000.''

Councillor Tania Tapsell said originally she was sceptical and one of the only councillors to vote against Mudtopia.

''But I went along on the day and was thoroughly impressed by the turnout. I think the target market we were aiming for which was over-18s should have been the families because it was clear that is what it was about and why it was a success.''

When compared with other events such as Lakeside that was the nature of the cost, she said.

''At the end of the day we are committed now and majority rules in these decisions. That was democracy and it was going to go ahead.''

Meanwhile other data revealed a Spa Wellbeing Pamper sold out, 2000 attended the Saturday night concert. Wider impacts estimated 1556 bed nights and an economic accommodation contribution of $285,000 as well as retail, food and beverage spend.

Preliminary financials
• Total revenue $117,000 (concert and mud pass) shortfall of $460,000 (within the $500,000 approved by council)
• Challenges/issues, event timing, proximity to Christmas, oversupply of concerts in the marketplace
• External funding $907,000 – a shortfall against budget of $80,000
• Total cost on revised budget: $1.48m
• $1.06m total revenue – Crown/MBIE, NZCT, sponsorship and grants, event takings
• Total costs for council for Mudtopia festival $437,000
• $110,000 start-up costs including brand development, website development, marketing and creative, equipment
- Source Rotorua Lakes Council