Don't underestimate the hospitality bit. From the time the performer
comes into town until the time he or she leaves, they ought to feel
as if they're in a 5-star.

Now that means different things to different people, but when I've
hosted performers for a local folk club it's always been a nice
dinner (on me) at the local pub (bar and grill). Followed by
really nice guest-room accomodations with private bath. And up
early in the AM so they are awakened by the odor of a lavish
breakfast before getting on their way.

At Festivals, it means nice (and fun if possible) accomodations.
Like the days at Mystic when the Mystic Whaler was performer's
accomodations, at the back of the main concert site, with ample
ale snacks and all.

That and rides to and from public transport with reliable and
sympathetic people.

And hungry at 1AM? Well, no worries, the hosts will get you
to an all-night eatery.

Fees aside, it ought to be a great experience. And profitable.
But also fun.