If the business has shelled-out money they cannot recoup, they indeed have cashflow problems, and those that threaten will be dealt with first. Punters, by and large, will be slower than businesses to respond - the Folk world is a trusting place until bitten.

Whatever Pickering Festival do, it will be event-driven because they probably don't have cash left over from reciepts, and were probably banking on late sales anyway.

Whether you like the way they are doing it, or not, the only sensible way to deal with it is to understand their position, and act. Which in this context is to give them a big motivational push. Like publicity, like the law. And do it before there is literally no money to be got, law or no law you can't get it if they declare bankrupcy. Except maybe pence in the pound.

Would credit card payments protect you in this context (within a month of the festival)? I don't know.

And was this the first year of the festival? If it was, caveat emptor.