Festivals are great and serve a number of functions ranging from providing some customer entertainment to siphoning IG $ out of the game. We like them.

Might I suggest a couple of other event ideas?

1. Casino and/or hardcore fairground that is 100% dedicated to games of chance.
IIRC it's been done. This is a good way to remove money from the game, as players with an unregulated addiction gene grind away at various rides or games of chance to win prizes that exist on a continuum from "unique" or "1 of 10 limited edition" skinning knives to the "lost vorpal lullaby blade of per'iel". So rather than put up shops (always welcome) and start the sales mill, why not create items whose value is difficult to estimate (because, even if small items, are limited edition or unique). Players will be willing to spend more for items they feel are limited edition. In the old days, each new fest brought items that we felt were limited edition or unique - but then we realized they would reappear in the next fest. If we were certain the items were going into the "rare" category immediately, might be fun to play for them.

2. Tournament events
Tournaments have a ton of potential. Given the correct environment (vibe), little PCs, and PCs who loathe fighting, may be interested in the potential to win big if they win, or walk away with a rare or limited edition consolation prize.

This one is more difficult to argue if the most important element is an event's economic impact on the environment. But there is so much potential.

In both cases, it only sounds like there would be a lot more work - there wouldn't be - per me - and having no experience you can take my word for it.