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"Tickets sales for this year's Edinburgh festival fringe have hit a new record, after a surge in the number of people spending holidays at home and looking for an escape from the gloom of the recession.

The Fringe Society said more than 1.85m tickets were sold for this year's event, an increase of 9% on the previous record, set in 2007, and 21% higher than for last year's disastrous event, which was hit by problems with its box office.

The scale of the improvement surprised fringe organisers. Many producers and residents had feared the significant upheaval by tram works cutting through the city centre and a dispute by refuse workers that left rubbish piled on kerbsides in the run-up to this year's festival would frighten off some visitors.

Kath Mainland, the event's new chief executive, said: "As this year's festival draws to a close, we can look back on a month of exceptional ticket sales and one of the best festivals in my 20 years in and around Edinburgh."

Many of the city's top venues reported steep increases in audience numbers. The Gilded Balloon said its sales rose by 15% from last year, boosted in part by staging large events such as the comedian Bill Bailey at the 3,000-seat Playhouse, one of Edinburgh's largest theatres.

Karen Koren, the venue's director, said many more local residents had bought tickets this year. Edinburgh's confidence has been hit by the collapse of Royal Bank of Scotland and HBOS last year. "My feeling is that the credit crunch, people not going away and the weather – although it hasn't been great, has been a lot better than last year – has all helped," she said.

The Stand comedy club, which put on critically received theatre for the first time, said its audiences had grown by 20%. Tommy Sheppard, the venue's director, said: "It's been a record-breaking year despite the fact we've had to operate behind an iron curtain imposed by the city's tram builders."

This year's fringe, which featured a slightly larger number of shows compared with last year, with 2,098 productions, also featured a far larger number of recession-busting cut-price shows and cheap deals to draw in audiences. The number of shows on the so-called "free fringe" jumped from 350 last year to 465 this year, and they were held at a larger number of venues. While some shows were selling all their tickets for £5, the Underbelly comedy venue cut its prices for two nights a week.

Mainland said: "From the fringe's point of view, this is absolutely fantastic. We needed to re-establish confidence.""
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