The New Zealand Festival says it needs more than $500,000 from the Wellington City Council so it can keep operating at the same level, as the costs of attracting top artists and exhibitions rising.
Figures show the 2014 festival pumped $70 million into Wellington's economy, compared with $56 million from the previous festival two years ago.
The number of tickets sold was also up, from 110,000 to 116,000, and the event returned a small surplus.
But festival chair Kerry Prendergast said on Wednesday that is not enough to sustain the festival.
"Delivering a three-week festival in four weekends and with the costs of bringing international artists going up and up - without increased core funding and wanting to make ticket prices affordable, then parts of the programme need to be squeezed."
Ms Prendergast said $650,000 is needed from the council.
The president of the Wellington branch of Hospitality New Zealand, Jeremy Smith, said the festival is a huge event that showcases the capital.
"Very seldom do people just go to a show without going out for a meal or having a drink before of after the show, so it's not just about the show, it's about what people bring to the economy."
The council said it has not had a formal request for funding and will look at it when it is made.