Byron Writers Festival, which celebrates its 20th anniversary next month, owes its thriving existence to Hanley, a leading agent and business coach who moved to Byron Bay, the famous NSW beach town, more than 30 years ago.

A Shire boy from Sydney, he had studied some Australian literature for his university degree, published a few short stories, and "fell into real estate by accident. I would have left 20 years ago if I hadn't found something that nourished my soul".

In Byron Bay he met his wife, and while their daughter was young he took a break from business to follow his passion.

"I was working in my studio at home, writing stories and listening to the radio, when I heard a call for anyone interested in setting up a writers' centre to come to Lismore. So I went up there with some others, and I ran that for a couple of years."

As president of the Northern Rivers Writers' Centre, Hanley thought the area would welcome a festival – the first and now largest of many that dot regional Australia – and worked with local businesses and writers such as Di Morrisey to get started.

His enthusiasm was fed by a visit to Adelaide Writers' Week, where he shared a cigarette with crime writer Elmore Leonard.

"The first year," he says, "I didn't understand how festivals work, so I made a list of about 20 writers I liked, not writers with books coming out. Our little hall had a capacity of 200 and we were lucky to have a full house at some sessions."

Writers jumped at the offer of a laid-back weekend in "the tropics". That festival in 1996 featured David Malouf, Robert Drewe, Eva Cox, Sue Woolfe and Helen Garner, who bought hot water bottles for the draughty cabins on the festival site.

In 1997 Frank Moorhouse told the local paper Byron Bay's "newest and freshest" festival would outshine Sydney and Melbourne. But that year, Hanley says, "we almost went broke. People said 'That's not how you run a festival', and we didn't sell enough tickets. So I took the hat round to local people, and some of them are still sponsors."

"Our model is completely different from other festivals," he says, with funding from the Australia Council for the Arts and Arts NSW making up 10 per cent of the budget.

"Basically we're funded through events and private partnerships with different organisations, which makes us robust, because if you rely on government funding and it's taken away you shut down."

As principal of Byron Bay First National, Hanley brings essential business nous and connections to the festival. Despite his modesty, he boasts that Byron was the first to have children's and schools' programs (inspired by his daughter), first to sell tickets and to survey audience reaction.

Jill Eddington, now the Australia Council's director of literature, helped build the festival as director from 2000 to 2006 and says Hanley is "a visionary" whose "genius was to focus on Australian writers ... He is incredibly brave and tenacious while appearing to be calm. He is very generous and an absolutely passionate lover of literature."

As a child Hanley suffered an eye disease and was told he would eventually go blind. But in his 60s he still reads with one good eye and makes light of his problem. "It's a bit weird having a half-blind real estate agent running a writers' festival," he jokes.

Despite some unsteady years and variable weather, from balmy sunshine to a flood, the festival grew rapidly. In 2015, individual visitors to the three-day event reached 3000 a day – 10 times more than a decade earlier, says Hanley – and a total of 65,000 "bums on seats" at sessions, compared with 109,000 at Sydney Writers' Festival. While most come from north-east NSW and south-east Queensland, a third travel from Sydney and Melbourne.

With most events held under marquees at a beachfront resort, the festival keeps its relaxed atmosphere and focus on Australian and local writers, musicians and artists. International guests have crept onto the program as its reputation matures.

Next week's festival (August 5-7), under director Edwina Johnson, has almost 150 speakers including US political satirist P.J. O'Rourke, African American writers Jeffery Renard Allen and Angela Flournoy, Indian Muslim poet Salma and Spanish crime writer Victor del Arbol.

Hanley will present sessions on philanthropy and multicultural influences, and talk to journalist Annabel Crabb, former MP Tony Windsor and Jesuit priest Frank Brennan. This is his 20th and final year as chairman of the festival board because, he says, "Unlike politicians and sportsmen, I think you should remove yourself from an organisation at its best".

Jeni Caffin, who directed the festival for five years, says, "I have never met anyone whose respect for writers surpasses that shown by Chris." She recalls an onstage conversation between Hanley and short story writers Cate Kennedy and Nam Le as "one of the best I've ever heard. It's like eavesdropping on an intimate conversation between friends ... a reminder [for moderators] to listen, to allow the writers to interact with each other and to go off the rails if that is what is wanted."

Among Hanley's memories of great moments at the festival are events hosted by the ABC's Kerrie O'Brien; a song performed by Missy Higgins and live-streamed; Simon Marnie asking Bob Ellis a question proposed by his son, "Why are you such a strange f---?"; and his own interview with novelist DBC Pierre, who stopped after one question and said, "I've never been asked that before".

"An introvert is only a good question away from being an extrovert," he says.

Writers' festivals are changing, Hanley says. "We made a mistake: they should have been called readers' festivals. They're going to be streamed, they're going to be more interactive and include arts of other types. They might shorten up as people's attention span changes. But festivals are about connection and conversation and that's not going to change."

Byron Writers Festival runs August 5-7. See the full program and buy tickets at byronwritersfestival.com