Displaying custom post types from one category

I have created custom post types called Directory, and have some categorized as Festival, and I have made a template page that should in theory display only those posts, using this code:

<?php  $args = array( 'post_type' => 'directory', 'category' => 'festival','posts_per_page' => 10 ); $loop = new WP_Query( $args );

while ( $loop->have_posts() ) : $loop->the_post();?>

However posts categorized as Venue are also appearing.

Any idea why?

Thank you

Al