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 Oil and gas producers, who have slashed millions in capital
expenditures and laid off thousands of workers, are cutting back
on everything from advertising to parties at the 10-day festival
which runs to July 17, while spending is down at popular
restaurants.
Extravagance could be frowned upon by investors following the
evacuation of about 90,000 residents in the Fort McMurray,
Alberta, fires and the rebuilding of homes expected to take
months or even years.
The usual big corporate events with free flowing bars have
either been toned down or canceled.
"Given the economic downturn, we didn't want to throw a lavish
party this year," said John Chambers, chief executive of
investment bank FirstEnergy Capital Corp, which canceled its
annual party for the first time in two decades.
"I think people were expecting something more subdued in this
environment, so we thought it was more effective to donate
instead." FirstEnergy, which has raised more than C$3 million
for 50 different charities at its parties over the years, will
instead donate C$100,000 to four organizations, Chambers said.
Canadian Natural Resources Ltd also canceled its party, while
Cenovus Energy Inc scrapped its Stampede event for the second
consecutive year, company representatives said.
At the Stampede, attendance is on target to hit their average
1.1 million to 1.2 million, said Theresa Howland, director of
consumer marketing and sales.
"We certainly expected to work harder this year to remind people
why they can't miss this event," Howland said. She said
attendance was up on the first two days at the weekend.
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Howland said sponsorship revenue was "even compared to 2015" with
lower contributions from the oil and gas sector offset by new
advertisers such as McDonald's Canada. Sales of high-end infield
suites were down, however.
At Cowboys, an establishment that hosts dozens of parties and bands
and is minutes from Stampede grounds, corporate bookings from the
oil and gas sector have fallen by 60 percent in recent years, said
Paul Vickers, majority owner of operator Penny Lane Entertainment
Group.
"We've seen budgets fall a lot because of the soft economy. If the
average guest check last year was $55 a person, it's probably closer
to $38 this year," Vickers said.
The mood for the Stampede was set earlier this year after the GMC
Rangeland Derby Chuckwagon Canvas Auction – a de facto litmus test
on the state of the economy - brought in just shy of C$2.3 million,
nearly $500,000 lower than a year prior, and the lowest showing
since 2010.
"The mood is a bit different this year. Everyone's a little more
conservative with their cash," said Kofi Ahulu, 39, a long-time
attendee. "But, all in all, it's Stampede and that's a big driver
for Calgary."
(Additional reporting by John Tilak in Toronto; editing by Grant
McCool)
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