Gas, economy leaves many in no mood to party

updated 4:26 p.m. ET July 8, 2008

MILWAUKEE - For the first time in more than 20 years, the organizers of the Harbor Fest musical festival in Racine, Wis., were forced to cancel their seminal summertime event on the shores of Lake Michigan.

Sure, attendance has dwindled in recent years, but rising costs and a 40 percent drop in corporate sponsorship dealt the final blow. "It boiled down to, if we can't do it the right way, let's just not do it," said Joe Mooney, the event's organizer for all but one year.

Mooney's misery has company. From a hot air balloon festival in Jackson, Mich., to parades in Clearwater, Fla. to a seafood festival in Annapolis, Md., organizers grappling with the effects of a weakening economy are calling it quits. Or at least putting off their events until next year.

Corporate sponsors are pulling out as they worry about their own financial well-being, let alone donating money to a festival. Organizers are reluctant to raise ticket prices since families shelling out $4-a-gallon for gas may not want to pay the extra money. And costs for hiring bands, vendors and renting grounds are rising.

There are tens of thousands of festivals and parades across the country each year, ranging from events with a few balloons and a tent to those with rides, musicians and acres of vendors. Summer is the peak season, said Ira Rosen, the North American director of the International Festivals and Events Association.

The economic impact is big, with festivals generating hundreds of millions of dollars for organizers, many of which are nonprofit and donate proceeds to charities. They also boost local businesses, including hotels, restaurants and retailers. As many as 80 percent break even each year, Rosen said.

This year, festivals are weighing their options and studying the impact of tough decisions like raising prices. It's unclear how many have decided to cancel or delay their events for a year, though attendance so far has been flat, Rosen said.

A number have opted to remain free but request donations to help cover costs.

Problem is, not everyone is willing to pay. Donations didn't generate enough cash this year for the Sarasota Arts Day festival, and it lost so much money that organizers decided to shelve next year's event.

The festival, which normally draws about 25,000 people to downtown Sarasota, Fla., during a weekend in January, doesn't charge attendees but suggests they make contributions. Those dropped by half to just over $15,000 from last year, and the fair lost $30,000, said Martine Meredith Collier, executive director of the Sarasota County Arts Council, which organizes the fair. The year before, it lost $3,700, so this year's loss was nearly 10 times that.

"You can't keep doing that and stay in business," Collier said.

In Racine, Mooney and other organizers decided it would be best to table their music festival this year with the hope of bringing it back next year. As they looked at organizing this year's event, they realized they'd struggle to find ways to pay the more than $300,000 needed since corporate sponsorships were dwindling, he said. Many of them were local, Racine-area businesses, such as grocery stores.

Attendance wouldn't help make up the shortfall since it was about 20,000 in recent years, down from 30,000 years ago. Organizers also considered raising the $8 ticket price, perhaps by 50 percent to $12, but feared that would turn people away.

Longtime Harbor Fest-goer Drew Goldberg, 42, hopes the festival is back next year. At past Harbor Fests, he's seen acts like Blue Oyster Cult and Grand Funk Railroad for far less than he'd pay to see them elsewhere. Goldberg believes the festival should have been put on, even if on a smaller scale.

"They could have maybe not had a major band and just showcased local acts this year," he said.

This year would have marked the 43rd anniversary for the Maryland Seafood Festival, which draws about 20,000 people over a weekend each September.

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