CALGARY (Reuters) - The Calgary Stampede, the annual rodeo and networking extravaganza in Canada’s energy heartland, is a tamer affair this year after a two-year slump in oil prices and wildfires in May that displaced thousands of people in the country’s costliest natural disaster.
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.
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