Carnival = cash

mardi_gras.gi.top.jpgBy Sonya Stinson, contributing writer


NEW ORLEANS (CNNMoney.com) -- New Orleans' Mardi Gras is often called the "world's largest free party," but for the people who build the parade floats, make the costumes, serve the refreshments and put up the out-of-town guests, it's big business.

Carnival means cash for companies like Haydel's Bakery, which sells about 50,000 king cakes during the festivities, and Giacona Container Company, which makes the souvenir cups that are tossed from parade floats.

Where partying is big business
From masks to king cakes to beads, fueling Mardi Gras' revelry is a multi-million dollar business for these New Orleans companies.

Mardi Gras is "almost recession proof," says Barry Kern, president and CEO of Blaine Kern Studios, which designs and builds floats for all of the major Carnival krewes.

But Kern's year-round business, which includes tours and corporate events, has definitely felt the pinch. "It was almost like a spigot got turned off," he says of the past year. "A lot of that corporate business disappeared. We're seeing an uptick now, and I see some light, particularly within the last several months."

A pair of Tulane University professors recently set out to calculate the direct economic impact of Mardi Gras, the 12-day parade period that concludes this year with Fat Tuesday, on Feb. 16. Their tally: $147.7 million.

That includes more than $23 million spent by Carnival krewes, a $26 million jump in sales of alcoholic beverages, $2.2 million in extra spending on groceries and just over $1 million in additional jewelry sales -- after all, krewes have to buy gifts for their royal courts. Special holiday publications, tours and hotel bookings were also included, though restaurants and street vendors were not.

"We were not able to gather all of the data this year that we would have liked, so we're hoping to have a greater degree of participation next year," says Tulane economics professor Toni Weiss, who co-authored the study with Paul Spindt, from the university's business department.

At the French Quarter's legendary Galatoire's Restaurant, chief operating officer Melvin Rodrigue says that although his total 2009 sales were down 5%, business thrived through Mardi Gras. Like Kern, he sees signs of recovery in the local hospitality industry.

"Corporate meetings were nearly non-existent last year, but they are starting to come back," Rodrigue says.

Massoud Dalili, artist and owner of The Mask Gallery, is still reeling from the triple whammy that wiped out tourist traffic to his French Quarter studio.

"We had Katrina hit us first," says Dalili, who handmakes leather and feather masks worn throughout the Carnival season. "Then the gas prices went up and people quit traveling to try save money. Then the housing [downturn] was another blow."

Dalili adjusted by lowering his prices to rock bottom, negotiating with suppliers for price breaks on his raw materials and diversifying his inventory. Sales were off 40% in 2006 -- the year after Katrina hit -- but he says they started to pick up again last year.

New Orleans is becoming a year-round festival destination, and the local hospitality industry hopes some of its newest creations will help make up for lost corporate and convention bookings.

But more visitors doesn't automatically translate into more business revenue. One of the city's fastest-growing special events, the annual French Quarter Festival music celebration held in April, saw its economic impact decrease from 2008 to 2009, even though attendance was up significantly.

"People want to get out, and they want to enjoy themselves even through this very difficult downturn in the economy," says John Williams, director of the University of New Orleans's Lester E. Kabacoff School of Hotel, Restaurant and Tourism Administration. "But we do see a change in their spending habits." To top of page

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QHow does a florist sell more in this economy? We changed our business to designing weddings and events only, as the everyday flowers are not selling. We had to throw out too much product at the end of the week -- flowers are perishable! More
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