Calgary businesses expect slower Stampede as oilpatch pulls back
Partygoers pose in a party tent run by Cowboy's at the Calgary Stampede president's dinner in Calgary, Friday, July 6, 2012. (Jeff McIntosh / THE CANADIAN PRESS)
Lauren Krugel , The Canadian Press
Published Wednesday, March 11, 2015 9:48PM EDT
CALGARY -- This was supposed to be the year that the "ranch" would be booked up again for the Calgary Stampede -- but then oil prices fell by more than half.
Caterer Paddy Sorrenti said by early December, a full roster of clients had confirmed they wanted to use the site -- a cowboyed up parking lot in the downtown core where pancakes are flipped and beer is poured
But with three and a half months to go to Stampede, Sorrenti says he's in "limbo." He figures six of the 10 events that had been booked are going ahead, but some of those might still be scrapped.
"It's a little nerve wracking," he said.
The Stampede is party time for corporate Calgary when suits are traded for jeans and silk ties swapped for cowboy hats, but with the lower price for oil, the mood to celebrate has been subdued.
Oil prices have fallen from highs above $107 around the middle of last year to the $50 range.
It costs Sorrenti around $20,000 a day to run the ranch site, including the lot itself, generators, portable toilets, tents and tables. If not enough parties are held, it might not be worthwhile.
"I guess the jury's still out for some of these parties. They're still determining whether it's feasible to do it or whether it's responsible to do it. I'm still waiting."
It took a long time after 2009 -- when the financial crisis hit and oil hit the $35-a-barrel range -- for bookings at the ranch site to recover.
"This would have been the first year since 2008 that we would have had that site full again," Sorrenti said.
"It was almost like we were just about there again and then the price of oil went down and these guys pulled right back out again."
While oil companies pull back, property managers "aren't batting an eye." That means Sorrenti might be able to pick up some new business, without having to worry about the cost of running his own venue.
It's a similar story for David Howard, whose company, The Event Group, gets about 10 per cent of its business from Stampede.
He says 40 per cent of his clients have cancelled their parties all-together for this year, walking away from thousands of dollars in deposits. And he figures events that are going ahead are seeing their budgets cut by about the same proportion.
"We've gone from prime rib to burgers and dogs," said Howard.
But while some oil companies are scrapping their Stampede parties, they're holding other types of events for staff and customer appreciation -- charitable concerts or keynote speakers, which Howard also plans.
"On one side of our business, certainly we've taken a kick. On one side, it couldn't be more profitable," he said .
It's not just about dollars and cents. Companies are wondering if holding their Stampede shindigs gives off the right impression, said Howard.
"You can imagine that if you're a shareholder at XYZ Oil and the price of their stock has dropped 30 points, they've laid off 10 per cent of their workforce and then suddenly they put on a million-dollar Stampede event," he said. "It shouldn't happen, quite frankly."
Cowboys, the bar known for its Stampede-Ground festivities, has a clock on its website counting down the days, hours, minutes and seconds until the 10-day festival kicks off in July.
Paul Vickers, with Cowboys owner Penny Lane Entertainment Group, said he's not expecting to see a dent in business. He said the slowdown appears to be hitting the higher-end of things, and Cowboys caters more to the $5 beer crowd than the $100-bottle-of-wine set.
Corporate clients are spending for Stampede -- they're just spending more wisely, as they look to impress potential customers and financiers.
"It's not just a shot-gun blast -- throw money everywhere and hopefully a customer ends up in your lap," he said.
"You've got important clients coming from Toronto, Texas and you'll want to impress them. You want to let them know you have a solid company and you're doing well."