Business owners, state officials fear impact of festival cancellations on state, local economy
27th April 2020 · 0 Comments
Like many business owners, Jessica Knox and her husband, Alonzo, co-owners of Backatown Coffee Parlour, depend on the city’s various annual festivals and other high-attendance events to ensure their company’s survival and success.
And like most of her entrepreneurial peers in New Orleans, Jessica is fretting about what the rest of the financial year might hold following the cancellation of most of the city’s marquis tourist events, such as Essence Fest and Jazz Fest.
The loss of Essence Fest, which this year has been cancelled due to the coronavirus pandemic, has been an especially crushing blow for the Knoxes. But they also know that the issue is bigger than any individual business.
“Essence Festival is one of our two biggest events, with Mardi Gras being the first,” she said. “We depend on Essence Fest to get us through the summer slump, as tourism is slow in New Orleans during most of the summer. Canceling Essence Festival will reduce our sales significantly,” she said. “However, we do understand that public health and saving lives takes precedence over business.”
On April 15, Essence Communications, Inc., announced that it had made the decision to cancel the 2020 festival in the interest of public health and welfare, but it was a reluctant call to make because it will impact many people on the ground in New Orleans. However, the company wanted to abide by local officials’ decision to protect the public.
“After continued monitoring of the evolving developments in the COVID-19 global pandemic and remaining in close contact and collaboration with our partners in the City of New Orleans and State of Louisiana, we are confirming today that we will no longer move forward with the 2020 ESSENCE Festival of Culture live experience – and look forward to returning to New Orleans in 2021,” the statement said.
“From the beginning, we have shared that the health, safety and well-being of our Festival-goers, local citizens and others who contribute to making the Festival such a unique experience were our top concerns and would be the foremost considerations in our decision-making,” the company statement said. “While we initially hoped that a reschedule from our July 2020 dates to later in the fall would be feasible, current information and projections by public health officials and agencies have made it increasingly clear that any large-scale events this year could potentially and unnecessarily put attendees and surrounding communities at risk.
“So, what would have typically been a very difficult decision for us was not because people come first, and we will continue to do everything that we can to serve our community during this time.”
Accompanying the company statement was one from Mayor LaToya Cantrell, who said that while this year’s festival might not happen, the future will hopefully bring better, happier times.
“ESSENCE and the City of New Orleans have a partnership that thrives in good times and is made even stronger in challenging times,” Cantrell said. “We share an uncompromised commitment to the best interest of our local community and our tourist community, and the priorities right now are providing support to those who have been affected by the disproportionate impact of the pandemic here in New Orleans and ensuring a safe and healthy environment for all.”
The 2018 Essence Festival attracted more than half a million attendees to New Orleans, with a local economic impact of about $4 billion. Add to that the influx of money brought by other events that will now not take place, like Jazz Fest and the NCAA women’s basketball Final Four, which was scheduled for earlier this month but was likewise nixed, and local businesses could be in for a very rough year.
That includes dozens of businesses owned by people of color, many of which are located in vulnerable, working-class communities with residents who depend on tourist revenue to make ends meet.
“In Louisiana, festivals are considered as a season just as spring, summer, winter and fall,” said Kelisha Garrett, the executive director of the New Orleans Regional Black Chamber of Commerce. “Financially, the wind has been knocked out of so many industries. Festivals impact almost every industry including logistics, construction, marketing, print, security, janitorial, electrical, public relations, rental, retail, artist, transportation, bars and of course our restaurants.
“The impact from cancellations are recognized by the culture bearers who share their skills and talent, to the restaurateur providing your favorite Jazz Fest meal. Often attending a festival is the sole reason for many who chose to visit our great city.”
Knox said her downtown business had already been shut down for a stretch recently for another reason outside of her business’ control.
“We were just trying to recover from being shut down a few days due to the Hard Rock collapse and low customer traffic due to the weeks of expanded street closures from the collapse,” Knox said. “As we thought we could recover, COVID-19 hit.”
Knox said Backatown has received an infusion of cash from loans in the wake of the Hard Rock collapse, but she said the business is still on rocky footing.
“We are hoping that in the months ahead we will be able to pay rent, utilities and staff,” she said.
She added that she and her husband are hoping to take advantage of programs and financial assistance being offered by governmental bodies, but that “the timing and restrictions [of those programs] could be an issue.”
“The Paycheck Protection program is providing a forgivable loan if you bring staff back,” she said. “However, unemployment is paying around $800 a week, which is about $20 an hour for a 40 hour week. Restaurants cannot compete with that. In addition, even if staff would be rehired, it would only be to sit in the restaurant as business has dropped at least 95 percent due to the pandemic.”
Lt. Gov. Billy Nungesser told The Louisiana Weekly that as the commissioner of the Louisiana Department of Culture, Recreation and Tourism, he has been traveling around the state filming PSAs encouraging residents to take “staycations” that can boost local businesses while also maintaining social-distancing practices and enhancing public testing that protect public safety and health.
“We’ve got to come up with a plan that makes the public feel safe when they go out to spend their money,” he said. “It ain’t like [the pandemic] is over. It’s just dragging on and on.” Nungesser stressed that many businesses in the state aren’t just facing a few months of financial stress – the economic impact of the pandemic could last well beyond 2020. That also includes the millions of dollars in sales tax revenue the state itself will lose.
“It’s going to take several years to recover,” he said. “We won’t make that [funding loss] up in one year.”
He added that “every week we keep things closed, more and more businesses are going to fail.”
Garrett said the NORBCC continues to push for more grants and subsidies “to assist small businesses so that we can jump start our economy when we are given the permission to open for business.”
She added that the chamber is staying connected with local Black-owned businesses in order to provide continuous updates of the situation as they come from all levels of government.
“At this point, business owners are trying to manage real life,” Garrett said. “This pandemic is so far beyond just the thought of their day-to-day operations. It is inclusive of the health and well-being of their family, employees, and associates.
“This crisis is like no other,” she added. “With a natural disaster, there is a sense of resolve that is able to be obtained. With this pandemic there is a constant fear of the unknown because these are roads untraveled.”
Another New Orleans business threatened by the loss of event revenue is Let Us Cater For You, a catering operation owned by Akasia Lee, who said her catering business relies heavily on the ability to appear at festivals and other large gatherings where they can introduce their food to the masses.
Lee said the steps various governmental bodies have taken to support small businesses have the potential to help struggling entrepreneurs, many of those programs – such as additional small-business loans – are accompanied by a fair amount of red tape and waiting for the gears of progress to start moving.
Lee said she agrees with the decision by local government officials to shut down gatherings during the first half of the year or so, but she added that by the fall, it might be time to consider letting major events occur.
She said that such positive steps must be made cautiously, carefully and with close monitoring, but she also knows that to a large extent, her financial fate, and the fates of countless other small businesses, are out of their own hands.
“You can’t force the government to do something it doesn’t want to do,” she said.
In the meantime, Lee said her business has focused, at least for now, on catering private events and just keeping their name out in the public in the hopes that they can garner at least some business if and when catering offers come along. Beyond that, it’s a waiting game.
“We just have to hold on to what we have,” she said, “and if we can get scheduled for any [catering gigs], we’ll just go ahead and run our business.”
This article originally published in the April 27, 2020 print edition of The Louisiana Weekly newspaper.
