It's the largest and longest-running multicultural festival of its kind in the world and, right now, it's in full swing in Winnipeg (Aug. 3-16).

"Folklorama is really a highlight of the summer here," says festival executive director Ron Gauthier. "It lets you travel around the world without leaving Winnipeg."

With 44 pavilions showcasing the food, song and dance of different countries and ethnic groups, Folklorama not only keeps Winnipeggers in town - it also attracts thousands of visitors each year from all over the world.

"The tourism impact is big because we're drawing people to the province and hotels, shopping malls, rental cars and different attractions are all benefiting," Gauthier says.

Photo courtesy of Edmonton Tourism/Edmonton Economic Development Corp.
Fire eaters perform at the Edmonton International Fringe Theatre Festival, an event that helps the city brand itself Canada’s Festival City.

"People come in for Folklorama and then they go to a Bomber game or the ballet or one of our many museums."

Every summer, festivals like Folklorama draw big crowds - and big bucks - to cities and towns all across Canada. With more festivals than ever before, local economies are seeing big benefits.

"There's really been an enormous growth in festivals just across the board," explains Richard Sutherland from the University of Calgary's faculty of communication and culture.

"You're seeing more of them organized, more people are taking part, they're increasingly a big part of tourism and some - like the Montreal Jazz Festival and the Toronto International Film Festival - have a huge impact on the economy."

Widely recognized as the most successful public film festival in the world and second only to Cannes in its overall importance, the Toronto International Film Festival (TIFF) has Hogtown businesses partying all the way to the bank.

"We have hotels and restaurants hiring additional staff to meet the demand and some bars and restaurants are even renting extra space to handle the overflow," says Maxine Bailey, vice-president of public affairs for TIFF.

"Everybody likes to look really good and pretty so we've also got increased spending in stores, salons, and limo drivers have to rent extra cars - these are the kind of things we hear about anecdotally that can't always be measured."

What can be measured is an annual boost to the economy of $67 million, including $33 million in tourism, according to a 2002 economic impact study.

The study found festival goers spent $6.5 million in bars and restaurants, $7.8 million at retail outlets and $2.8 million on travel within Canada.

With two dozen screens spread out across the city for the 33rd annual Toronto International Film Festival this September (4-13), organizers are expecting an even bigger economic hit this year.

Photo courtesy of the Folk Arts Council of Winnipeg
Cultural acts at Folklorama in Winnipeg, like these Serbian performers, attract hundreds of thousands of visitors.

"By spreading the event out we've gone from maybe using eight to 10 core hotels to using hotels all across the city this year, so all the businesses in those areas will also benefit," Bailey says.

"We're actually planning to do a new economic impact study this year to help (quantify) TIFF's impact not just on Toronto, but all of Canada."

In Western Canada, where the folk-festival circuit has always been a big draw, summer festivals are becoming a key way to market cities including Winnipeg, Edmonton, Vancouver and, increasingly, Calgary.

"We've seen a lot of new festivals in Calgary the last couple years - it seems like there's a festival every week this summer," Sutherland says. "We might actually catch up with Edmonton."

Leveraging its long history as a festival hotspot, Alberta's capital likely won't be outdone anytime soon. Cashing in on the festival fever, Edmonton has rebranded itself Canada's Festival City.

"It's our dominant message for leisure travellers and it's one of our key messages when reaching out for bids in conventions, because conventions want to go where there's an experience and we can offer that with festivals," says Edmonton Economic Development Corp. (EEDC) director of communications Kenn Bur.

"We've been very successful in branding our summer tourism season around the festival city brand. Festivals are now a huge draw for us and really contribute to the city's tourism industry, which is valued at over a billion dollars (annually)."

Trying to gauge the monetary impact of festivals and events to the city's economy, a 2006 study by the EEDC of 126 regional arts and festival organizations found that they spend $44.7 million on goods and services each year.

When visitor expenditures, pegged at over $79 million, were included the total tally rose to almost $124 million of Greater Edmonton's GDP.

"It's not just the number of festivals we have here, but many are truly world-class festivals - festivals you would expect to see in cities multiple times larger than Edmonton - and they're extremely well attended," Bur says.

Photo courtesy of the Folk Arts Council of Winnipeg
Filipino performer at Folklorama in Winnipeg.

In the tiny town of Pemberton, B.C., a short drive north of Whistler, attendance was so high at the inaugural Pemberton Festival at the end of July that traffic jams snarled for hours and even delayed some of the musical acts from taking the stage.

The three-day event - considered one of North America's biggest music festivals of the summer - drew in crowds of up to 40,000 people to see such heavy-hitting performers as Coldplay, Tom Petty, Nine Inch Nails, The Tragically Hip and Jay Z.

For the small Pemberton Valley community, with a population of 2,200, the influx of concert goers was expected to bring in an estimated $9 million to the area. While the total financial impact is still being tallied, some stores have reported a 50-per-cent increase in sales.

Other establishments, blaming the traffic tie-ups and logistical problems, claim they didn't see the business boost they were hoping for. Organizers are promising to fix the problems for next year in the hopes of drawing even bigger crowds as today's live-music craze continues.

"There's really a revival of interest in live performances as record sales continue to decline," says Sutherland. "Instead of just touring being a promotional support for record sales, concerts are now coming into their own right as a way for bands to make money and festivals like this are more important than ever."

Back in Winnipeg, attendance at Folklorama is expected to reach more than 450,000 pavilion visits. During its two-week run, organizers say more than 600,000 meals will be served and one million beverages will be poured - adding up to a big payday for local businesses.

"We have 44 pavilions buying all kind of food to cook in the pavilions and getting drinks and renting sound systems and tables and chairs and venues all over town, so just in terms of that it has a huge impact," Gauthier says.

"The pavilions alone spent over $2 million last year to run their pavilions and that money is all being spent with local businesses."

Factoring in tourism and other spending, Folklorama had an economic spinoff of $14.7 million according to a 2001 study - a figure now estimated to be closer to $20 million. In terms of the overall festival hit to the Canadian economy, those numbers are much harder to come by.

"It's very difficult to try and determine the total economic benefit," explains Sutherland. "A study done for Heritage Canada in 2005 references not only the lack of hard figures on festival audiences, but also the precise number of them."

One thing is clear - the benefits for local businesses can be huge.

"Any time a festival is in town, it's a great opportunity," says Bur of the Edmonton festival scene. "It depends on the type of business, of course, but there are lots of ways to get involved."

From providing goods or services to sponsorship and even selling items onsite, more festivals across Canada mean that there's more demand than ever before for partners in the business community.

"We've signed on seven new sponsors in the last two years and that's a lot," Folklorama's Gauthier points out. "More businesses are approaching us and I definitely think there's more opportunity out there that's not being capitalized on."

While experts agree that festival opportunities are expanding and worth taking advantage of, they warn that festival involvement isn't always a ticket to success.

"Trying to sign people up for credit cards at Edgefest (an annual Ontario rock-music festival) probably isn't going to happen," Sutherland cautions. "You have to take into account your target market and make sure the event is a good match with your product and company values."

Toasting the start of Folklorama, one product that's already proving to be a big hit in Canada's mosquito capital is the new Folklorama beer. Created by Winnipeg-based microbrewery and event sponsor Fort Garry Brewery, the lager is being sold at Manitoba liquor stores and festival pavilions.

"Our goal is to have it on an annual basis for a month before the festival and then during the event," Gauthier explains.

"For us, it's just another way for people to get excited about Folklorama and for Fort Garry, they've got a new product, they're selling more beer, they've got more advertising and everyone is talking about Folklorama beer. How do you put a cost on that?" Long after the festival fun is over, some sponsors, including Second Cup, are hoping their involvement with Folklorama will help ring up sales in their stores.

The coffee retailer is presenting the event's travel guide - a passport that people can get stamped at each pavilion as they take a cultural tour around the world.

"We try to do a lot of sponsorship leveraging, like with the Second Cup Folklorama travel guide where you get it stamped, take it into the store and get your coffee upsized for free," Gauthier says. "It's just another way sponsors can benefit."

For a festival that started 39 years ago with the intention of being a one-time event to celebrate Manitoba's centennial, Folklorama is perhaps one of the best examples of how a summer party can have a big payday - a payday that's only expected to get bigger as the popularity of festivals continues to rise.

"People are interested in entertainment but the great equalizer is that many of these festivals cost very little for a days' worth of great entertainment and some of these festivals are actually free," says EEDC's Bur.

"That's no doubt a big part of their continued appeal and that's why we will continue to see the festival scene thriving."

(Tess van Straaten can be reached at tess@businessedge.ca)