Canceled by COVID: Loss of 2020 Azalea Festival will cost Cape Fear economy millions

In 2011, an economic impact study by UNCW estimated the festival generates around $50 million annually.
Updated: May. 18, 2020 at 4:47 PM EDT
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WILMINGTON, N.C. (WECT) - One weekend each spring, it’s estimated close to 300,000 people flock to downtown Wilmington for the annual Azalea Festival.

For local retailers and restaurants, as well as street vendors, hotels and other small businesses, that’s more than a quarter-million potential customers strolling by, looking in windows, browsing menus and ultimately infusing millions of dollars into the local economy.

This year — it didn’t happen.

“Azalea Festival means everything to downtown and to Wilmington at large,” said Dane Scalise, chair of Wilmington Downtown, Inc. “It’s something that is imprinted in our history. It’s part of our character. It draws people from all over to come to our home and spend their time, spend their money having fun, springtime in Wilmington, and it’s just one of our institutions. So whenever you don’t have something like that, it’s painful. And quite frankly, I think that it’s impossible to quantify the magnitude of the loss of not having it.”

But there is some evidence for the financial effect of not having the festival.

In 2011, festival organizers and UNCW conducted an economic impact study that estimated the festival generates around $50 million annually. Adjusted for inflation, that’s roughly $57 million in today’s dollars.

For downtown businesses in particular, the festival provides a major boost of business at the start of tourism season — the original goal of the festival was to not only celebrate the beauty of the region in springtime, but help spur business activity in the historic downtown area.

Now, that extra boost won’t be coming.

“I think of the folks who make that little bit of extra money during Azalea Festival season, whenever they’ve got all those people coming in doing brunch, buying drinks at bars, staying at hotels with their family,” Scalise said. “We’re just not having that this time around and it’s making the magnitude of their loss that much more.”

Festival director Alison English said the decision to cancel the 73rd annual Azalea Festival was both difficult and simple at the same time.

“Emotionally it wasn’t easy, but when it comes down to the facts, it was a fairly easy decision,” she said. “We just couldn’t have those events and put people’s lives and health at risk.”

Organizers announced the festival would not be happening on March 13, and while some events such as the Garden Party were held virtually, and the major concerts have been rescheduled for the fall, English said they recognize the gravity of the effect canceling the event will have on the region economically.

“That impact was really a driving force for us trying to reschedule those events in the fall, because we know how important that is to local businesses, and also people that you don’t think about that are local businesses, but are vendors such as, party suppliers, and Rent-a-John’s and all of those things that rely on big events,” she said.

Both Scalise and English said while there have been years where the Azalea Festival has been curtailed by severe weather or cold snaps, there has never been an outright cancellation.

“There’s a massive difference between a total cancellation whenever no one comes in, zero, and a diminishment in the number of people that show up,” Scalise said. “It’s such an institution that even whenever there has been rain, even whenever there has been less than ideal conditions, you still get tons of people out there, and if nothing else, they’re still staying in hotels, they’re still going to a restaurant to get some food.”

The spending associated with the Azalea Festival not only helps propel local businesses into the tourism season, but it plays a significant part of public funding as well.

“Losing the Azalea Festival this year was tragedy for the entire community from a financial perspective, so many small businesses, hotels, motels, restaurants to the downtown businesses, and also of course from agencies such as the city of Wilmington,” city of Wilmington spokesperson Dylan Lee said.

Sales tax and room occupancy tax revenues spike during the festival as spending for both city residents and visitors increases.

The 2020 numbers are not yet in, Lee explained, so the exact financial hit the city will be taking with regard to tax revenues is not yet known.

However, in previous years March and April have brought in around $2.5 million each in sales tax revenue, and another $400,000-450,000 in room occupancy tax revenue.

That room occupancy tax amount, which in large part funds the Wilmington Convention Center, will be most affected, as hotels were closed except for essential personnel for the entirety of April and the first couple weeks of May.

There’s one portion of the city budget where the effect of the coronavirus shutdown and cancellation of the Azalea Festival is starkly clear: parking.

In just the three days during the festival in 2018 and 2019, the city brought in $32,243 and $34,227 in parking fees from street meters and public parking decks and lots.

Over the Friday, Saturday and Sunday the Azalea Festival was scheduled to be held this year, the city collected just $1,082.

“It’s really been a sad thing for the entire community to lose the Azalea Festival and any other large event,” Lee said.

Beyond the dollars and cents lost from not having the city’s marquee event, losing the Azalea Festival to a global pandemic is a shaky start to the most important time of year for the Cape Fear region economy.

“Most certainly everything is different this year, and losing the Azalea festival is the beginning of what is going to be a different summer tourism season in our community,” Lee said.

For downtown businesses in particular, the financial reality of the coronavirus is starting to sink in.

Unlike other occasions where major events have been pushed because of unforeseen circumstances — Riverfest had to be moved by more than a month in 2018 thanks to Hurricane Florence — Scalise said getting going again will not be a simple thing.

“The situation that we find ourselves in now is different because businesses have had to shut down or reduce their hours with their employees or go completely to curbside service, and that sort of modification only makes the gravity of losing Azalea Festival and the pluses of that that much worse,” he said.

It takes about 90 days for sales tax and room occupancy tax information to come in to agencies like the city of Wilmington and New Hanover County, Lee said, so it will be early July before the exact numbers start rolling in.

In the meantime, English said they hope the rescheduling of some of the Azalea Festival events will give businesses and the community something to look forward to.

“For us, it was so important to try to reschedule those events, and especially the downtown events, because we know how important the festival is to those downtown businesses. It’s hard, obviously, you know, we were trying to reschedule for the fall when there’s already events planned for the fall," she said. "So we’re trying to you know, work with those events and work with the city and figure out a way where we can all still kind of be downtown, have those events and really just multiply that effect of our economic impact.”

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