Some people would never visit Gilroy, Calif., if not for the Garlic Festival, or Austin, Texas, without the South by Southwest music and film festival. Such events can be effective ways to draw visitors that inject money into local economies. Yet, at a time when cities and counties could use that boost, some annual events are suffering.

Festivals and events are calling cards for some communities, says Steve Schmader, president of the Boise, Idaho-based International Festival and Events Association (IFEA). But, sponsorships are crucial, and a lack of them has led some local governments and organizations to cancel their events. “If a company is laying off employees, they are hesitant about sponsoring an event,” Schmader says. Organizers of the Kansas City Rhythm and Ribs festival, for instance, canceled this year's June event, though they plan to revive it in 2010.

Some states are decreasing funding for local events. And, cities such as Philadelphia and New York are bolstering their bottom lines by increasing fees for event-related services, such as street cleaning and police.

Indio, Calif., which has dubbed itself “City of Festivals,” hosted the annual Coachella Music Festival in April, drawing more than 160,000 visitors. To staff and plan the event required 125 city employees from the fire, police, special events, building and safety, public works and permitting departments. In turn, music fans filled nearly every hotel room in the area at a higher-than-usual room rate and spent millions of dollars during their stay, according to Glenn Southard, Indio city manager.

The city also manages the winter Tamale Festival, while the county puts on the Date Festival, both of which attract more than 100,000 visitors each. “Some festivals were born during tough times years back to try to bring people to the community, and all have grown over the years,” Southard says.

IFEA, along with George Mason University, is conducting a study this year to determine the economy's effects on festivals and events. “Down the road, this time may remind people of the importance of community festivals, even if some close,” Schmader says. “They are important to bring normalcy back to communities.”

Jennifer Grzeskowiak is a Laguna Beach, Calif.-based freelance writer.

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