Mardi Gras 2012–The Insane Party That Fuels Louisiana’s Economy

Mardi Gras 2012Photo: Mark Gstohl

Mardi Gras 2012 is upon us and this Fat Tuesday will likely prove to be a rousing success for the State of Louisiana and the City of New Orleans. While news generally focuses on Mardi Gras beads and how women earn them, fewer journalists discuss the economic impact of Mardi Gras.

The unofficial holiday is something of a cottage industry for the city. But just how big is the economic impact of Mardi Gras?

The Economic Impact of Mardi Gras

The holiday nearly synonymous with Girls Gone Wild tapes is big business for Louisiana. The Rex Organization estimates that in 2009 alone, the festival took in over $145 million directly. The indirect economic impact of Mardi Gras totals up to more than $322 million for New Orleans alone, or 1.61 percent of the city’s GDP.

The organization estimates that this is a return on investment of more than $4 for every dollar of public money spent. Clearly, this festival of revelry is big business for the city. Other sources estimate spending at over $1 billion annually. The effect of not having Mardi Gras would be devastating on the city and state.

More Than Mardi Gras Beads

The iconic beads associated with Mardi Gras are clearly only a tiny fraction of the spending on Fat Tuesday. For instance, the city rented out over 17,000 rooms in 2009. Occupancy rates are sometimes as high as 97.8 percent, with an average of 79.4 percent for the Mardi Gras season as a whole.

At an average room rate of over $170 per night, hotel revenues for 2009 added up to more than $35 million, quite an influx of cold, hard cash for a struggling city. Sometimes hotel takes alone were more than $4 million for a single night.

It’s not just out of towners who are spending money, either. Liquor sales in particular spike during the season of revelry. Further, people often spend money on small gifts, especially for children.

The centerpiece of local spending, however, are the Krewes. These are organizations that sponsor the parade, generally through having a float in one parade or another. All told, Krewes pump more than $10 million into the local economy through costs associated with floats, parade fees and other expenditures.

Krewe spending isn’t limited to Mardi Gras season, however, with Krewes spending a combined million dollars the rest of the year. These Krewe figures also only include spending by the Krewe proper. Individual Krewe members are estimated to put over $11 million into the local economy on their own.

Fat Tuesday and Public Services

Of course, anyone who has been to Mardi Gras or knows anything about it knows that things can get more than a little rowdy, especially in the quarter. This means that the season also includes an increased amount of spending by the city in the name of keeping public order.

When evaluating the economic impact of Mardi Gras, the spending on the part of the city — an outflow of cash — mush also be factored in. Still, the increased spending related to Mardi Gras (police and fire services, sanitation, public works and park department spending) total a mere $3.3 million, or about one-third of what individual Krewe members spend on their own. There is also some lost revenue for businesses that cannot maintain regular hours during the season.

Mardi Gras 2012

Mardi Gras 2012 is shaping up to be the biggest one yet and will likely break previous records in the field. Especially because the holiday is so closely associated with the city’s “brand image” it can be difficult, if not impossible to estimate the full economic impact of Mardi Gras 2012. Still, Fat Tuesday seems to be a net positive for the city of New Orleans by any measure.