Canadian Tulip Festival: Back in bloom

Written by ProfitGuide Staff

For many winter-weary Canadians, tulips are among the earliest harbingers of spring. Spearing greenly out of winter beds, the majestic flowers hold the promise of longer and warmer days to come. For the City of Ottawa, the annual floral explosion has also blossomed into an economic bouquet: The Canadian Tulip Festival.

Ottawa’s perennial spring celebration has roots dating back to 1945, when the late Queen Juliana of the Netherlands gave our nation’s capital 100,000 tulip bulbs as thanks for Canada’s support of the Dutch during World War II. The gesture marked the beginning of a stunning flower show that eventually grew into an important outdoor festival attracting some 600,000 visitors during its two-week run each May, generating as much as $60 million in economic activity.

Two years ago, however, the venerable event almost died. A hodgepodge of disparate attractions combined with a risky business model and extreme weather, left the non-profit with successive years of financial flops. Burdened by debt, in October 2006 the festival filed for bankruptcy protection. Now, 18 months later, the Canadian Tulip Festival is blooming again, but its story serves as an important reminder of how easy—and dangerous—it is for enterprises to stray from their roots in the name of growth.

The Ottawa Board of Trade formally launched the Canadian Tulip Festival in 1953, positioning the tulip as a symbol of international friendship and peace. Over the next 10 years, flower enthusiasts from around the world flocked to Ottawa to see a staggering display of more than two million flowers, plus other city attractions.

As the flower display grew (Queen Juliana sent Ottawa 20,000 bulbs every year), so, too, did the scope of related attractions. By 2004, the festival’s annual budget was $2 million—derived from local and federal government grants, corporate sponsorships, ticket sales and merchandising—in support of a parade, regatta, craft show, fireworks displays and concerts.

The musical events showcased big- name talent. Liberace opened the event in 1972. Tiny Tim tiptoed through the Tulip Festival in 1984. Great Big Sea took the stage in 2002, and The Guess Who in 2003. Marquee acts cost a lot of money but can also earn a lot of money, says Doug Little, the festival’s marketing and communications director for the past 10 years. Great Big Sea, for example, commanded $70,000 but attracted a sold-out crowd of 9,000, the biggest audience the festival had ever enjoyed.

Despite such success, says Little, the concerts carried an unacceptable degree of risk. The festival paid $186,000 for The Guess Who, but advance ticket sales were slow and bitter weather kept last-minute customers away. The show ended up losing $100,000. To their credit, says Little, the organizers tried to address the problem. The following year, they bypassed the big names for a more modestly priced act. The move backfired; the less celebrated band drew a smaller audience, and bad weather once again torpedoed the evening.

“In 2004, the weather was bad. In 2005, it was really bad. And in 2006, it was even worse,” says Little. Despite a bailout of $75,000 from the city, in 2006 the festival’s coffers held just $65,000 against debts of $750,000.

In hindsight, Little says, the festival had lost its focus. “The model had become too broad. We mounted a craft fair, held huge music concerts,” he says. “What did that have to do with tulips or the Dutch royal family? Those of us who were in the thick of things simply couldn’t see a way to stop the slide.” On October 26, 2006, the festival filed for bankruptcy protection.

When the trustee put out a call for a green thumb to bring the perennial event back to life, David Luxton answered. Luxton is no horticultural genius, by his own admission, but he seems to have a talent for cultivating successful businesses. Currently president & CEO of Allen-Vanguard, an Ottawa-based manufacturer of bomb-detection systems, Luxton’s previous management experience includes building Simunition Technologies Inc., a defence- and security-sector company, and The Business Media Network Inc., which produces a chain of city business magazines and trade shows, including the Ottawa Business Journal (OBJ). His relationship with the festival dates back to 1995, when OBJ was a festival sponsor.

“Running the festival wasn’t on my list of things to do, but clearly the event was in distress and needed help,” says Luxton. To satisfy creditors, Luxton initially injected $35,000, and then followed that with $215,000, buying the festival time to regroup and some much needed goodwill from disaffected former supporters.

While the festival formula was failing for a number of reasons, says Luxton, one of the most notable factors was the Ottawa climate. “Rain may be good for tulips, but not for festivals,” observes Luxton. “They were bringing in big names for outdoor performances in May, which, in this city, statistically, gets at least 17 days of rain. The odds were against them, and they weren’t getting any breaks.”

Along with government and business sponsors, the festival relied on ticket sales—$10 to $15 for the craft fair and a variable amount for the concerts—for a substantial part of its budget. “They had these big financial commitments to these [musical] groups,” says Luxton, “and if the weather was bad and the crowd didn’t show up, they would lose their shirt.”

Luxton also examined the festival’s target market, and concluded it might be aiming at the wrong customers. “Rock fans and craft-show aficionados: for that demographic combination, we were up against a potent array of competing events,” says Luxton, “notably, the Stanley Cup playoffs [exacerbated by the Ottawa Senators’ success], and an overabundance of annual craft-based events in the city. There wasn’t anything distinct or particularly compelling about what we were offering in these areas.”

Looking to rebrand future festivals, Luxton found inspiration in the past: “My view was that it made a lot of sense to go back to the roots of the festival to find a fresh approach.”

The board devised a new program reflecting the festival’s origins in international friendship. For the first time, the plantings were given historical context. The National Capital Commission mounted a Tulip Legacy Exhibit, which related the flowers to the history of the Dutch royal family’s refuge in Canada.

“The opportunity is to take the symbol of the tulip and make it mean more. I saw the festival as an opportunity to gather together the international community here in Ottawa,” says Luxton. “You have embassies here, and cultural communities that are extensions of that. You have federal institutions that have collateral interest in things to do with international friendship. We took that concept, and ran with it.”

The signature Tulip Ball opened the 2007 festival, as was customary. However, “Instead of a sit-down, rubber-chicken dinner in a boring venue,” says Luxtom, “it was held at the National Gallery.” Various embassies were invited to present their national foods, and the black-tie affair attracted ambassadors, CEOs, federal and provincial cabinet ministers, and media and arts personalities.

The rock concert and the craft fair were deep-sixed in favour of Celebridée, a series of public lectures modelled on the Chicago Festival of the Humanities, an event Luxton had attended. Billed as “an inquiry into ideas that matter to hungry minds,” Celebridée was hosted by Gov. Gen. Michaëlle Jean, and featured such luminaries as historian and author Margaret MacMillan.

Major’s Hill Park, a prominent location overlooking the Parliament Buildings, the Ottawa River and the Rideau Canal, featured an International Pavilion, in which 15 embassies set up booths showcasing their country’s culture and national cuisine. A small stage accommodated modest music and dance performances. “There were lots of things for children and families,” says Luxton.

To reduce the festival’s vulnerability to Ottawa’s climate, it was also weather-proofed. Celebridée took place at indoor venues at the National Arts Centre, the University of Ottawa and the National Gallery, and the events at the International Pavilion were housed in tents.

Another radical departure: admission to the festival’s events was free.

The moves paid off. At its peak in 2001, the craft fair—the only venue at which attendance was consistently logged—attracted 90,000 visitors. By 2006, the numbers had dropped to 7,000. Last year, attendance at the International Pavilion hit 125,000 visitors. What revenue was lost from the concerts and craft fair was regained on the pavilion grounds—the festival received 20% to 25% of each booth’s revenue.

Bigger crowds also caught the attention of potential corporate sponsors, a long-term benefit Luxton hopes to begin to capitalize on this year.

“The number of people who attended events at Major’s Hill Park tells me we’ve found the kind of product the public wants,” says Luxton. “It’s a rich mix of a kind that hasn’t been seen before. in Ottawa. It’s certainly a financially viable operation now.”

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