Hopes dim for holiday lighting firms (11:07 a.m. 12/8/09)
By Liz Farmer
Dolan Media Newswires
Baltimore — It’s beginning to look a lot like Christmas, but this year it might not be everywhere you go.
Landscapers and electricians who look to supplement their income by installing holiday lighting displays during the winter are having a rougher time of it these days.
As with much discretionary spending, business is down, and owners are increasing the discounts and incentives just to stay even with last year.
“It’s been hard on us for sure,” said Mike Post, owner of BJM Lighting, which serves the Maryland, northern Virginia and Washington, D.C., areas. “I think there’s a strong interest in displays, but people are just not willing to spend right now.”
Professional holiday lighting and display companies will light anything from town houses to mansions to commercial establishments. Prices can run from a few hundred dollars to $20,000 for a streetscape.
Pricing structures work differently for different companies, although $1,000 to $3,000 is a common range for a moderately sized home. Some companies lease their clients the lights and decorations; others sell their clients the equipment and store it for them year-round. Other companies charge by the hour to install lights.
Convenience is a big selling point, business owners said. A homeowner can have a different lighting design each year and forgo the hassle of buying replacement lights, climbing on ladders or rehanging lights that fall down in a snowstorm.
Ted Hall, president of Hallco Enterprises painting and a franchise holder with Christmas Décor, a national commercial and residential Christmas decorating company, said some of his clients live out of state and pay to have Hallco decorate their elderly parents’ homes in Maryland.
But convenience and the nostalgic appeal of holiday lighting are taking a back seat to the realities of the recession. Lighting companies began seeing the effects last year. Some customers weren’t returning, and the ones who did were spending less.
Hall said his holiday décor and lighting business, which serves Montgomery and Howard counties, fell about 35 percent to 40 or 50 clients in 2008. His painting business, which also serves Frederick County, suffered similarly, he said.
The fall in business has forced Hall to lay off nearly half of his employees this year, going from 15 workers to eight.
And this year’s holiday decoration business is looking just as thin. The customers who are returning are spending about one-half to two-thirds what they spent in previous years. Many are just paying for the lighting displays and hanging the garlands and wreaths themselves.
To counter the decline, business owners have been adding incentives this year to get customers to commit early. BJM Lighting offered 25 percent off to those who scheduled an installation before Thanksgiving. Hallco offered 22 percent off to first-time customers who installed before Dec. 1 and gave them 10 percent of their purchase back as credit to be used toward next year’s installation.
And the business may not pick up next year either. According to Richard Clinch, director of economic research for the Jacob France Institute at the University of Baltimore, discretionary spending is one of the last categories to recover from a recession. One of the first signs of recover is the employment rate, he said.
Maryland’s unemployment rate is 7.2 percent while the national rate is about 10 percent.
“This falls under the category of very, very discretionary,” Clinch said. “This isn’t coming back for a while.”