Bloomberg Businessweek - USA (2020-03-16)

◼COVID-19/ BUSINESS BloombergBusinessweek March 16, 2020

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typically seeatleast

doublethetipsthey’d

makeona normalnight.“Idefinitelywon’tbeable

togoonvacationanytimesoon,andI waskindof

hopingforthat,”Welchsays.

FernandoMarri,owneroftheBotecofood

truckinEastAustin,saidthecancellationwill

costhim$45,000ofcateringbusiness,sohewon’t

behiringthe 10 workershe’dplannedtotakeon

duringSXSW.Thetimingisparticularlybad—

hewasexpectinga jumpincustomersafterhis

business,whichsellscoxinhas,brigadeiros, and

otherfoodsfromhisnativeBrazil,waslaudedby

FoodNetworkhostGuyFieritwomonthsago.In

thevideo,Fierisaidhe’dbeenturnedontothe

truckbytheactorandbelovedAustiniteMatthew

McConaughey.

“ForeverybodythatlivesinAustin,gooutand

supportsmallbusinesses,”Marrisays.“Think

aboutthata littleextrathismonth.”

Austinhaslongconsidereditselfa citythat’s

friendlytothecreativeclass,wheremusicians

canfinda steadystreamofgigsandplentyof

service-industryworktopaythebillsbeforethey

makeit big.Butthatreputationhaschangedin

recentyears;housingcostshaveshotupamida

technologyboomthat’sseenthousandsofjobs

createdbyApple,IBM,Oracle,andothercompa-

nies.Whilethatinfluxoftechemployershelped

givetheregionthefastest-growingeconomy

○AsifKhanhasa newroutineeverytimeoneof

hisride-sharepassengersstepsoutoftheToyota

minivanhedrivesinAustin:Hegrabsa canof

Lysolandsprayseverythingdown.“Itsaysit kills

allthegerms,”heexplains.

Withdiligenceandluck,Khanmightbeableto

avoidgettingsick.Butthereisn’tmuchhecando

aboutthefinancialhitcominghiswaynowthat

thecityhascanceledthe 2020 SouthbySouthwest

musicandtechnologyfestivaloverconcernsabout

thecoronaviruspandemic.Insteadoftheextra

$2,000heexpectedtorakeinduringthetwo-week

event,he’lllikelymakelessthanhedoesduring

normaltimes,driving 10 to 12 hourssevendays

a week.That’llmeanforgoingplanstopaydown

debt,hesays.“Nowit’sgoingtotakealittle longer.”

Organizers said SXSW, which draws hundreds

of thousands of attendees from more than 100

countries every March, had a total economic

impact  on Austin of almost $356 million last

year. That includes hotel and Airbnb rooms, the

money big corporations spend renting venues for

dinners, the bar tabs for the revelers that flood

downtown, and the surge in shopping at hipster

boutiques as foot traffic picks up.

“It’s like a hurricane of people, of humanity,

that leaves behind money instead of wreckage,”

says Brian Rush, who owns the Tears of Joy hot-

sauce shop in the downtown entertainment dis-

trict. March typically brings in two to three times

the revenue he makes in an average month as he

guides walk-ins to house-made concoctions with

names like Dragon’s Breath and Night Destroyer.

Rush expects business will be lower than

in previous years, but isn’t sure how bad it will

be. That’s because he figures many people who

already bought tickets to Austin will still make the

trip, especially those coming for the smaller, unof-

ficial music shows that pop up during the festival.

That’s also the hope of Miranda Welch, the lead

barista at Gelateria Gemelli, which sells sweets,

coffee, and cocktails just outside downtown.

Welch also works as a doorperson and bartender

at the music venue Cheer Up Charlies and counts

on a windfall from SXSW, during which they

▲ Businesses across

Austin are in mourning

But what if it

doesn’t?

What is South by Southwest worth?

Peopleregistered

forSXSWin 2019

A breakdownofits$356millioneconomicimpactonAustinin 2019

Attendeespending Other impact

Transport

Hotels

$110m

Exhibitor

and sponsor

parties and

events

$100m

Year-round

operations

$74m

Food, drinks

$45m

Other

$19m

Attendees

86.6k

Speakers

4.8k

Members of the media

4.3k