Bloomberg Businessweek USA 03.16.2020_

(Darren Dugan) #1
◼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

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