For the second consecutive year and for the second time in its 35-year history, South by Southwest, the media, music and technology event in his hometown of Austin, Texas, is missing.
This year it is virtual and runs only five days through the rest of this week rather than the usual two weeks. Last year, SXSW was one of the first major live events to pull the plug at the start of the pandemic, setting alarms for the future of an industry that has yet to strike back.
‘South by’, as the locals call it, is usually the most lucrative opportunity for Austin’s hospitality industry. Hundreds of thousands of people around the world gather to attend film screenings, concerts and panels with performances by great A-list leaders, innovators and celebrities. In 2019 alone, the event attracted more than 417,000 visitors from 106 countries and caught up with a record $ 355.9 million for the city’s economy, according to reports released by SXSW.
“So many businesses and workers in these spaces save their entire year on that money,” said Cody Cowan, executive director of Red River Cultural District, a nonprofit that represents a cultural hotspot in the heart of the city. “Local and many other adjacent cultural tourism businesses own about 50 percent of the annual revenue from South-Southwest.”
Without this economic engine, local businesses are experiencing pain for the second time in two years.
“Everything’s just quiet, you know, it’s just really weird,” said Stephen Sternschein, managing partner of Heard Presents, a promotional and marketing firm in Austin. “The scary thing is whether it will ever really come back, you know, or it will be as it was.”
The three music venues that run his business – Empire Control Room, Empire Garage and The Parish – typically generate only SXSW 30 percent of their annual revenue. The venues would normally be packed with thousands of people and 400 SXSW artists during the event, he said. But not this year.
Sternschein said his salary and customer base was more than 80 percent lower amid the pandemic and said he – and the live entertainment industry as a whole – was anxiously awaiting more government relief and more Covid-19 shots in US arms . The U.S. rescue plan, signed last week by President Joe Biden, set aside $ 1.25 billion for the Shuttered Venue Operators Grant program.
“There’s no way you can take a business and cut 90 percent of the revenue, and none of the expenses, and that makes sense.”
“I’m really sitting here biting my nails,” Sternschein said. “There’s no way you can take a business and cut 90 percent of the revenue, and none of the expenses, and that makes sense.”
Samantha Staples, president of the High-Beam Events in Austin, said her company typically derives 80 percent of its annual revenue from SXSW and has been providing and manufacturing spaces for big names like Google, Subway and McDonalds since 2005.
“‘South by’ is essential to our business, just as it is essential to many other opportunities in Austin,” she told NBC News. “It has the unique ability to make certain traders earn enough money for the entire year.”
Although Staples said her company was “in good shape” thanks to federal financial support and a frugal budget since the pandemic began, she acknowledges the future hardships it will pose to High Beam in the future.
“What was so sad and what will be our biggest challenge for 2022 is which merchants survive, which places survive. “We launched a plan in June to start looking at venues that are trying to find spaces for our customers because so many places have closed,” she said.
It’s not just Austin’s lively event industry that has been hit by the absence of SXSW and busy tourist crowds over the past twelve months.
Paul Henry, co-owner of Houndstooth Coffee, said that in 2019 the festival accounts for 20 percent of the revenue at its downtown branch, as the festival participants go to fetch coffee or sit and wait for theirs before a long day hotel check-in time. . The pandemic has seen a 65 percent drop in all seven of its cafe locations over the past year.
‘South by Southwest was great. “Covid was groundbreaking for us,” he said. ‘Downtown Austin is a ghost town a year later. It’s a little busier than in April and May, but not really. No one has returned to work in the buildings downtown, and the hotels are still empty. ”
‘South by Southwest was great. Covid was groundbreaking to us. Downtown Austin is a ghost town, another year later. ‘
According to data from the U.S. Bureau of Labor Statistics, the Austin-Round Rock area has lost nearly 30,000 recreation and hospitality jobs since the initial outbreak of Covid-19.
Shelbi Mitchell is the director of cultural experiences and expression at Six Square, an organization that preserves the cultural legacy of the African-American community in Central East Austin. Her organization joined the Austin Standing initiative’s Stand with Austin ‘initiative last year to give $ 50,000 in grants to community members affected by the cancellation of SXSW.
Six Square has since launched its own Covid emergency relief program, which has worked to distribute $ 55,000 in emergency funding to help black artists, entrepreneurs and creative people in the area.
One applicant, who compiles and produces events, said they have lost $ 15,000 since March due to events “canceled due to Covid-19.” Another, who said they had an official partnership with SXSW in 2020, was supposed to bring 60 professionals, entrepreneurs and speakers to Austin, but in the end they planned money for an event that never happened . An artist who applied for the funding said all their tour and local performances had been canceled ‘indefinitely’.
In March last year, Red River Cultural District Banding Together launched ATX, a utility for music and hospitality workers in the greater Austin area. It has since donated $ 225,000 gift cards from the HEB grocery store to more than 3,000 residents.
Austin institutions were also affected by the pandemic and the inability of the city to host SXSW.
Sylvia Orozco, executive director of the Mexic-Arte Museum, said the festival typically generates about $ 150,000 from increased admissions, store sales, window rentals and event rentals.
“We’re in the middle of downtown, we’re in the eye of this during ‘South by’ and we’re getting big rents, ” she said. “We felt it more last year because it was a shock we did not expect. Luckily we had a great rent and due to our contract we did not have to return the money. But this year, no one even issued. ”
Orozco and her team tried to apply for numerous arts grants, which helped them get over it during the worst pandemic. But she is worried that the lack of tourism will have long-term consequences for the local economy and the museum, which she co-founded in 1984.
“There are no tourists, so there is no money,” she said. “It’s the most horrible experience I’ve ever had.”
Although the past year has been difficult for the business community in Austin, the future looks brighter.
‘While we are researching a hybrid model for next year, dr. Mark Escott (Interim Authority of Austin Public Health) recently said: ‘I am very confident that SXSW will look normal or almost normal next year’, and we too, share his optimism that we will be able to hold a personal meeting in 2022 , ‘said Roland Swenson, co-founder and CEO of SXSW.