For the second year in a row and for the second time in its 35-year history, South by Southwest, the media, music and technology event, is absent from its hometown, Austin, Texas.
This year, it has become virtual and will only run for five days until the end of the week, instead of the normal two weeks. Last year, SXSW was one of the first major live events to halt the start of the pandemic, setting off alarms for the future of an industry that has not yet recovered.
“South by”, as locals call it, is usually the most profitable event for Austin’s hospitality industry. Hundreds of thousands of people around the world come together to attend exhibitions of films, concerts and panels with the participation of great business leaders, innovators and top celebrities. In 2019 alone, the event attracted more than 417,000 visitors from 106 countries and raised a record $ 355.9 million for the city’s economy, according to reports released by SXSW.
“So many companies and workers in these spaces deposit virtually all the money that year,” said Cody Cowan, executive director of the Red River Cultural District, a nonprofit organization that represents an important cultural neighborhood in the heart of the city. “The locations and many other adjacent cultural tourism businesses hold about 50% of South by Southwest’s annual revenue.”
Without this economic engine, local companies are experiencing difficulties for the second time in two years.
“Everything is very quiet, you know, it’s really very strange,” said Stephen Sternschein, managing partner at the Austin-based event promotion and marketing firm Heard Presents. “The scariest thing is whether it will ever come back for real, you know, as it will be like before.”
The three music venues that your company operates – Empire Control Room, Empire Garage and The Parish – typically generate 30% of their annual revenue during SXSW alone. 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 payroll and customer base fell more than 80 percent amid the pandemic and said he – and the live entertainment industry as a whole – are eagerly awaiting more government help and more doses of Covid- 19 in American weapons. The American Rescue Plan, endorsed by President Joe Biden last week, set aside $ 1.25 billion for the Shuttered Venue Operators Grant program.
“There is no way to take a business and cut 90% of revenue, and none of expenses, and make sense of it.”
“I’m really sitting here biting my nails,” said Sternschein. “There is no way to take a business and cut 90% of the revenue, and none of the expenses, and make sense of it.”
Samantha Staples, president of Austin-based High Beam Events, said her company typically earns 80% of its annual revenue from SXSW, providing and producing spaces for big names like Google, Subway and McDonald’s since 2005.
“‘South by’ is essential to our business, as it is essential to many other business related events in Austin,” she told NBC News. “It has the unique ability to allow certain suppliers to earn enough money for the entire year.”
Although Staples said her company is “in great shape” thanks to federal financial support and a frugal budget since the start of the pandemic, she acknowledges the future difficulties that this poses for High Beam in the future.
“What was so sad and our biggest challenge for 2022 is which suppliers will survive, which locations will survive. We have a plan in June to start looking for places trying to find vacancies for our customers, because many places have closed, ”she said.
It’s not just Austin’s live events industry that has been hit by the absence of SXSW and the movement of tourists in the past 12 months.
Paul Henry, co-owner of Houndstooth Coffee, said the festival accounted for 20% of his branch’s downtown revenue in 2019, as festival participants came for coffee before a long day or to sit and wait for check-in in at the hotel. . The pandemic meant a 65% drop in all seven of its coffee shops last year.
“South by Southwest was great. Covid was incredible to us, ”he said. “Downtown Austin is still a ghost town a year later. It’s a little busier than last April and May, but not really. Nobody returned to work in the buildings in the center and the hotels are still almost all empty ”.
“South by Southwest was great. Covid was incredible to us. Downtown Austin is still a ghost town a year later. “
The Austin-Round Rock area has lost nearly 30,000 leisure and hospitality jobs since the initial Covid-19 outbreak, according to data from the US Bureau of Labor Statistics.
Shelbi Mitchell is the director of experiences and cultural expression at Six Square, an organization dedicated to preserving the cultural legacy of the African American community in mid-east Austin. His organization joined the Austin Community Foundation’s “Stand with Austin” initiative last year to provide $ 50,000 in grant funds to community members affected by the cancellation of SXSW.
Since then, Six Square has created its own Covid aid program, working to distribute $ 55,000 in emergency funds to help black artists, entrepreneurs and creatives in the area.
One candidate, who curates and produces events, said he has lost $ 15,000 since March due to events being “canceled due to Covid-19”. Another, who said he had an official partnership with SXSW in 2020, was supposed to bring 60 professionals, entrepreneurs and speakers to Austin, but ended up losing money planning an event that never happened. An artist who applied for funding said that all of his local tours and performances were canceled “indefinitely”.
In March last year, the Red River Cultural District launched Banding Together ATX, a relief program for music and hospitality workers in the Austin metropolitan area. Since then, she has awarded $ 225,000 in HEB supermarket gift cards to more than 3,000 residents.
Austin’s institutions were also affected by the pandemic and the city’s inability to host SXSW.
Sylvia Orozco, executive director of the Mexic-Arte Museum, said the festival usually raises about $ 150,000 from increased tickets, store sales, showcases and space rental for events.
“We are in the middle of the city center, we are in the center of it during ‘South by’ and we get important rentals,” she said. “We felt more last year because it was a shock that we didn’t expect. Fortunately, we had an important lease and, because of our contract, we did not have to return the money. But this year, no one held out their hand. “
Orozco and his team struggled to apply for various arts-related grants, which helped them survive the worst of the pandemic. But she is concerned that the lack of tourism will have lasting effects on the local economy and the museum, which she co-founded in 1984.
“There are no tourists, so there is no money,” she said. “It is the most horrible experience I have ever had.”
While the past year has been difficult for Austin’s artistic and business community, the future looks brighter.
“While we are exploring a hybrid model for next year, Dr. Mark Escott (Austin Provisional Public Health Authority) recently said: ‘I am very confident that SXSW will look normal or almost normal next year’, and so do we , share your optimism that we will be able to host a face-to-face event in 2022, ”said Roland Swenson, co-founder and CEO of SXSW.