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For the second year in a row and for the second time in its 35-year history, South by Southwest, the media, music and tech event, is absent from his hometown of Austin, Texas.
This year it has gone virtual and only runs five days for the rest of this week instead of 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 and set off alarms for the future of an industry that was still recovering.
“South by,” as the locals call it, is typically the single most profitable single event for the Austin’s hospitality industry. Hundreds of thousands of people around the world come together to attend film screenings, concerts, and panels with performances by renowned business leaders, innovators, and A-list celebrities. In 2019 alone, the event drew more than 417,000 visitors from 106 countries and grossed a record-breaking $ 355.9 million for the city’s economy, according to SXSW reports.
“So many businesses and workers in these areas are betting on this money almost year round,” said Cody Cowan, executive director of the Red River Cultural District, a nonprofit that is a cultural hotspot in the heart of the city. “Venues and many other adjoining cultural tourism companies hold about 50 percent of South by Southwest’s annual income.”
Without this economic engine, local businesses will be in pain for the second time in two years.
“Everything’s just silent, you know, it’s just really weird,” said Stephen Sternschein, managing partner at Austin-based event promotion and marketing firm Heard Presents. “The scary thing is, if it will ever really come back, you know, if it will be the way it was.”
The three music venues his company operates – Empire Control Room, Empire Garage, and The Parish – typically bring in 30 percent of their annual income during SXSW alone. The venues would typically be filled 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 at large – is eagerly awaiting further government aid and more Covid-19 shots in American guns. The American rescue plan, signed by President Joe Biden last week, reserved $ 1.25 billion for the Shuttered Venue Operators Grant program.
“There’s no way you can take a business and cut 90 percent of its income and none of its expenses and make it make sense.”
“I’m really sitting here biting my nails,” said Sternschein. “There’s no way you can take a business and cut 90 percent of its income and none of its expenses and make it useful.”
Samantha Staples, president of Austin-based High Beam Events, said her company typically generates 80 percent of its annual revenue with SXSW, which has been providing and manufacturing space for big names like Google, Subway, and McDonald’s since 2005.
“South by is just as important to our business as it is to many other Austin event companies,” she told NBC News. “It has the unique opportunity that certain providers make enough money all year round.”
Although Staples said her company has been “in great shape” thanks to federal financial support and a thrifty budget since the pandemic began, she recognizes the future difficulties it will pose for High Beam in the future.
“What was so sad, and will be our biggest challenge for 2022, is which vendors survive, which venues survive. We have a plan to start searching for venues in June to find spaces for our clients as so 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 busy tourist crowds for the past 12 months.
Paul Henry, co-owner of Houndstooth Coffee, said the festival accounted for 20 percent of its downtown branch’s revenue in 2019 as festival goers grabbed coffee before a long day or waited for hotel check-in time. The pandemic resulted in a 65 percent decline in all seven of its cafe locations over the past year.
“South by Southwest was great. Covid was earth-shattering for us, “he said. “Downtown Austin is still a ghost town after a year. It’s a bit busier than last April and May, but not really. Nobody has returned to work in the buildings in the city center and the hotels are still mostly empty. “
“South by Southwest was great. Covid was earth-shattering for us. Downtown Austin is still a ghost town after a year. “
The Austin-Round Rock area has lost nearly 30,000 recreational and hospitality jobs since the first Covid-19 outbreak, according to the US Bureau of Labor Statistics.
Shelbi Mitchell is director of cultural experiences and expression for Six Square, an organization dedicated to preserving the cultural heritage of the African American community in central east Austin. Your organization joined the Austin Community Foundation’s Stand with Austin initiative last year to provide $ 50,000 in grants to community members affected by the SXSW cancellation.
Six Square has since launched its own Covid relief program, working to distribute $ 55,000 in emergency aid to help black artists, entrepreneurs and creatives in the area.
One applicant who curates and produces events said he has lost $ 15,000 since March because events were “canceled due to Covid-19”. Another, who said he officially partnered 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. One artist who applied for funding said all of his tours and local performances have been canceled “indefinitely”.
Last March, the Red River Cultural District started Banding Together ATX, a service program for music and hotel staff in the greater Austin area. Since then, it has issued HEB grocery store gift cards valued at $ 225,000 to over 3,000 residents.
Austin institutions have also been hit by the pandemic and the city’s inability to host SXSW.
Sylvia Orozco, executive director of the Mexic-Arte Museum, said the festival typically raises around $ 150,000 from increased admission prices, store sales, and window and event space rentals.
“We’re in the middle of downtown, we’re in view during ‘South by’ and get big rents,” she said. “We felt it more last year because it was a shock we didn’t expect. Fortunately, we had a larger rent and, due to our contract, didn’t have to return the money. But nobody has contacted us this year. “
Orozco and her team rushed to apply for numerous art-related scholarships that helped them make ends meet during the worst of the pandemic. However, she fears that the lack of tourism will have a lasting impact on the local economy and the museum she co-founded in 1984.
“There are no tourists, so no money,” she said. “It’s the most terrible experience I’ve ever had.”
While last year has been a difficult year for Austin’s business and arts scene, the future looks brighter.
“While we are studying a hybrid model for next year, Dr. Mark Escott (Austin Public Health Interim Agency) recently: ‘I am very confident that SXSW will look normal or almost normal next year’ and we also share his optimism that we can hold a face-to-face event in 2022, “said Roland Swenson , Co-Founder and CEO of SXSW.
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