#SXSW2020: Welcome to Hotel California

On a dark desert highway, cool wind in my hair
Warm smell of colitas, rising up through the air
Up ahead in the distance, I saw a shimmering light
My head grew heavy and my sight grew dim
I had to stop for the night.
(The Eagles)

Austin 2020. The cancellation of SXSW2020 hit the town midships, and under the waterline. Tumbleweeds are rolling silently through the almost empty city streets.  Normally, this time of year Austin is full of street artists, musicians, rock stars, filmmakers, tech gurus, developers, thinkers, dreamers, inventors, writers and visitors. Over 350 million dollar in direct revenue to the city. The bread and butter of countless small entrepreneurs and hospitality workers, mostly directly depending on this event. The event, cancelled by Corona, Covid19. Ironically, the thousands of workers that now see close to half of their yearly paycheck go up in smoke, have no health insurance…

Convention Center, Hilton Hotel… dead. Walking through this part of the city feels creepy. Like those influencer videos of Chernobyl. No death rays that will glow you in the dark, but the creepy little virus can be heard giggling behind every empty street corner.

O yeah, people did show up. We’re  meeting them. On terraces, in lobbies. maintaining social distances. A bit hesitant. A bit awkward. But quickly back into what matters. The future. Of tech. Of society. Of humanity. The future of SXSW even, if there is one.

RIP SXSW?

Because, make no mistake: Austin takes a hit. But the financial and trust blow to SXSW LLC, the company that organizes SXSW since 1987 is a hefty one. The corporation saw mayor Steve Adler cancelling SXSW mere days before the festival was about to start, and with the first delegates and visitors already arriving or on their way to Austin.

SXSW LLC cannot count on insurance – while it’s covered from all possible angles, pandemic viruses are considered an act of God. Insurance companies nor God seem very keen in stepping in to repay for the damages. A lot of the investments for this year’s festival vaporized overnight.  For SXSW LL, the city’s decision is putting its future in jeopardy. It scrambles to pick up the pieces, make decisions, and stay afloat.  

SXSW laid off 60 employees on Monday, a third of its 180 full time staff.  Most of the temporary staff was let go as well. SXSW communicated that “We are rigorously reviewing all options and operations, and are in the unimaginable position of reducing our workforce. We are planning for the future and this was a necessary, but heartbreaking, step.”

Roland Swenson

Roland Swenson, SXSW co-founder and CEO stated that:  “SXSW is planning to carry on and do another event in 2021. How we’re going to do that I’m not entirely sureOur losses could run into the tens of millions of dollars. Without measures, we could be out of money by this summer if we don’t find additional sources of income. As we do not have insurance coverage for cancellations triggered by bacterial infections, communicable diseases, viruses and pandemics, insurance will likely not cover the cancellation.

Too big to fail

Austin Mayor Steve Adler is confident that SXSW LLC will be able to hold the event again.

They told me they fully intend to come back next year,” Adler said in an interview with The Statesman “They haven’t quite figured out the path yet. But they fully intend to come back. It is part of who we are — it’s part of our brand — and I think this city wants to help them and the (hospitality) industry overall.

It looks like city, local tycoons and state are going to step in to make sure the illustrious festival will be held next year.  If not, the impact on Austin’s international profile and tourism industry will be devastating.  Many of the  food trucks, restaurants, bars, hotels and other businesses in downtown Austin took a severe blow, and are scrambling to survive until the next edition. No new edition would mean certain death for many of them. The economic and reputational hit of the total death of the festival in the context of Austin’s annual economy would be downright catastrophic. SXSW is the flagship event for Austin on as well the touristic as the economic sectors.

Austin, symbol of innovation, freethinking, and home of thousands of start-ups cannot really permit to lose the shiny Lone Star of its famous festival, that attracts over 200.000 music fans, technology geeks and innovative culture enthusiasts to the city’s downtown each March, and many businesses in the area have come to count on the free-spending attendees.

Peter Rodriguez, dean of Rice University’s Jones Graduate School of Business, told a local newspaper that “SXSW has a significant impact on the standing of the city and on the perception of Austin as a regional hub of technology and creativity, benefits that will be difficult to reproduce if the event can’t continue. That would be a big and costly loss for Austin and for Texas and would impact a significant  part of downtown Austin businesses. The hospitality sector in the area probably has too much capacity without the annual tide of SXSW visitors.”

Lock down

You might think it unwise that one festival has such a dramatic power grip on a local economy, that failing might mean wrecking the local economy. Austin will save SXSW. We saved our banks. Detroit’s car manufacturers were saved.

Our economy resists terrorism, but folds like a card house by a tiny moisture spread virus. Civilization as we know it reinvents itself over night in a stressed-out all-in attempt to outsmart a brainless micro-organism.

State of emergency, lock-down…  Driving my truck through the desert roads of Texas, I listen to Sirius Radio. the Eagles knew it all along:

 Last thing I remember, I was
Running for the door
I had to find the passage back to the place I was before
‘Relax’ said the night man,
‘We are programmed to receive.
You can check out any time you like,
But you can never leave!’
” (The Eagles
)

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