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Hospitality Workers Pay The Price As Coronavirus Disrupts SXSW, Coachella

Major events are being canceled or postponed due to COVID-19 concerns. The financial repercussions for some workers are life-changing.

As the coronavirus continues to spread across the U.S., organizations are taking the extraordinary step of canceling major events to mitigate contagion. The disruptions, though necessary from a public health perspective, are having life-changing consequences on workers who depend on the influx of cash to pay the bills.

SXSW, an annual series of conferences and festivals focused on art, music and film, drew more than 250,000 people to Austin, Texas, last year and injected about $355 million into the local economy.

Heeding recommendations from the U.S. Centers for Disease Control and Prevention, the city of Austin announced last week that it was pulling the plug on SXSW, which was scheduled for March 13 to 22. 

The cancellation doesn’t just mean the event won’t go on. It means thousands of workers and business owners will see a sudden and unexpected drop in revenue ― fewer restaurant patrons, hotel guests, cab riders. Canceling large events and self-quarantining are important to stem the spread of COVID-19, the disease caused by this coronavirus, but they also mean workers will take a huge financial hit.

Nathan Lipson, who owns a pedicab business in Austin, said he makes about 70% of his annual income during SXSW. He was relying on a big financial boost from this year’s festival after his shop suffered a costly electrical fire a year ago. He lost 80 pedicabs in the blaze, he said.

Lipson also rents out his house on Airbnb during SXSW. But this year’s renters, who were going to pay $9,000 for the place, have pulled out.

“I’m concerned and stressed out,” said Lipson, 43. “But also, I just can’t help but wonder whether [canceling SXSW] was an extreme.”

“It has repercussions that continue for the year ― not just two weeks,” he added. “We will all feel this for months to come.”

A general view of the atmosphere in the entertainment district of downtown Austin, Texas, this week. 
A general view of the atmosphere in the entertainment district of downtown Austin, Texas, this week. 

Fewer visitors and less business means that those impacted will in turn spend less, further propelling the economic downturn caused by the cancellation of massive events like SXSW, said Dean Baker, an economist with the progressive Center for Economic and Policy Research.

“There’s no easy way to recover from that,” Baker said.

SXSW employees also lost their jobs. Three days after canceling the conferences, SXSW laid off about 50 people, or one-third of its staff.

Tara, who is being identified with a pseudonym to avoid possible retribution, was one of the employees cut loose on Monday. She had worked full-time for SXSW since 2013 in various capacities. Most recently, she managed programming for the conference. 

“It was completely stunning,” she told HuffPost on Wednesday. “The only other time I know of a mass layoff like this was after 9/11.”

Tara said employees laid off by SXSW previously received severance pay equivalent to a full annual salary. This time around, she said, those terminated were offered pay for only two weeks.

SXSW did not immediately respond to HuffPost’s request for comment.

As Tara prepares to file for unemployment and begin the search for a new job, she and her husband worry about losing health insurance for their household.

Tara said she agrees with the city’s decision to cancel SXSW, but that she wishes the event’s management team had prepared ahead of time after seeing coronavirus outbreaks pop up in other parts of the world.

“It’s all very fucked up,” she said. “The city is getting hit really hard.”

The second weekend of the 2019 Coachella Valley Music And Arts Festival in Indio, California.
The second weekend of the 2019 Coachella Valley Music And Arts Festival in Indio, California.

In southern California’s Coachella Valley, workers are feeling a similar collective gut-punch. The BNP Paribas Open, a two-week tennis tournament known as “Indian Wells,” has been canceled, and two major festivals have been postponed.

Indian Wells, which was to be held March 9 to 22, attracts roughly 500,000 spectators each year. The Coachella Valley Music and Arts Festival was slated for two consecutive weekends in April, and the Stagecoach country music festival was set for the last weekend of the month.

Coachella alone draws nearly 100,000 people each day of the festival and brings in over $105 million for Indio, the city where it’s held. Both festivals were postponed until October, but workers are struggling to make ends meet in the interim. 

Kellie Nicole, 29, grew up in Coachella Valley and has been working off-and-on in the hospitality industry there since she was 16. She’s a full-time server at Cork & Fork, a stylish wine bar in La Quinta, and feels as though the rug has been ripped out from under her during this year’s festival season. 

“I make probably three times as much money in the span of that time than the rest of the year,” Nicole said. “Even though we potentially could make more money in the fall, that’s not going to help us survive throughout the summer, pay the rent and day-to-day expenses now.”

She knows a lot of other servers who earn most of their money through tips like she does, as well as small business owners in the area, who are very concerned about making ends meet.

“It’s going to have a pretty dramatic effect on our little city in the desert,” Nicole said. “It’s a problem that doesn’t really have an answer.”

INDIAN WELLS, CALIFORNIA - MARCH 09: A "Tennis Is Cancelled" sign flashes outside the Indian Wells Tennis Garden on March 09,
INDIAN WELLS, CALIFORNIA - MARCH 09: A "Tennis Is Cancelled" sign flashes outside the Indian Wells Tennis Garden on March 09, 2020 in Indian Wells, California. 

Despite the major financial losses they’ve suffered, some workers are hopeful that their local communities will have their back. 

Informal events are being organized in Austin to attract locals to spend money at bars and restaurants in the area, though these activities could also be postponed pending the CDC guidance as the virus continues to spread. Vendors are creating pop-up shops to sell the products they created for SXSW.

“There’s a big move in the service industry to help each other out,” Lipson said. “There’s always unofficial South By shows and those are probably still going to continue. A lot of the music shows will still continue.”

GoFundMe page for service workers impacted by SXSW’s cancellation had raised over $7,000 as of Thursday.

“There’s no person to be blamed for what’s happening so it’s not like someone that we can all be angry at for this loss of income,” Nicole said. “But it’s going to be extremely difficult on local businesses.”

“If you live in the Coachella Valley and you’re still going out, eat at local restaurants,” she added. “Support local business, because those are going to be the people who are struggling the most.”