Along with 100,000 other techies, entrepreneurs, and gadget fans, David Rubie had planned to come to Barcelona next week for the Mobile World Conference to see the sights, network with potential investors, and generate buzz for his creation, a wearable device.
The Australian was on the short-list for an IOT innovation award at FYFN—short for “Four Years From Now—MWC’s smaller sister show targeting startups. Rubie’s company, SmartShepherd, was a finalist in the agricultural category. Its smart collars enable livestock breeders to collect pedigree data and track which animals produce profitable offspring.
For Rubie, there was more than pride on the line. A win at this prestigious event, he hoped, would open doors to a new market. And so Rubie, the company’s CEO and lone employee, drew about AUS$5,000 ($3,340) from his business development and travel budget and booked a flight and lodging. “This is a really big deal for us,” Rubie told Fortune. “We sell electronic collars for sheep. We are in a town of 20,000 people where there is very little technology development.”
And then, he learned, the show was cancelled.
Last week, the organizers GSMA, called the whole thing off, citing health and safety concerns related to the coronavirus and its possible spread among attendees, as well as to the host city. The event was becoming untenable when big-name participants, including Amazon, Facebook, Nokia, LG and others, pulled out in the days prior.
Since the bombshell announcement, Twitter has become the main virtual gathering place to vent and commiserate. It’s also become a soap box for macabre jokes and a place for would-be badge-holders to declare their emancipation proclamation from the tech tradeshow grind.
In Barcelona and beyond, the economic fallout of the abrupt cancellation of the industry’s largest trade show is beginning to emerge.
Roughly 28,000 rooms had been reserved for the Feb. 24-28 MWC conference, according to Hosteltur, a Spanish trade publication covering the hospitality industry. It estimates that hoteliers too will take a big hit, with lost business totaling approximately 112.4 million euros ($121.5 million).
Hotel prices in and around Barcelona notoriously skyrocket during the week of MWC. In 2019, for instance, the average price for a room in a four- or five-star hotel, the ones preferred by MWC attendees, was 800 euros ($865) per night. The toniest rooms reached upwards of 3,353 euros per night, only to crash to 391 euros the following week.
Now, at the height of the low- winter tourism season, hotels are scrambling to deal with the cancellations and recover at least part of the lost revenue. The newspaper Cinco Dias reported yesterday that the Barcelona Hotels Association and Renfe, the Spanish state-owned train operator, agreed to launch combined train-and-hotel travel packages from Feb. 24 to March 1 in an attempt to make up for the losses.
The promotion is being managed through Renfe’s website and is touting “discounts of more than 30%.
Show must go on…next year
In the wake of the fallout, GSMA and city officials are vowing next year the show will go on. But the anger and confusion around MWC 2020 lingers, particularly since most hotel bookings required substantial advance deposits.
Local lawyers have popped up in recent days, promoting their services to assist out-of-pocket parties reclaim money. That’s despite the fact that the days continue to tick by with little clarity about the possibility of any refunds whatsoever.
The city, for example, was washing its hands of the mess. Last Friday, Barcelona mayor Ada Colau told the local Catalan radio station that the city is not liable to pay any of the costs associated with MWC’s cancellation.
As one headline in Spanish summed up: “500 million [euros] leaving Barcelona. Who pays for the MWC?”
Getting an answer to that question has been a challenge. Fortune sought comment from the biggest hotel chains in the city, and Barcelona’s hotel organization, Gremi d’Hotels Bcn, but got no response. Meanwhile, MWC’s official accommodation partner, Barcelona-based bnetwork, referred Fortune to GSMA.
In an email sent to attendees who had booked through the company, bnetwork said it had asked the city’s hotel association for guidance. The association urged member hotels to stick by the original terms of bookings and not give extraordinary refunds, bnetwork wrote. “However we have well registered your request of cancelation of the booked room(s) and will send you a receipt soon,” the email noted.
GSMA’s chief marketing officer, Stephanie Lynch-Habib, in an interview with Fortune, offered little further detail on the refund controversy beyond extending “thoughts and sympathies” to those “affected in China and around the world.” She then added: “We’re committed as an industry association to carry on. It’s a sad day but we’re working hard to to work on next steps and get ready for next year.”
Force majeure
Attendees hoping to recoup some of the expenses shouldn’t expect much solace in the fine-print of their hotel and travel insurance policies. Phrases like “non-refundable,” “cancellation policies offered when booking was made,” and “force majeure”—those unplanned circumstances such as war, terrorist attacks and acts of nature that allow airlines, hotels and even the GSMA to cancel events and contracts—make clear there’s little room for negotiating.
Bnetwork’s own policy states that as of Friday, Feb. 14—two days after the cancellation was announced—all bookings are final.
The trade show has become so big in recent years that hotel cancellations impact business owners well outside the city. Ignasi Ares, who manages Hotels Còsmic’s group of four hotels in Vilafranca del Penedés, a town 50-odd kilometers away from the conference site, said during the week of the conference the group’s 120 rooms are usually at 100 percent capacity, filled with last-minute conference attendees or tourists who cannot find any availability in Barcelona. He said that if he can get 50-60 percent room occupancy next week—at significantly lower rates—he’d be happy.
He added that he is deciding on a case-by-case basis if booking deposits will be refunded to individual guests.
Meanwhile, SmartShepherd’s Rubie says he’s out about AUD$2,000 ($1,340) for the three-night hotel stay he no longer needs.
“The hotel won’t even budge on this. I knew when I booked this through a travel agency in Australia that the hotel had a no-refund policy,” he acknowledged. “Normally, I would be okay with that if I was the one cancelling. However, this is a completely different set of circumstances.”
“I certainly don’t expect to get all of the money back. But, I would like to see if there is some way we can all share the pain.”
Correction: Due to an editing error, a previous version of this story incorrectly stated that Mobile World Congress was canceled two days after the Bnetwork cancelation policy deadline. MWC, in fact, was canceled on Feb. 12, two days prior to Bnetwork’s Feb. 14 deadline.
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