Barcelona tries to recover from cancellation of MWC 2020

Autocars Esteve S.L. is a family-owned company on the outskirts of Barcelona in Sant Boi de Llobregat. For one week each February, business booms as techies converge on the nearby Catalan capital for Mobile World Congress, the world’s biggest trade show of its kind.

At the height of the MWC hysteria, rented Mercedes-Benz E-Class sedans, vans and luxury “coach” buses pull in and out of the lot morning, noon and night to ferry telecoms executives, tech entrepreneurs, the occasional government minister and their handlers around town. The rentals can bring in thousands per customer for Autocars Esteve.

The company nets about 30% of annual sales that week, says Josep Esteve, director of the luxury car service company. Headcount climbs ten-fold to about 100 staffers just to keep up.

Virtually none of that though will play out this year after MWC organizers pulled the plug on the event, the latest casualty to the business world as the fallout of the coronavirus outbreak spreads thousands of miles beyond the epicenter in central China.

A half-billion hole

“For many weeks, we have been [managing] logistics and coordinating and training of drivers in the hope that the congress would not be canceled definitively because our main clients have confirmed their attendance,” Esteve said. “News of the cancellation was a very strong blow for us, but we have confidence in the next editions.”

Esteve’s disappointment for this year’s MWC cancellation and his hope for MWC’s 2021 return are echoed by many local business owners. The no-show could leave a 500-million-euro ($540 million) hole in the local economy.

Coronavirus is dragging down the global events business so far in 2020. From Tokyo job fairs to poker tournaments to Facebook’s annual marketing confab in San Francisco, gatherings of all sizes are being called off as big-name sponsors and ticketholders pull out last-minute.

Few cancelations have been as disruptive as the closing of MWC 2020.

What’s all very puzzling to most Barcelonans is that there isn’t a single known case of the virus anywhere within the region, health officials say.

A workforce of 14,000

Since 2006, when Barcelona became the host city, MWC has put money in the pockets of thousands, from the workers who build and take down stands to the students who work the booths or check badges. Outside the Fira expo grounds, there are hotel and restaurant staff, taxi drivers and caterers reliant on the event, an army of about 14,000 workers with various backgrounds and skill sets. Barcelona is contracted to host the event through 2023.

Inside the eerily quiet Mobile World Congress pavilion as workers made plans to dismantle of the stands for the canceled event, the world’s biggest telecoms trade show. Wire photography: David Zorrakino—Europa Press via Getty Images.

“We live off the offices around here, but the trade shows that come to the Fira are very important for us,” said Marc Carulla, the owner of Glub, a restaurant and bar nestled between high-rise office buildings. It’s a 300-meter walk from the MWC exhibition site and so a popular first stop for attendees to catch a breath or unwind.

“The trade shows give us a 30-40 percent peak in turnover,” Carulla said. Business picks up about 12 days before MWC begins as workers arrive to set up the halls, he notes, before petering out in the week after the event.

During MWC, Carulla also provides corporate catering, and rents out restaurant space for private parties. Those reservations start trickling in the year prior, as far back as April or May. To reserve, corporate customers leave a 20% deposit.

Many of his clients started to express reservations about attending MWC 2020 in mid-January just as a second payment was due, Carulla said. That was also around the time the COVID-19 coronavirus became front-page news around the world.

“Without the Congress,” Carulla said, “we stand to have about 40 percent less sales than what we expected for this February. We see this as the cost of a lost opportunity, instead of as a direct loss.”

Carulla said he has talked to customers about holding onto deposits for MWC 2021.

“Everyone is saying we have to think about and plan for next year, so that’s what I’m doing, too,” he said. “I’m telling customers I will hold their money for 2021. Most of my customers understand.”

These kinds of stories made John Hoffman, CEO of the GSMA, MWC’s organizer, emotional in a recent one-on-one interview with TVE Catalunya as he reflected on the decision to pull the plug on this year’s event.

Last week, in the aftermath of the cancellation, local and national health officials scrambled to assure the public there were no health risks in Barcelona or the Catalan province. This week, attention turned their attention to recouping losses, creating ways of attracting tourists to fill empty hotel rooms, and connecting people who still may be coming to the city next week.

For some, the show must go on

The city announced its support of what’s being called Barcelona Opportunity Week, a hotel-gastronomy-cultural initiative “being promoted jointly with the city’s main economic stakeholders to attract new visitors and maintain those who already had travel arrangements booked.” Similarly, 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 touting discounts of more than 30 percent.

Then, there’s Tech Spirit Barcelona, an alternative event that aims to bring together entrepreneurs, tech companies and investors who would have attended the cancelled MWC sister conference, 4YFN. Mobile Week 2020, Catalunya’s parallel show to promote increased digital and technology usage among citizens, continues as scheduled.

And, a number of companies announced they would host online webinars or pop-up events in Barcelona, like the Phoenix Event, assuming some MWC attendees may decide to come since getting refunds on airfare and hotels has been problematic.

And finally some companies are still hoping to find a captive audience from among the unknown number of MWC refugees who make it to town.

For instance, marketers for Oral-B, the Procter & Gamble dental-care brand, sent out a flurry of press invites in recent days for a VIP launch/dinner event on Sunday evening in which a new product debut was promised.

According to the invitation, the company would foot the bill for flights and a night in a hotel for those journalists who wanted to make the trip to witness up-close an “amazing new piece of technology which has been six years in the making.”

From the image attached to the press release, Fortune can reveal… it’s a smart toothbrush.