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Comment by PeterStuer | Hacker News Reader

"The community" receiving this money in each of these cases refers to a very small percentage of the overall population of the region.

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I would bet that the majority of small businesses in Austin bank on the yearly spike in traffic, and that missing out on that is a very big deal.

Austin has more than 10x more people every day than attend SWSX which lasts for less than 2 weeks. It’s even less significant as many people avoid the area during big events. Perhaps a 5% increase in sales for under 3% of the year so what 0.15% increase as a high estimate over the year.

According to this[1], SXSW brings Austin about $350 million annually. According to Wikipedia, Austin's annual GDP is about $1.5B so 350/1500 = roughly 23% of the city's annual GDP.

Anecdotally I know of many people who work year round to prepare for an event at SXSW and rely on it for their entire annual income.

Cancelling SXSW is a big deal to this city. It hurts. It's not to be downplayed.

[1] https://austin.culturemap.com/news/city-life/09-27-17-econom...

"SXSW brings Austin about $350 million annually."

Is that $350 million into the city taxes, or just $350 million for some private citizens, apparently some of whom you know and for whom it is undoubtedly a big deal.

It's $350 million in economic activity brought to or generated in the city, not in tax revenue. You can see the breakdown here.

https://explore.sxsw.com/hubfs/2019%20SXSW%20Economic%20Impa...

That GDP number is way off. 1.5B / 1 million people is 1,500$ per person. https://en.wikipedia.org/wiki/List_of_U.S._metropolitan_area... Gives 146B in 2018.

That’s 350M number is also extremely suspect, at a minimum including existing city residents as the hotel reservations are vastly below attendance.

Still even assuming that 350M was correct and not ridiculously inflated it’s 350/146,000 = 0.2%.

You're confusing GDP with GDP per capita, and also 350,000,000 / 1,460,000,000 = 0.23972602739 and to convert that to a percentage you multiply by 100 so you get 23.973% as the result.

The number from wikipedia was 146 Billion (26 Austin-Round Rock, TX 146,784 metropolitan statistical area in millions of dollars) if you looked at the link I gave. Which is 146,784,000,000, though you could argue the city is a smaller area. Remember, thousand 3 zeros, Million 6 zeros, Billion 9 zeroes.

The GDP per capita was simply a sanity check showing how 1.4B must be wildly wrong.

https://en.wikipedia.org/wiki/List_of_U.S._metropolitan_area...

You're off by a factor of 100. Austin's GDP is ~$150 billion.

The people attending an event like SXSW aren't like your regular citizens. The wealth profile is different. The visitors have spending money, often a lot of it. Many will treat the event as vacation or otherwise a justification for indulging themselves. Some will be able to expense their spending. Taking this into account, as well as geographical concentration, I can easily imagine that restaurants and cafes in the area could have 100% increase in sales for the duration of the event.

The quoted numbers are extremely likely inflated but feel free to use: $355.9 million impact on Austin’s economy / 146Billion in the metropolitan statical area = 0.24% as an overly generous guess. Aka including staff who then spend that income on other things. That’s still less than the shutdown costs over a few days.

In the end the overwhelming majority of people are not throwing down thousands of dollars per day at bars and restaurants.

That $356M is probably much more concentrated than the $146 billion.

As the old parable goes, maybe it doesn't make a difference to all those thousands of starfishes washed on the shore, but it made a difference to those few the boy threw back into the sea.

Most of that 356M is not really concentrated consisting of money cycling through the economy.

A small percentage is going to be quite concentrated, but at that point you’re not really talking about Austin. Just the people actually running the event.

In terms of impact on local small business it’s still a small revenue bump as SWSX pushes tourists to chose other dates or other cities with cheaper hotel rooms etc. Further, most companies don’t have the slack to really benefit from such events. Something like a 2-3 percent boost in a local bar’s annual profit seems possible, just not that important relative to a shutdown.

Not necessarily.

There's a big halo effect on these sorts of things. When hotel rooms get booked, housekeepers get more hours, bartenders get more tips, restaurants get more covers, etc.

For the event itself you also have the carpenters who assemble the stages, security staff, garbage runs, etc.

Also taxis and rideshares get a spike in orders, more coffee and food is taken to go, more people visit bars and pubs for afterparties, more souvenirs are bought, ... Big events cause a lot of ancillary spending to happen.

This is extremely incorrect. A significant part of Austin’s economy is built on SXSW. Many small businesses here developed in tandem and cannot survive without it. Then there is the second- and third-order effects, such as those on contractors and freelancers.

Spend any significant amount of time in a tourist city and you'll find this isn't necessarily true. People plan their entire lives and balance sheets around these events.

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