Barcelona Takes Hit as Showpiece Tech Show Canceled on Virus

(Bloomberg) -- Enric Catala, a Barcelona sommelier, watched in dismay as clients began canceling the wine tastings he’d set up at this year’s showpiece technology congress known as MWC.

“Of course it has an economic impact -- it’s a huge event,” said Catala, who owns Taca de Vi, which offers wine tours, events and tasting sessions. “But this is all caused by something external -- it’s not as if Barcelona did anything wrong.”

Event organizer GSMA on Wednesday bowed to the inevitable and announced that the 2020 convention would not go ahead, after a succession of tech giants from Ericsson AB to Sony Corp. to LG Electronics Inc. pulled out citing concerns over contagion from the coronavirus.

The cancellation is a blow to the global tech industry, depriving companies of a big stage to showcase new products and lay down markers for the latest consumer trends. The show has never been scrapped in its 33-year history.

But it’s also a severe setback for Barcelona. Spain’s second-biggest city has over the years geared up its economy to serve MWC attendees while polishing its credentials as a prime venue for shows and conventions.

The congress takes up two main fair venues in the port city, and the 2019 edition hosted 107,000 people from some 200 countries while generating an economic impact of 473 million euros ($513 million), according to the Catalan regional government. The event also added 13,900 temporary jobs while attracting 2,400 exhibiting companies.

At a Barcelona news conference, GSMA Chief Executive Officer John Hoffman said the decision to cancel was due to a “force majeure” event beyond the organizers’ control. Parties suffering losses should consult their contracts to see how such events are treated, he said.

“How can we imagine such a gathering, 100,000 participants in a closed space, with people coming from all over the world when we haven’t even reached the peak of the epidemic,” Stephane Richard, the GSMA’s chairman, said in Paris Thursday. “I hope that all GSMA members will understand there was no alternative to that decision and that they will show their financial solidarity when it comes to the financial impact of this cancellation.”

Even so, Spain had seen no reason to cancel the event on health grounds, Deputy Prime Minister and Economy Minister Nadia Calvino told COPE radio in an interview on Thursday.

Cancellation Effect

The minister said she would await further explanations of the decision to cancel. Spain so far has two confirmed cases of the coronavirus.

It’s too soon to assess the effect from canceled hotel bookings, industry association Gremi d’Hotels said in a statement Tuesday, though many of Barcelona’s 430-odd hotels are traditionally fully booked by attendees months ahead of the congress.

“Barcelona has great health specialists who have said there wasn’t a risk from coronavirus,” said Jordi Mestre, the association’s chairman. He said he wanted to know why ISE, the world’s largest exhibition for the systems integration industry, was now underway in Amsterdam while MWC had been canceled.

Joe Hosken, communications director for ISE, said organizers of that event had decided to allow people to make up their own minds whether to attend, adding that most visitors are Europeans and most exhibitors either from Europe or the U.S.

Ride-hailing services such as Cabify saw a third of their MWC bookings canceled even before the event was called off, Jose Maria Goni, president of industry group Unauto in Catalonia, said in an interview. Local firms had already suspended plans to add 1,500 drivers to supplement the existing 1,000 staff during the congress.

“2020 is going to be an annus horribilis,” Goni said.

Some Spanish business leaders have suggested the cancellation could be an overreaction.

“I don’t think anyone in this country thinks this should happen,” Antonio Huertas, chairman of Mapfre SA, Spain’s biggest insurer, told reporters on Wednesday, adding that his company doesn’t have significant exposure to the cancellation.

--With assistance from Ellen Proper and Angelina Rascouet.

To contact the reporters on this story: Charles Penty in Madrid at cpenty@bloomberg.net;Thomas Gualtieri in Madrid at tgualtieri@bloomberg.net;Rodrigo Orihuela in Madrid at rorihuela@bloomberg.net

To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Jerrold Colten, Jennifer Ryan

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