Editor’s Note: With the exponential growth of COVID-19 we understand losses may presently be in the trillions for cities and changes daily. This analysis looks at four events in four cities to begin to understand the impact of these losses in relation to their 2020 plans for social policy.
2020 is going to be a year for the books; and not only the historical ones. The recent and rapid spread of the Coronavirus (COVID-19) has shaken a lot of governments to the core: California and New York have declared a state of emergency; Italy closed its borders to travel; and Iran’s own Prime Minister is confirmed to have tested positive for COVID-19.
While we understand the public health implications of a growing pandemic, there has been a good amount of discussion around economic losses for businesses. The stock market has dropped and journalists are reporting various losses from companies. While business is of great concern during these times, unless you are in the business of stay-at-home or sanitizing products, where I see the greatest concern is with cities.
When we think about public health, we immediately think of our elected officials and how they are making decisions to protect. Think about it: annually we see some type of promotion to get our flu shot because the influenza virus has had a significant health impact (see right).
However, cities are suffering major losses on the economic side. In a choice between public health and economic outcomes, cities will always choose the health of the people. But exactly how great are the losses a city feels and how does this affect its constituents? In this quick comparative analysis, I reviewed the economic hit on four cities in addition to some of their core strategic policies for 2020.
In this analysis, my aim is to exhibit the economic impact of lost tourism by analyzing place-based events that draw crowds of 30,000 people or more. By comparing the economic impact of these four events to the city’s annual budget, we can see how significant the losses may be. While each of these cities is known for more than these conferences, these major events also draw in a significant amount of tourism. More importantly, these events have play a role (more than 1%) on the local economy in these cities.
|City||Conference||Attendees||FY 20 Budget||Economic Impact of Conference||Percentage of City Budget Lost|
|Barcelona, SP||Mobile World Congress||108,000.00||$2,956,551,000.00||$480,000,000.00||16.24%|
|San Francisco, CA||Game Developer’s Conference||30,000.00||$12,260,000,000.00||$129,000,000.00||1.05%|
With losses totaling $1.1 Billion for these four conferences alone, we can imagine how much deeper the losses are due to decreases in the tourism, event, and hospitality industries. All four of these cities increased their annual budgets to focus on more social policy, specifically addressing housing issues. The biggest question to come from this may be: how will these strategic goals for 2020 be impacted by these economic losses?
Specifically in Barcelona, there was a 10% increase in their city budget to address social inequalities in order to achieve the U.N. Sustainable Development Goals. Of this increase, $550 Million Euros were being allocated to public housing. Will this plan for public housing shift with a loss of $480 M which is 87% of their budget for this housing initiative?
Austin, the fourth most populous city in Texas, has a 2020 strategic plan with health, sustainability, and economic opportunity at the forefront. Their FY 2020 budget is mapped to the six elements of their strategic outcomes, with $370 Million being allocation to Health & Environment. This allocation accounts for most of their assumed losses from SXSW. While much less impacted by this single conference, San Francisco allocated an additional $1 Billion this fiscal year for teacher stipends and solutions to homelessness, both which are major concerns for constituents in this city.
Presently, the world feels at a bit of standstill. Of course, there are hundreds of conferences still hosting their event and we are in what feels to be the eye of the hurricane with the spread of this virus. These economic losses are only from the most recent two months and specifically tied to these conferences; we imagine losses to be much higher for these and other cities.
I also want to note, that there has been no announced change in policy or strategic goals from any of these cities. We won’t know until next year if there is a possible correlation to any social policy cutbacks based on these circumstances. At the end of it all, I ask the question of what can proactively be done to retain the social policies set in place to reduce social inequalities in these cities? Will these goals, just like the conferences be pushed back for another year, and if so, what does that mean for the people in these cities?
Often times, social initiatives are the first cuts made to budgets and we can see what impact that would have on local residents. If an increase in budget can be used to address major social issues, we must also consider what happens to that social policy when planned revenue is lost.