The cancellation of the world’s largest smartphone trade show last week amid rising coronavirus deaths has left startups around the globe with huge dents in their budgets — and little clarity about whether they will ever recoup their losses.
Small business owners say the sudden shuttering of the Mobile World Congress slated to start on Feb. 24 has left them eating costs for nonrefundable flights and hotel rooms at a time when travel to Barcelona had skyrocketed due to the show.
Companies planning to tease products at the annual Barcelona powwow have also lost hundreds of thousands of dollars building their exhibits — as well as months of man-hours used to prep for the show, sources said.
Robb Henshaw, a San Francisco-based MWC veteran, said some small businesses could easily be looking at losses of $1 million or more, which was what his previous company had spent at the conference before it was acquired by Cisco.
“If you want to go to Barcelona and actually have foot traffic and be seen, you’re talking a minimum quarter- million dollar to half-a-million-dollar investment for the booth and build-out,” Henshaw said.
“The flights are crazy expensive — like $1,400 a person flying coach,” he added. “The hotel rooms are anywhere between $600 and $1,000 a night per person, and that’s if you’re staying well outside of the city center.”
“The amount of logistics and planning that goes into preparing for that show is literally three months,” Henshaw told The Post. “It’s three months of your company’s productivity just gone.”
While big companies will easily swallow the cost of missing MWC, widely considered the telecom industry’s Super Bowl, smaller companies plan to push for refunds, sources said.
The conference’s governing body, GSMA, pulled the plug on Feb. 12 as exhibitors like Facebook and Sony started getting cold feet in the face of the global coronavirus epidemic that has killed more than 2,000 people, mainly in China.
So far, GSMA has told attendees that they shouldn’t expect to see the money they spent booking booths. The group called the cancellation a “force majeure situation” and posted a document on MWC’s website showing that its insurance policy includes exceptions for events like war, national mourning and SARS outbreaks.
One telecom specialist, who asked to not be identified while his clients press MWC to issue refunds, said a number of the wireless companies he works with have spent more than 50 percent of their annual marketing budget on MWC alone, including exhibition space, building stands and staff travel.
“It’s the anchor point around which these companies build their years,” he told The Post. “Now they’re at the point where they’ve made the investment and it’s like ‘now what?’ ”
Dave Rubie, who was planning on flying to Barcelona from Australia on behalf of his agriculture tech company Smart Shepherd, thought he was set when MWC was canceled because he had purchased travel insurance — only to be blindsided by the fine print.
“As it turns out, the travel insurance had a clause in it that anything involving a disease outbreak wouldn’t be covered,” he said.
“That’s money I would have normally used to do business development in my local region, or take a trip to the US,” he said.
Even local execs who can zip in and out of Barcelona in a day are feeling the pinch. Patricia López, CEO of Seville-based sex tech company Myhixel, shelled out $300 per person for round-trip flights to Barcelona — a trip that would normally cost closer to $100 — only to see her plans go up in smoke.
“We had a meeting with a company from the Netherlands and they had to cancel their trip,” López told The Post. The flights, hotels and conference fees ate up more than 10 percent of López’s annual marketing budget, which she said could have otherwise gone toward more business development.
“It’s really, really hard for us because we’re a startup with limited funds,” she said. “The impact [this cancelation] has on small companies is much bigger than it is on huge companies.”
GSMA did not respond to a request for comment, but in an e-mail sent to exhibitors obtained by industry blog Telecoms, said it was working on “a proposal” to present to exhibitors and commercial partners by the end of March.