City of Austin Reeling Due To SXSW Cancellation SXSW employees and the city of Austin hospitality industry are feeling the financial pinch due to the coronavirus. Last Friday Austin city officials pulled the plug on the tech, music, film and movie event due to the threat of a coronavirus outbreak. SXSW LLC, the company behind the South by Southwest festival held in Austin each year since 1987, stands to lose millions. SXSW co-founder and CEO Roland Swenson said Monday it has laid off about a third of its 175 year-round employees. The company \u201chas been rigorously reviewing our operations, and we are in the unimaginable position of reducing our workforce,\u201d a SXSW spokesperson said in a written statement. \u201cWe are planning for the future and this was a necessary, but heartbreaking, step.\u201d Apparently SXSW insurance policy does not cover cancellations triggered by \u201cbacterial infections, communicable diseases, viruses and pandemics,\u201d Swenson told the Wall Street Journal. The cancellation is also having a domino affect on the hospitality and restaurant sectors as well. Paul Vaughn at Source Strategies a San Antonio-based company analyzes hotel data told KXAN. "That period, in Austin, is the highest demand period of the year. For March, I would expect that you\u2019re going to see probably at least a 20% drop in revenues with the corresponding drops in rates and occupancy for those hotels." Read: WATCH COLDPLAY COVER PRINCE\u2019S \u201c1999\u201d ON NPR\u2019S TINY DESK In Fiscal Year 2019, the City of Austin reported about $112 million in the hotel tax revenue. SXSW is a 10 day festival which had been scheduled to start this Friday. The festival featured an extensive lineup of artists performing at the music festival including Wire, Otoboke Beaver, Alex Somers, Hop Along\u2019s Frances Quinlan, Nasty Cherry, Algiers, Walshy Fire, Basia Bulat, Weeping Icon, and more. This year they add 350 new acts. SXSW Music Festival showcases offer attendees the opportunity to experience tomorrow\u2019s headliners on small stages at unique central Austin venues.