Email shows how SXSW is scrambling after a no-refund coronavirus cancellation that leaves sponsors and attendees hanging

• Austin, Texas-based SXSW cancelled the festival last week over coronavirus-related concerns and only offering refunds on hotel reservations.
• The festival's organizers are trying to minimize the damage by deferring payments until 2021, 2022, or 2023 and working to set up a "virtual online experience."
• Advertising and events executives said the cancellation could have ripple effects across their industries and lead to reduced spending on such events.
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Austin, Texas-based South by Southwest cancelled the tech, music, and film festival for the first time in its 34-year history over concerns about the spread of the coronavirus and won't refund attendees and vendors.

An email, printed below, that SXSW sent to registered attendees and vendors on March 6 shows how the organization is scrambling to minimize the damage without providing any refunds beyond hotel fees. Passes to the event ran about $1,400 per person for mid-priced interactive badges that last the length of the 9-day festival, said one source, with discounts for larger groups.

SXSW is offering to defer amounts paid for this year's festival until 2021, 2022, or 2023.

Several ad agencies told Business Insider that they and their clients stood to lose thousands of dollars but that the local creative and service industries would take a far bigger hit.

The scenario provides a preview of the potential postponement or cancellation of other ad industry events such as the Cannes Lions festival, scheduled for June 22-26. Chairman Philip Thomas said the festival's parent company, Ascential, is planning for all possibilities.

SXSW did not respond to a request for comment.

SXSW is negotiating to defer payment for agencies and sponsors, but not providing any refunds beyond hotel reservations

In addition to attendee passes, costs to sponsor events can run as follows, according to one agency:

• A daylong event officially sponsored by a company runs $10,500
• A evening event with a featured speaker is $5,200
• A sanctioned event, which does not appear on the SXSW schedule but bears its logo and stamp of approval, costs $5,200
• A sanctioned event without "marks" or logos costs $2,600

Also hurt are agencies that planned to stage events at SXSW for clients. Krystle Loyland, CEO of Austin ad agency Preacher, said experiential agencies would be hardest-hit.

Kristin Owen, co-founder and chief operating officer of Austin-based events company DoStuff Media, said everyone from major concert organizers like LiveNation to local servers, bartenders, florists, and Airbnb hosts who relied on SXSW would be impacted.

Some ad agencies said clients have been reducing spend on SXSW over the past several years

Executive strategy director Elizabeth Thompson of IPG's R/GA Austin said clients had already scaled back their SXSW investments over the past three to four years as attendees lost interest in events like huge stages sponsored by advertisers and wild cryptocurrency parties.

The cancellation could lead agencies to question the long-term value of such events and pay closer attention to the terms in their contracts, Loyland and Thompson said.

Read the full SXSW email to agencies, sponsors, and vendors below.