By Francesca Fontana
Warren Buffett's "Woodstock for Capitalists" was effectively
canceled this year, dealing a huge blow to Omaha's economy.
Each year, Berkshire Hathaway Inc.'s annual meeting brings tens
of thousands of attendees to Nebraska's largest city. These
Berkshire acolytes flood local hotels and restaurants, and
Berkshire businesses sell their wares at the convention center.
But this year, shareholders are banned from attending in a bid
to limit the spread of the novel coronavirus, and Mr. Buffett will
speak via a live-streamed video instead. It is a significant loss
for Omaha businesses. The economic impact of the meeting alone is
$21.3 million, according to Visit Omaha, the city's tourism
bureau.
It is also not the only cancellation to hit Omaha.
The annual College World Series, slated for June, has been
postponed until 2021, as has the U.S. Olympic swim trials. Visit
Omaha estimates that event cancellations from March 1 to June 30
will cost the city's economy $197 million.
"It's been a cascade of bad news," says Dennis Pate, executive
director and chief executive officer of Omaha's Henry Doorly Zoo
and Aquarium, which often hosts private parties over the weekend
for Berkshire senior executives and board members, including Mr.
Buffet. Mr. Pate expects the zoo to lose roughly $25,000 from event
cancellations during that weekend.
Omaha isn't alone. San Diego has canceled this year's Comic-Con
International convention; Boston has postponed its annual marathon
to September. Cities across the world have been forced to cancel or
postpone their marquee events due to the pandemic, each with its
own unique and staggering economic toll.
The CHI Health Center Omaha, operated by the Metropolitan
Entertainment & Convention Authority, hosts the annual event in
its massive arena and adjoining exhibit hall. A MECA representative
says the loss of the Berkshire meeting will cost hundreds of
thousands of dollars.
Hotels and short-term rentals around the city have seen a wave
of cancellations. In 2019, hotel revenue in Omaha for the Berkshire
weekend alone totaled $6.7 million, according to data company
STR.
Kellie Rice, who rents out rooms in her house through Airbnb
Inc., typically charges about $45 to $55 a night. During last
year's annual meeting, Ms. Rice charged around $200 a night.
"Some people on Airbnb were getting $600 to over $1,000 a
night," Ms. Rice says. "I thought there was no way people would pay
that. I wasn't going to make that mistake again this year."
Instead, her bookings for the next several months have all but
disappeared.
Ms. Rice also drives for ride-hailing services Uber Technologies
Inc. and Lyft Inc. During the annual meeting she spends hours
driving shareholders between the convention center, restaurants,
and Mr. Buffett's home.
Ms. Rice has recently switched to delivering food for Grubhub
Inc. and DoorDash Inc. as demand for rides has fallen.
At Gorat's, a favorite of Mr. Buffett, manager Gene Dunn says
the steakhouse typically sees 3,000 patrons over the course of a
Berkshire weekend. In all, the event usually brings in over
$150,000.
"It's our four biggest days of the year," Mr. Dunn says.
Elizabeth Wallace, general manager at 801 Chophouse, said that
there are three dates you must be available to work if you want to
be hired by the steakhouse: New Year's Eve, Valentine's Day, and
the Berkshire meeting.
"This is your moneymaking weekend," she says, recalling her own
days as a bartender and a server. "I'll be able to pay my mortgage
for a couple of months after working three days."
Even if the event wasn't canceled this year, attendees looking
for a reservation would be out of luck. Both restaurants shut their
doors in mid-March due to the pandemic, and on March 20 Douglas
County mandated that restaurants close their dining rooms.
Aside from restaurants, there is also money that won't be made
at the CHI Health Center where several Omaha-based businesses
typically join the dozens of Berkshire-owned companies in the
exhibit hall.
Borsheims, a local jewelry store that has been a unit of
Berkshire since 1989, usually takes a spot in the exhibit hall and
hosts special events at its store on Friday and Sunday. Chief
Executive Karen Goracke says the store has more than 20,000
visitors over those two days.
The store, which offers discounts to shareholders during the
weekend, has been sending out guides to its vendors' collections
and offering its discount online instead.
"It won't be the same opportunity to connect, but hopefully we
can replace some of that feeling," Ms. Goracke says.
One local business owner who will miss out on the exposure that
a Berkshire meeting brings is Phillip Black, co-owner of the
family-owned bookstore The Bookworm.
Mr. Black, who typically runs a booth at the convention center,
says he will miss the excitement of selling at the annual meeting.
He recalls that in 2005, The Bookworm sold about 3,500 copies of
Berkshire Vice Chairman Charlie Munger's newly-released "Poor
Charlie's Almanack" during the weekend.
Mr. Black says he and his wife, co-owner Beth Black, had been
working up this year's book list with Mr. Buffett just before the
annual meeting was canceled. The bookstore will still be selling
the titles and offering its special shareholder discount
online.
Total sales at the event typically exceed $100,000, Mr. Black
says, which is comparable to what the bookstore sells in a month
during slower parts of the year.
This year will be different. The bookstore has received a
Paycheck Protection Program loan that allows them to keep their
staff filling telephone and web orders as foot traffic dies
down.
"That will see us through April and May, and we just hope that
everything revives," he says. "In a business like this, you have to
be optimistic."
Write to Francesca Fontana at francesca.fontana@wsj.com
(END) Dow Jones Newswires
May 01, 2020 05:44 ET (09:44 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.