Force majeure and reputation, the keys to understanding the cancellation of the MWC

The cancellation of the Mobile World Congress 2020 (MWC) has resulted in the loss of almost 500 million euros and 14,000 jobs.
Last Wednesday, February 12, 2020, what many of us have been expecting for days has been articulated. In charge of GSMA, the organizer of the Mobile World Congress (MWC) in Barcelona, announced the suspension of the event after the wave of cancellations of numerous participating companies. The reference mobile trade show has an economic impact of 473 million euros, concentrates on 2,800 exhibitors and attracts about 107,000 visitors, according to the estimated figures of the last edition.

Direct spending for participating companies (exhibitors, MWC tickets, travel, diets, hotels and presentations) is close to € 500 million, according to industry sources. The rental bill in the two spaces of the Fira (Gran Via and Montjuïc) rises to about 150 million. As for the event space, a square meter at Fira de Barcelona costs 1,200 euros at the fairgrounds. Of the 120,000 square feet available, Ericsson, for example, had contracted 6,000, meaning it has already paid € 7.2 million for the space alone. In addition, the Swedish company had reserved 200 rooms and 70 rental cars for its employees.

Return of tickets: 300 million euros

The suspension of the MWC will mean returning the amount of tickets for those attending the event, the price of which ranges from 800 to 5,000 euros which could add about 300 million euros in a quick and approximate calculation. In this sense, Jordi Damià, professor at EADA Business School, also answered other questions about the losses of the event:

The organizer, who has made the decision to cancel the MWC without a health alert, will be responsible for the cost of the cancellation. That is, they will have to respond to the costs generated by the 2,800 registered companies.

The losses from canceling the World Event can be greater than the estimated benefits, and we can only grasp this decision by analyzing the decision based on long-term reputational, social responsibility and strategy reasons.

In that sense, although the profits are estimated at € 492 million, the losses may be higher. And, as Damià emphasizes, it is necessary to take into account that not only the income that was going to be produced by the hotel industry, transport (taxis), etc. is taken into account. there are a number of auxiliary suppliers that were directly related to the fair, such as stand assemblers, caterers, etc. That is why the cost will be very easily increased and this without considering the opportunity cost. This is all the businesses that were going to generate inside the fair and that, as it is not going to be carried out, will be a loss.

Get ready for the next MWC 2021

The corporate communications experts of our communications and marketing agency; Carlus Cardona, Enric Garcia, Carlos Tost, Tomàs Crespo, Joan Antoni Pons, David Güell and Lluís Feliu , talked about the decision made by the MWC organizers and concluded that very good things were done. The staging at the time of announcing the cancellation has been exemplary, both by verbal and non-verbal communication by the speakers, the reputation of the event is unaltered and the risk of tarnish is avoided. prestige that has been created during the past editions.

The negative note of the decision is the fact that there is no MWC in 2020, but as the event organizers have said, the next Mobile Word Congress will be ready in time, it will continue in the Catalan capital and it can be done with the impeccable reputation, reputation and business ethics of the participants.