Rodeo Houston shuts down due to coronavirus concerns, city prepares for economic impact
it's canceled
As the coronavirus continues to march across the country, the City of Houston and the Houston Health Department on March 11 ordered the shutdown of this year's Houston Livestock Show and Rodeo. This stems from Houston and Harris County declaring at least a seven-day health emergency in response to a potential community-spread case of the virus in Montgomery County.
The premature halt to this year's rodeo promises to ripple through the Houston economy. The 2019 version created a local economic impact of $227 million, according to a study commissioned by the rodeo. By comparison, Austin's annual music, film, and tech event — SXSW — generated an economic impact of $355.9 million in 2019. On March 6, the City of Austin ordered cancelation of this year's SXSW, set for March 13 to 22.
The Houston Rodeo and Livestock Show joins a rapidly growing list of events around the world that have been canceled or postponed.
Ed Hirs, an economics lecturer at the University of Houston, says it's hard to gauge the economic damage from the rodeo cutback, but he guesses it could range from $50 million to $100 million. Among those who will feel the pain are rodeo vendors, Uber and Lyft drivers, waiters and waitresses, and hotel employees, he says.
"We can't replace the income that the workers have lost," Hirs says.
The loss of rodeo revenue comes at a particularly inopportune time for Houston.
The earlier coronavirus-related cancelation of CERAWeek, the major energy conference, likely will cost the Houston economy millions of dollars. Last year, CERAWeek hosted 5,500 attendees. Cancelation of other local events could inflict even more financial harm.
Meanwhile, the Houston energy sector is coping with a huge drop in oil prices. The Organization of the Petroleum Exporting Countries (OPEC) oil cartel now projects near-zero growth in oil demand this year, according to OilPrice.com.
Hirs says that as early as the end of this week, some energy employers in Houston could begin layoffs. On March 11, Houston-based Occidental Petroleum Corp. hinted at impending layoffs. The oil and gas exploration and production company said it was slashing capital spending for 2020 from a range of $5.2 billion to $5.4 billion to a range of $3.5 billion to $3.7 billion. In addition, Occidental said it would carry out "additional operating and corporate cost reductions."
Occidental's market value has plummeted to $11 billion, triggering speculation that billionaire Warren Buffett might weigh a buyout of the company. In August, Occidental wrapped up its $55 billion purchase of Anadarko Petroleum Corp., based in The Woodlands.
According to the Greater Houston Partnership, the Houston area is home to more than 600 energy exploration and production companies, 1,100 oilfield services companies, and more than 180 pipeline transportation establishments. In all, the energy industry employs more than 237,000 people in the region.
The combination of the oil slump, the coronavirus pandemic, the ongoing trade war, and other economic drawbacks could push Houston closer to a recession, Hirs says.
"We were heading toward a recession anyway," he says of Houston and the entire country. "I think the coronavirus has tipped it over the edge."
For now, the most immediate economic blow comes from the rodeo shutdown.
In a March 11 statement, the rodeo indicates it's "respectfully and dutifully" following the city's order. The rodeo began March 3 at NRG Stadium and was supposed to end March 22. Last February 21 to March 17, rodeo activities attracted more than 2.5 million visitors.
Rodeo officials say they're working on a process for refunding tickets.
Government officials say an apparent case of coronavirus in Montgomery County prompted cancelation of the rodeo. In this case, the person — who reportedly attended a rodeo-sponsored barbecue cook off February 28 — seems to have contracted coronavirus somewhere in the community rather than as a result of international travel.
In a statement, Bob Harvey, president and CEO of the Greater Houston Partnership, says the organization supports the declaration of a health emergency and the subsequent decision to end the rodeo early.
"It is important that we, as a community, take extra precautions and minimize opportunities for exposure as much as possible to slow the growth in the number of coronavirus cases," Harvey says.
Harvey praises the closure of the rodeo as "the right thing to do."
"As Houston's largest annual event, the Rodeo is a point of pride for our region. We regret the impact this necessary step will have on Rodeo exhibitors, guests, and participants," he says. "But the health and safety of our community must come first."
As of March 11, officials reported 14 cases of the COVID-19 coronavirus in the Houston area.
The rodeo says it's "deeply saddened" by the shutdown. However, it adds, "the safety and well-being of our guests and our community is our top priority."
Among the major musical acts whose rodeo performances are now canceled include Lizzo, Dierks Bentley, Keith Urban, Gwen Stefani, Khalid, Chris Stapleton, Brad Paisley, and Luke Bryan.
"We look forward to the 2021 Houston Livestock Show and Rodeo to continue to promote agriculture, education, entertainment, and Western heritage," according to the rodeo's statement.
The sEATz app has been freshly updated and is ready to rodeo. Photo courtesy of sEATz
