“South By,” as Austin residents call it, has become a 10-day economic powerhouse, its effect on the local economy akin to hosting a Super Bowl, reaching $356 million last year, according to an analysis by a consulting firm, Greyhill Advisors. Nearly half a million people from around the world were expected to come, filling 55,000 room nights at hotels.

But last week, before a single case of the virus had been reported in the city, the mayor of Austin, Steve Adler, announced a local state of emergency as the coronavirus emerged in the United States. His disaster declaration effectively canceled South by Southwest for the first time since the festival was founded in 1987.

A nonprofit foundation created the Stand With Austin Fund, where residents can donate money to those negatively affected. Festival organizers said they took the “necessary but heartbreaking step” of laying off about a third of their full-time staff. The mayor and other officials have encouraged residents to go out and spend money at local businesses, and musicians have signaled a willingness to play for free or at reduced rates to keep the venues packed for bartenders and waiters. Harold Cook, a former executive director of the Texas Democratic Party, came up with #TipForTwo — double tipping to help the service industry.

“In some respects, we need to look at this as if a tornado came through our city,” Mr. Adler said. “There’s the cumulative number, the $350 million number, but behind that number are many, many individual stories of hardship.”

In the days after the announcement, downtown Austin has been anything but empty, even after city officials on Monday banned most mass gatherings until May. There was a sense of defiance — and purpose — of supporting local businesses and workers.