SXSW Economic Impact Austin Grows To $355.9 Million

AUSTIN, TX — Organizers of the massive South by Southwest (SXSW) event staged annually in March encompassing interactive, music and film attractions revealed on Tuesday the massive gathering yielded an economic impact this year of $355.9 million this year — the largest in the festival's 33-year run.

“SXSW is a quintessential Austin story,” Mayor Steve Adler said in a prepared statement upon hearing the news. “Starting as a music festival, then expanding to include film and evolving further to cover interactive technology, as well as education and gaming, SXSW has become the world’s fair of the future. The economic impact of SXSW is on par with hosting the Super Bowl every year and all participants benefit year round.”

Where does the money come from?

SXSW officials broke down the financial windfall in various categories:

• Attendance Impact: $182.1 million - Official attendance impact includes expenditures by SXSW credentialed participants and single ticket holders at all SXSW events.
• Operational Impact: $157.1 million - The scale and complexity of SXSW requires year-round operations. SXSW maintains a sizable staff of full-time, temporary, and seasonal workers.
• Consumer Impact: $16.7 million - Consumer impact includes expenditures by SXSW Guest Pass and consumer participants as well as official parties.

Single most profitable event for hospitality industry

SXSW officials also broke down the various benefits to merchants yielded by the festival, its boast coming as the competing Austin City Limits festival is poised for its second weekend of musical offerings:

• In 2019, SXSW directly booked more than 12,000 individual hotel reservations totaling more than 51,500 room nights for SXSW registrants. Direct bookings by SXSW alone generated nearly $1.7 million in hotel occupancy tax revenues for the City of Austin.

• After nearly a decade of uninterrupted price increases, the average nightly hotel rate for SXSW-booked rooms in 2019 fell to approximately $365, a 6 percent decline relative to the previous year. Festival organizers noted the imminent opening of several new hotels will provide future attendees with an even wider range of options and continue the welcome downward trend in lodging costs. One example is the elegant and expansive Hotel Zaza on Lavaca Street, which opened to great fanfare last week with an epic party for those on the VIP list to the opening.
• The average length of stay for all SXSW registrants in 2019 exceeded 5 nights. Historically, extremely high housing costs have precluded gains in the average length of stay among registrants. This year, however, a small decline in average hotel rates contributed to extended visits to Austin by SXSW registrants and attendees.
• Entertainment spending by SXSW attendees goes directly to the restaurants, conference facilities, music venues, film theaters, retail stores, print shops, transportation companies, and other establishments throughout central Austin.

Colin Wallis, CEO of the Austin Parks Foundation, spoke to the global impact of the annual festival in contributing to the city's cultural profile and in furthering its reputation for innovation: "SXSW has been an amazing partner to the Austin community and has financially supported so many of our urban community spaces," Wallis said in a prepared statement. "We are grateful for their leadership in the Austin community.

Related story: SXSW Unveils New Downtown Austin Headquarters

Every March, festival officials said, SXSW broadcasts Austin’s "idiosyncratic identity" to millions of creative professionals around the world. The extensive global media coverage generated by SXSW represents an extraordinary return on the City of Austin’s comparatively modest investment in the event: "Austin is known worldwide as a community that embraces both creativity and commerce," officials added. "The ubiquity of SXSW media coverage is a unique and valuable asset to the City of Austin. In 2019 the value of SXSW print, broadcast and online publications coverage totaled $339.6 million."

And then there's that low overhead

"Austin’s distinctive brand identity remains the envy of communities throughout the world," SXSW officials wrote. "All too often, cities aspiring for global recognition feel compelled to spend millions or even billions of tax dollars in order to attract a fleeting mega-event such as the Olympics or the Super Bowl."

Not the capital city: "Austin has managed to establish a genuine and unique identity with minimal public expenditure," officials said. "Austin also benefits from an influx of international visitors each year that serve as an army of global ambassadors that help sustain the region’s reputation as a creative mecca."

Some of those cost savings are derived from the volunteer status of armies of volunteers lured to assist in running the event in exchange for complimentary passes to its various happenings. Patch has chatted with some of those volunteers as they describe their experiences and the lengths they travel to arrive in Austin and volunteer to help run things — as guides, admission checkers, room monitors and the like.

SXSW 2019 included 14 days of industry conferences with featured speakers and keynotes from Olivia Wilde, Bozoma Saint John, Adam Horovitz & Michael Diamond of Beastie Boys, and David Brooks, among many others; a four-day Trade Show; a six-night Music Festival; a nine-day Film Festival; the Virtual Cinema; the Art Program; the Comedy Festival; and SXSW Gaming. Popular free-to-the-public events included Outdoor Stage concerts at Lady Bird Lake, Wellness Expo, EDU Expo, Flatstock poster art show, SXSW Marketplace, and showcasing artists performing free shows in many downtown hotels.

About Greyhill Advisors

Greyhill Advisors is an economic analysis, economic development and site selection consulting firm with offices in Austin, TX and New York, NY. Greyhill represents a team of seasoned professionals with hands on experience performing economic analysis, assisting leading companies in their location decisions and working with communities to expand their economic potential. For more information, visit www.greyhill.com.

About SXSW

SXSW dedicates itself to helping creative people achieve their goals. Founded in 1987 in Austin, Texas, SXSW is best known for its conference and festivals that celebrate the convergence of the interactive, film, and music industries. An essential destination for global professionals, the event features sessions, showcases, screenings, exhibitions, professional development and a variety of networking opportunities. SXSW proves that the most unexpected discoveries happen when diverse topics and people come together. SXSW 2020 will take place March 13 - 22, 2020. For more information, please visit sxsw.com.