SXSW’s $380M economic impact shows return to prepandemic heights

This year’s South by Southwest appears to have had a local economic impact on par with the years prior to the Covid-19 pandemic, which nearly wiped out the popular music, tech and film confab in 2020.

An analysis from Greyhill Advisors found this year’s event generated $380.9 million in economic activity, a jump of $100 million from the 2022 edition and nearly $25 million more than the impact registered in 2019. Festival organizers note than price increases for festival badges and other inflationary forces likely played a substantial role in the increase, but they also said the strong return to business travel for many sectors helped the event continue its return to form.

“2022 was a scaled-back, in-person conference. I think a lot of the institutions, corporations and individuals weren’t necessarily ready to jump back into full-scale travel and being in big convention center spaces with a lot of people around, and South by Southwest gauged that in their programming and scaled back the conference and festival,” said Ben Loftsgaarden, a partner with Greyhill Advisors. “It wasn’t a shock to see that the economic impact was going to be smaller in 2022 as kind of a transition year. But now in 2023, with the total economic impact of $380 million, it’s kind of resuming the trend line from 2019.”

Data provided from the festival show attendance accounted for $234.1 million of economic impact, with operations totaling $88.7 million and expenditures from festival partners totaling $58 million.

The festival’s demographic data show 62 percent of attendees are between the ages of 26 and 45, with 67 percent having a household income of at least $100,000. The main industries for total attendance in 2023 were marketing and advertising, film and television, music, press and media, and computer technology.

Data from past years show attendance has remained a consistent part of the overall economic impact calculation, with this year’s registrants accounting for 61 percent of the $380 million total. In 2019, attendance accounted for 56 percent of the $355.9 million impact, and the figure ranged from 50 percent to 64 percent going back to 2013.

Loftsgaarden said strong attendance across the pillar interactive, music and film portions are due to the festival’s constantly evolving programming tracks.

“They’re very nimble, and they’re very entrepreneurial and innovative, and I think they try to craft the conference in a way that reflects the type of target audience that they’re going after,” he said. “They’re going after folks that are constantly changing and innovating, and new industries are forming and new things are happening – whether it be in the tech space and the artistic space and the film space – and South by Southwest continues to try to adapt their programming to that target audience. And I think that’s the ethos that kind of drives a lot of the programming.”

Hotel booking data from Visit Austin show that the interactive portion of the festival remains the most economically impactful. A comparison of bookings for March 9-18 in 2022 vs. 2023 shows occupancy grew by single-digit percentages for the first half of the festival, but declined once the interactive portion ended. That decline was enough to cause an overall occupancy decrease of 1.4 percent for 2023, though the average daily room rates and revenue per available room increased.

Hugh Forrest, co-president and chief programming officer for SXSW, said interactive attendance in 2023 was significantly impacted by the early spring collapse of Silicon Valley Bank, which greatly affected the liquidity of startup technology companies across the country. He said programming for the 2024 event will reflect the widespread attention on artificial intelligence technology and look ahead to the potential of quantum computing.

Looking into the festival’s future and the impact of the demolition and reconstruction of the Austin Convention Center in 2025, Forrest said the growth of event spaces downtown from new hotels will help SXSW maintain a consistent level of programming, though that might mean moving beyond downtown and even outside of Austin.

“With the number of additional downtown hotels that we’ve seen in the last decade, we’re better prepared for not having a convention center than we ever were before,” he said. “We’ll probably have to expand the downtown footprint a little bit. I don’t know exactly what that means right now but it’s going to be a different world without the convention center. It’s certainly something that I think we’ll be able to overcome. What are the options if we had to go outside of Austin during that time period? I don’t think that’s a great option, but you’ve got to be prepared for every possible contingency, and that’s what we do.”

Photo made available through a Creative Commons license.

The Austin Monitor’s work is made possible by donations from the community. Though our reporting covers donors from time to time, we are careful to keep business and editorial efforts separate while maintaining transparency. A complete list of donors is available here, and our code of ethics is explained here.