Is Austin Greed Ruining the Spirit of SXSW?

2016 was RVE’s 13th year producing events at and around SXSW Interactive (#SXSWi). Given our history with the event, I want to share my perspective on the rumors I keep hearing about SXSWi feeling smaller this year.

Let’s put that idea to rest right away. Attendance was projected to grow 3% over last year’s 33,825, and even if it shrank to 30,000 (which I don’t think it did), it would hardly feel like SXSWi shrank, wouldn’t you agree?

But something has changed: it doesn’t feel as big.

So here are my personal thoughts on why I think this year’s SXSWi felt different than the past 4 years.

1. We have fewer open parking lots available to rent for big outdoor installations and events. Read this past blog post about our skyline constantly changing…we have the good fortune of being in a city that is building new office building, condos and hotels. This means there are NOT as many parking lots to choose from HOWEVER it does mean we have more hotel event space to host events from. When you don’t see the people on the streets or in open parking lots, it’s easy to understand why you think the crowds are lighter this year.

2. We have fewer unofficial events and this is partially by design since the City of Austin put a cap on the number of permits it would release during SXSW this year. This leads to more events being hosted in official venues and NOT in unlicensed buildings/lots. This results in an increased demand for the bars on Rainey Streets, bars on E. 6th Street, bars in the Warehouse District, restaurants, etc. because licensed venues typically have majority of the permits required to host public events.

3. There are no last-minute permits anymore. From experience, sponsoring companies often commit to events and spending just weeks before SXSW. But with new permitting rules, they can’t make these last-minute spending decisions — which directly reduces the overall economic impact of SXSW. This leads to fewer pop up SXSWi parties at Austin startup offices.

4. We have fewer official mega events, and I have two theories to explain why this is the case:

a. Austin is getting greedy — anyone that knows me well knows that I talk a lot about supply and demand, and I always encourage other business owners to charge what they are worth BUT I am NOT for price gouging…it’s a very NON-Austin thing to do, and it’s very unattractive when it comes to building long-term business relationships. A particularly notable example this year was the parking garage managed by AMLI that was asking for $80 for single day parking this past weekend in Downtown Austin. When you are more than twice the price of the 4-star hotel’s valet parking across the street from you, you are being a total douche, and it’s not cool. Event planners, restaurants and rental companies don’t charge 5–8x their normal rates during SXSW. I believe we have won people over to Austin the past 3 decades because we are welcoming and reasonable — this price gouging IS NOT Austin.

b. Pay to play sponsorships has increased significantly — SXSW Sponsorships are unfortunately not getting any cheaper these days but they are the ones that own our city during this citywide event, so this is a tricky beast because I understand the sponsorship model for events…other than educating potential sponsors, how do we find that right balance to make sure SXSW can cover their expenses and still allow for the right mix of official vs. unofficial SXSW events?

So where does this leave us? I have been calling Austin my home for 22 years now, and I love our city, and I love what it has matured into. I LOVE events (clearly if you follow me on social media), and I don’t think this change up in 2016 is going to be the start of a downward trend. We need a bit of a correction but what I would love to see is for all of us in the hospitality and events industry to come together to tackle 2017 and beyond (ie, charge reasonably) and show why Austin is the premier city to host SXSW and any other large citywide event. I LOVE how SXSW has gotten so much global attention in the past 4 years, and let’s continue to show the world why Austin is the perfect city to play host to these types of events.

I’d love to hear from you — tell me what you think was different and what you liked and didn’t like about SXSWi this year.