South by Southwest (SXSW) has long been a pillar of Austin’s cultural and economic landscape, but recent trends suggest the festival is undergoing a period of contraction. Declining hotel occupancy rates, lower ticket sales, and adjustments to the festival’s structure in 2026 all point to a shifting experience for attendees and a possible downsizing of the event in the coming years. In the short-term rental space, we have really felt an impact as occupancy has dropped significantly as well as ADR (average daily rate).
Attendance: ~47,661 in-person attendees.
Economic Impact: $380 million.
Hotel Occupancy: 77.6% (down from 80% in 2022 and 86.5% in 2019).
Average Daily Rate (ADR): $436.26.
Attendance: Slight decline from 2023.
Economic Impact: $377.3 million.
Hotel Occupancy: 70.8%.
ADR: $423.95.
Data still emerging, but trends indicate continued softening.
Shortened Festival: The event will be reduced from nine days to seven (March 12–18, 2026).
Music Festival Overhaul: The standalone second weekend of music will be eliminated, integrating all performances into the full seven-day event.
Badge & Pricing Adjustments: Streamlined badge access with lower presale pricing to attract attendees.
Convention Center Closure: The Austin Convention Center will be under renovation until at least 2029, requiring SXSW to shift industry events to alternative venues across the city.
The Impact of the Convention Center Closure
The closure of the Austin Convention Center is arguably the most significant challenge facing SXSW in the coming years. The convention center has long been the festival’s hub for panels, industry networking, and brand activations. Its absence will force SXSW to decentralize its programming, spreading events across multiple venues. While this might encourage attendees to explore more of the city, it will likely dilute the festival’s cohesiveness and make networking more difficult. Without a central gathering point, SXSW risks losing some of its prestige as a premier industry event.
While SXSW remains a globally recognized event, these changes signal that the festival is adjusting to the event simply not being what it once was. Corporate sponsorships are way down, and big tech isn’t sending thousands of employees from single companies like it used to.
If we look at other music festivals and events globally, most have continued to grow because of social media impact and, let’s be honest, FOMO. However, SXSW seems to be moving in the opposite direction. A key indicator of this is the decline in music acts—SXSW 2025 featured only 1,012 bands, down from around 1,200 in 2024 and significantly lower than the peak years when nearly 2,000 artists performed. This decline is not just a sign of fewer bands applying but also of fewer industry professionals seeing SXSW as the must-attend event it once was.
Our fear is that SXSW has been trending downward, and now, with the convention center closing and the event shortening, we may see the festival truly take a nosedive.
From an STR perspective, we anticipate a similar trend to what has happened with ACL—rates for short-term rentals will likely remain no different than an average weekend in Austin.
We will hope and pray that SXSW can survive until 2029, and perhaps with the reopening of the convention center, it can reinvent itself as a globally recognized, must-attend event once again.
*Sidenote* Five Star VHR had an amazing SXSW attracting a number of celebrity artists to stay at our properties including Grammy artist, Leon Bridges, who posted an IG story playing his guitar on our front porch!
A guide for the licensing requirements in the Central TX area including hyperlinks to the city websites. Every city has different hotel tax (HOT) requirements. Main focus is Austin, San Antonio and the surrounding area.
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In the wake of the federal court ruling last week, the City of Austin Code Department has been working diligently to update its regulations.
A pivotal, multi-year legal case with profound implications for the short-term rental (STR) licensing landscape in Austin, Texas, concluded on August 1, 2023.
Nickol, myself, and our soon-to-come little one wanted to take this opportunity to say how much it means to us that you previously stayed in one of our homes!
