Listen to Austin 360 Radio

SXSW economic benefits spread across the city

Brian Gaar
Dar Richardson gets some help bagging his leftovers Thursday at El Azteca Restaurant. The East Seventh Street eatery reports seeing a jump in business of 75 percent or more during SXSW.

Even though East Austin's El Azteca Restaurant is far from the South by Southwest action, owner Daniel Guerra says he'll still feel the impact.

During the music portion of the festival, business at the restaurant on East Seventh Street — more than two miles from downtown — jumps 75 percent or more, he said. Record company employees call several months in advance to reserve a table.

"I have two (reservations), as a matter of fact, that have been up for six months," Guerra said.

While most of the hundreds of events tied to the SXSW interactive, film and music gatherings are concentrated in and near downtown, the economic benefits spread far across the city, from sold-out hotels in South Austin to North Austin shops where foreign visitors come to load up on comic books.

As the music event has grown, there are now official and unofficial events in East Austin , including at the Carver Museum & Cultural Center, the Flatbed Press print gallery on East Martin Luther King Jr. Boulevard and coffee shops and pizza restaurants on Manor Road.

Other events reach as far north as the Aloft Hotel at the Domain and as far south as the Waterloo Ice House at the Southpark Meadows shopping center, with still more clustered near the University of Texas.

Even employees at a bicycle shop in Hyde Park notice a change during South by Southwest.

At the Peddler Bike Shop, a neighborhood institution at 51st and Duval streets, service manager Ron Belcher said he always sees a surge around the time of the music, film and interactive festivals.

It's not out-of-towners, he said, but locals who work downtown and want to bike to avoid parking hassles during SXSW.

"It's always like, 'I need this repaired. This has been sitting in my garage; it has tons of flats,'" Belcher said. "We get a lot of that."

On North Lamar, the employees at Austin Books & Comics see their own SXSW phenomenon.

Regular customers don't make their normal weekly stop, said Brandon Zuern , the store manager. But they're temporarily replaced by lots of out-of-towners.

"I've got a guy from Ireland that comes in every year and buys a lot of comics," Zuern said. "It's really neat, because for a couple of weeks, we have a customer transplant."

As the down economy hits the local convention business this year, city officials say Austin is particularly lucky to have South by Southwest, which brings in tens of thousands of people for nearly two weeks of events.

Last year, 39,200 people paid for admission to music or film events alone, according to an economic impact report by Greyhill Advisors. Many more come to Austin for the growing calendar of free events.

"It's like two big conventions, back-to-back," said Bob Lander , CEO of the Austin Convention & Visitors Bureau.

Those numbers, combined with the length of the event, produce ripples that affect more than just hotels and restaurants — businesses that traditionally benefit from conventions.

And those ripples can spread for miles, city officials and business owners say.

In South Austin, the 312-room Omni Austin Hotel at Southpark at Interstate 35 and Ben White Boulevard has seen "tremendous" demand this year, said Tim Chegin , director of sales and marketing.

While the hotel reserves a block of rooms for SXSW, Chegin said, the entire facility is sold out for both the film and music portions this year. "It's just a boon for us," Chegin said. "It's actually very exciting."

Last year, SXSW brought in just shy of $100 million, according to Greyhill. That was down a bit from the $103 million of 2008, probably owing to the recession.

Lander said convention business this year has been affected somewhat by the economy.

Last year, the city booked almost 450,000 hotel room-nights for future conventions, he said. This year, the projection is down to 400,000.

Does that make South by Southwest Austin's version of Old Reliable?

"We certainly don't ever take it for granted, but yes, there are events in every community that are repeat events," he said. "We're lucky that ours is South by Southwest."

Of course, downtown businesses always see a big boost from the festival.

One trend is that people are arriving earlier and staying later, said Tod Peddie, director of sales and marketing for the 321-room Holiday Inn Town Lake. The real balancing act, he said, is trying not to oversell a hotel's rooms.

During the music festival, bands will regularly perform on an outside patio at Güero's Taco Bar on South Congress Avenue, said manager Gina McClelland . If you want a table inside, the wait can stretch to two hours.

The restaurant has taken "a little hit" with the recession, she said, but the Güero's staff is looking forward to the festival's hustle and bustle.

"We just all know there's going to be lots of extra shifts you're working, but we just suck it up and do it," McClelland said.

Joshua Bingaman , who owns Progress Coffee on San Marcos at East Fifth Street, said his profits doubled during last year's SXSW. During the music portion, he said, there was a line from the register to the door every day.

When Kanye West performed nearby, the police shut down the streets. Bingaman's employees couldn't even get to work.

But the hectic experience brings the staff closer together, he said. (It also doesn't hurt that their tips are 10 times bigger than normal.)

"We're all in the foxhole for five days, and everybody knows it," Bingaman said.

Even before SXSW starts, some businesses see an impact. In the weeks leading up to the event, locals tend to get the basics taken care of — like haircuts, said Michael Portman , a co-owner of Birds Barbershop, which has four locations around town.

Portman sees an increase in business during those weeks, especially at his shop on East Sixth Street, which is closest to downtown.

"It's great," he said. "This event is really remarkable for Austin. ... It's our big party."

Back up north, Belcher said he notices SXSW fallout at his other job as a barista at Epoch Coffee on North Loop Boulevard.

Around that time, the coffee shop sees its own increase in customers.

"It's the locals that never stray this far north that just want to get away from downtown," he said.

bgaar@statesman.com; 912-5932