Hipsters at the Gate

SXSW will be upon us in less than two weeks. As everyone in Austin is well aware, the annual music-film-tech festival brings in hordes of visitors, turning downtown Austin into one long queue for everything. At this point, it’s become a well-worn cliche. Despite the complaints of locals, no one can deny the tremendous economic impact SXSW has on Austin. The most recent estimates show that $317MM was brought in during 2015 alone.

A significant portion of that revenue goes to the hospitality industry, which has fueled a boom in hotel developments in the downtown area. With all of that development going on, it’s easy to wonder why there’s still always a shortage of rooms during SXSW. Many hotels enjoy bookings a full year in advance. On top of hotel lodgings, you also have STR (short-term rental) listings. Those too go quickly, and sometimes for steep prices.

All of this points to one thing – a supply shortage for available rooms. We all know it exists, but is it possible to quantify it? In other words, how many rooms (inclusive of hotels, STRs, and vacation rentals) are actually available, and how many are actually needed? How many people do not have a room during SXSW?

Real Data Is Hard to Find

We will need two key numbers to answer our questions. First, we’ll need to know how many visitors travel to Austin during SXSW. Second, we’ll need to know how many visitors Austin can house.

Determining # of Visitors

It turns out answering the first part is very hard. SXSW publishes some great stats on official numbers, e.g., official attendees, people booking through official SXSW hotels, etc., but the data dries up when you realize a lot of people visit Austin during SXSW without any official credentials. Here’s what an official audit by Greyhill Advisors reported for 2014:



Core SXSW Badgeholders 44,500
SXSWEdu 5,900
Musicians + Crew + Posse 16,100
Wristband holders 9,000
Film Pass 1,400
Paid Single Admission (Music + Film) 60,000
Butler Park Outdoor Stage Concert Series 62,500
Collateral Attendance 4,500
Carver Museum Theatre 700
SXSW Gaming Expo 45,500
Flatstock / Music Gear Expo 43,000
Digital Creative Job Market 4,000
SXSW Create 20,000
Education Expo 4,500
Renegade Craft Fair 55,000
Total 376,600


In addition to these official attendees, they estimated that over 100,000 individuals travel to Austin with no official credentials. Unfortunately, they don’t provide any detail on where this estimate comes from, so we can’t assume it’s very accurate.

Another report by SXSW hotel shows 12,431 individual hotel reservations made in 2015. This count seems like a more useful number until you realize there are several problems with it. Specifically:

  • It doesn’t list the number of people per reservation.
  • The figure only considers 69 official SXSW hotels. There are many other hotels in Austin.
  • It doesn’t consider the use of STRs.

Despite a lot of searching, and inquiries to SXSW, we were unable to find hard data on how many visitors come to Austin for SXSW. So we took a different angle. It took some time, but we finally discovered that Austin-Bergstrom Airport reports statistics on travel in and out of Austin (or at least their airport) every month. Their data shows that a total of 504,769 people deplaned in AUS during March 2015. At this point, it becomes a safer to make some estimates. If we assume half of those people come during the 11-day period that is SXSW, then there are 252,384 people arriving in Austin during this time. Even if they aren’t all here for SXSW, they presumably need somewhere to stay. While we wouldn’t claim this is 100% accurate, it’s probably much closer to the mark than any other estimate on number of Austin visitors during SXSW.

Determining Visitor Capacity in Austin

Like # of visitors, determining visitor capacity is fraught with potential inaccuracies. As we mentioned, SXSW reports the room capacity for 69 official hotels, but this is just a fraction of available hotels in Austin. In fact, there are closer to 198 hotels available, according to online listings. In addition to hotels, multiple STRs add a significant amount of capacity. A snapshot of Austin STRs across multiple sources shows approximately 223 properties available.

Thankfully, determining the exact number of rooms and people these hotels and STRs can house is relatively simple with access to a business and property database. A quick query to both generates results on number of rooms for hotels in Austin, as well as number of people that STRs can house. Since this includes data aggregated from multiple sources, we can get a comprehensive picture of both hotel and STR capacity. Here’s what those numbers show:

  • Austin hotels can house 39,787 people (26,525 hotel rooms available and assuming an average of 1.5 people/room)
  • Austin STRs can house 34,057 people

Remarkably, the STR capacity is almost equal to hotel capacity, which means that there is nearly double the housing capacity than typically reported.

Bringing It All Together

Before we determine if there’s a shortage of housing capacity (and if so, how big it is), we need one last figure: what’s the average stay of a SXSW attendee? Fortunately, this is the easiest stat so far since it’s reported directly by SXSW: 4.81 nights in 2015. This stat relates to official hotel stays, but we think it’s safe to assume it holds across other housing options.

To determine surplus/shortage, we need a measurement of how many total nights are needed. For example, if the average stay is 4.81 nights, then 10 visitors staying will need 48.1 “visitor-nights.” We get the following if we apply this measure to the numbers we calculated above:


# of visitors during SXSW 252,384
# of nights/visitor 4.81
# of visitor-nights needed 1,213,967
Visitor capacity in hotels 39,787
Visitor capacity in STRs 34,057
Total visitor capacity 87,481
# of nights during SXSW 14
# of visitor-nights available 1,224,734
Visitor-night surplus 10,767
# of extra visitors possible 2,238


Just Enough Capacity, Thanks to STR Listings

So there you have it – our best calculations show that there is extra capacity for 2,238 people during SXSW. That’s about 1% of the estimated visitors. In all likelihood, this means that Austin is matching capacity. However, here’s the thing, it has enough capacity only because of STRs. Without STRs, there would be a substantial shortage, likely around 50% of demand.

It comes as some surprise, then, that in a recent vote, the city council banned non-owner-occupied STRs. It’s unclear from our data how this affects the STR supply (AirBNB claims 15%), but our data makes it clear this ruling will significantly impact the city’s capacity for tourists and visitors. It won’t take full effect until 2022, which gives hotels some time to increase their capacity. In fact, some have claimed this ruling was a result of the hotel industry’s influence within Austin’s city council.

A Battle for the Soul of Austin

In many ways, STRs are a microcosm of what’s happening in Austin. They are a critical part of the city’s event-driven economy. At the same time, relaxed regulation can contribute to disruptions to peaceful neighborhoods and rising housing costs for locals. In a city that’s resisted growth for so long, it is inevitable that STRs would become incredibly popular. In fact, Austin has the highest concentration of STRs in the US:

On one hand, if Austin is to support a growing event-driven economy, it will need burst housing capacity. In addition to SXSW, other events like ACL, Formula 1, and X Games create massive surges in housing demand throughout the year. On the other hand, STRs naturally raise housing prices, typically driving out local creatives that make Austin what it is.

This issue isn’t contained to just downtown Austin, either. Here’s a map of all STRs in Austin:

As you can see, STRs show up all over Austin. STR supply (and presumably demand) exists anywhere within a 1-hour drive of downtown and even into the outskirts of Austin.

Striking the right balance on STR regulation will be of critical importance to Austin’s future. Even with an expected 28% increase in hotel capacity, Austin would not be able to support its tourism demand without STRs. With equal hotel and STR capacity, removing 15% of STR capacity mostly offsets the future increase in hotel capacity.

STRs play a critical role in supporting Austin’s festival economy. Without them, the economic impact of events like SXSW and many others would inevitably shrink. It’s up to Austin’s local government and its people to find a way to take advantage of this new economic force to help the city grow.

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