The South by Southwest Conference & Music Festival is celebrating its 40th anniversary in Austin, and the festival looks a little different this year.
While some local businesses say they are enjoying a boom in 2026, others are not so happy.
“I’ve been trying to figure out where everyone is, and things are very different this year,” said Jackie Dunn, manager of the Hideout Cafe on North Congress Avenue. “Our sales numbers are nowhere near what they were last year, not even close. And we’re in a tough spot, so I can’t imagine anything other than that.”
With the Austin Convention Center closing for redevelopment, SXSW is no longer tied to a building that once served as a center for events. Instead, programming is spread across downtown hotels, venues and event spaces.
SXSW is one of the city’s signature events, attracting crowds from all over the world. For decades, it has boosted many downtown area businesses — whether hosting events or simply welcoming extra traffic.
But this year hasn’t turned out the way some expected.
Austin restaurants, stores report lower traffic during SXSW
David Dreyfus’ family has long owned Le Café Crêpe, a small café and restaurant at the corner of East Second Street and San Jacinto Avenue.
The cafe is less than a block from the former convention center and often sees heavy foot traffic from SXSW. It had always been a big moneymaker, but that stopped this year, Dreyfus said.
“We’ve definitely felt the pinch since the convention center disappeared,” said Dreyfus, the hotel’s general manager. “This corner used to be blocked off from SXSW going directly to the convention center. That kind of foot traffic helps sales, but that’s no longer the case this year.”
As attendees were more spread out this year than in previous years, foot traffic was reduced.
Film and television badge holders still largely dominate North Congress Avenue. Music attendees were also spread out across downtown venues, albeit relatively unchanged from a few years ago. Innovation Track badge holders, however, travel between multiple hotels and event venues to attend featured conferences and expos.
Gus Baldwin and The Sketch perform at the Cherries Wheels Mini Ramp Skate Jam at House Park on Sunday. (Sarah Deakins/Austin American-Statesman)
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Even for businesses along North Congress Avenue, where several large events and SXSW’s block party are taking place, traffic is still different than in years past.
The Hideout Cafe, located inside The Hideout Theater at 617 N. Congress Ave., has been a heavily trafficked SXSW location for nearly 30 years, Dunn said.
The space welcomes attendees looking for a cup of coffee on their way to conferences and film premieres, and has served as an event and event venue for many years.
“This year is not good, it’s not like it was before,” Dunn said, adding that sales were down more than 30% from last year.
She described the overall feel of this year’s festival as “weird” and said she’d seen few people from the innovation circuit in the coffee shop over the past few days.
“This year we saw downtown, but I really didn’t see any innovative people this year,” Dunn said. “These are the people who are missing. They have money to spend at the front of SXSW compared to the younger spring break or music crowds later in the week. This year it’s just, it’s so weird.”
Some Austin businesses still see SXSW impact
Victoria Newton, a sales associate at Prima Dora, a gift and souvenir shop in South Congress, described “an overwhelming amount of traffic,” although customers tend to crowd the store even on non-SXSW weekends.
“Sometimes, a typical weekend can be a little busy,” Newton said. “I think there’s a lot going on downtown, like a lot of other things going on, they just don’t really show because we usually have a lot of people every weekend. But, you can see on the street, if you look further down at Congress, it’s completely crowded.”
“I think we were just expecting a little more,” Newton added, but noted the store is still seeing people coming in from all over the country.
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But the incident isn’t doom and gloom for downtown businesses.
Vico Puentes, whose new TOMO mags store opened about three months ago, said SXSW helped bring his store into the public eye.
Puentes said he sees a lot of locals flocking to the store off East Fifth Street, which is next door to SXSW music venue Antone’s Nightclub and on a street with several events.
“It’s beneficial for us to get that extra touch when people have to move from point A to point B,” Puentes said. “We keep seeing repeat customers throughout the week, so in my opinion SXSW gives us a positive boost.”
A Zoox fully autonomous robot taxi was on display at the Line Hotel on Saturday. / Some downtown businesses said the more dispersed holiday crowds affected foot traffic this year, but hotel occupancy rates were high. (Jay Jenner/Austin American-Statesman)
Austin hotels still packed for SXSW
Arrive Austin, a boutique hotel on East Sixth Street, said the shorter festival this year appears to coincide with an increase in occupancy. Jim Zito, vice president of sales and marketing for hotel operator Palisociety, said the team is reporting busier activity at its hotels this year.
“Overall, they feel like the city is a little slower than in previous years. It’s not as busy,” Zito said. “However, for us, for our particular hotel, I think the reduction in days – we’re actually doing pretty well. We’re busier than we’ve been in previous years.”
Beverly Magee, Four Seasons regional vice president and general manager, said the luxury hotel tends to see a “significant increase” in hotel occupancy and patronage of its restaurants and bars during SXSW.
“Over the years, our lawn overlooking Lady Bird Lake has become a favorite bar for conference attendees, who can soak up the Austin sunshine, sip a cocktail and listen to live music between meetings,” Magee said.
The hotel on San Jacinto Boulevard opened in 1986, the year before SXSW debuted, and the event focused on music as a way for students to support the venue while they were out of town during spring break.
“We are honored to have such a rich history in Austin and honored to grow with SXSW’s various developments,” said Magee.
The Hotel Van Zandt on Rainey Street also reported high activity during the holiday season.
“SXSW continues to be a huge week for VanZant Hotels, and this year we’re seeing great engagement from across the property,” Nick Yezierski, general manager of VanZant Hotels at Sage Hospitality Group, said in a statement. “While SXSW continues to evolve, it still brings incredible creativity to Austin and the Rainey Street community.”
Like the city of Austin itself, SXSW has grown over the years.
Many attendees, both tourists and locals, said on social media and around town that despite the changes, this year’s festival remains one of the best since the COVID-19 pandemic forced its cancellation in 2020.
Still, many businesses that rely on March revenue to get them through the slower summer months are entering a difficult season.
“Many businesses here are struggling and we are very saddened by the loss of the convention center,” Dreyfus said. “We’re just trying to get through this and hopefully SXSW will be back here soon.”
