Industry Insights: All Roads Lead to Hole

The Iconic Venue Fund is undeniably helpful, but we could be doing more to sustain Austin’s live music scene.

Industry Insights explores the inner workings of the greater music industry, and what they mean for artists and fans alike.

Written by Rachel Green

Photo courtesy of Jordan Vonderhaar

On a cool April night in 2023, dozens of twenty-somethings packed into Austin’s staple live music venue Hole in the Wall to see local bands Sad Cell, Party Van, and Die Spitz tear up the main stage at a pajama party-themed concert. A hot, sticky air permeated the main building as audience members standing shoulder-to-shoulder used the little space they had to dance. Since that night, hundreds of acts have graced Hole in the Wall’s two stages, attracting fledgling groupies and seasoned concertgoers alike to the beloved music venue and dive bar nestled on the Drag. The timeless powerhouse of Austin’s live music scene, now with a fresh coat of yellow paint on its front wall to greet patrons, has a new lease on life. 

Current venue owner Will Tanner recently became the first recipient of money from the Iconic Venue Fund, a $15 million grant created to financially support local music venues. This allowed him to sign a new 20-year lease for the Guadalupe Street building. “Hole in the Wall 100% got saved,” Tanner emphasized in a recent interview with the Austin Monitor, citing the fund as the main reason the business gets to keep its doors open for its 50th anniversary on June 15, 2024. 

While the Iconic Venue Fund has impacted the lives of those working and partying at Hole in the Wall already, it should only be considered the first step in a broader campaign of economic support for live music. The laissez-faire, free market approach to arts funding that nearly shut Hole in the Wall down caused many places to close their doors amid pandemic restrictions — the Iconic Venue Fund just couldn’t help everyone. 

The Iconic Venue Fund was a joint effort between city council and the Austin Economic Development Corporation to combat the loss of tourist revenue due to venue closures during the COVID-19 pandemic. City council passed a resolution in December of 2020 that called for reallocation of the Hotel Occupancy Tax funds to benefit venues that promote tourism. The agreement did not automatically save Austin’s iconic music halls, however — it took three years for funds to start being distributed to businesses, with Hole in the Wall being first in line.

Hole in the Wall’s decades-long survival story is one of luck rather than exceptionalism. Mother-son duo Billie and Doug Cugini opened the venue in 1974 and has cemented its place as a Drag mainstay throughout the years. However, it has had its fair share of obstacles. In its nearly 50 years, Hole in the Wall has faced two separate closures, each lasting for only a few months — one occurred in 2002 due to financial troubles, and the second was in 2020 amid pandemic restrictions. The business has been helped out both by the city and the community over the years. In 2002 the bar fundraised to cover their operating expenses — like rent and staff wages — but little success forced them to close their doors. The following year, however, the venue was bought by local business owners Clay and Cashiola McLaughlan who intended to preserve it and bring it back to Austin nightlife. In 2020, however, one of the main reasons that Hole in the Wall remained open was because of an “infusion of cash,” from the city, as Tanner put it in an interview with the Austin-American Statesman. The extra funds only enabled Tanner to add six more months to the lease, and since early 2023, the venue has been renting on a month-to-month basis.

Photo courtesy of David Brendan Hall

While Hole in the Wall was able to stay afloat in 2020, clubs like Barracuda Club found themselves unable to weather the pandemic. Barracuda Club was one of eight locations mentioned in Billboard’s ‘Venues Closing Across America’, which was cited in city council’s resolution and lists venues that were permanently shut mid-pandemic. Of the closures, the resolution recounts that Austin had eight closures, making it “the city with the largest number of closures [in the United States].” As the live music capital of the world, the profound impact of the pandemic on live music venues could have been minimized with proper action.

Barracuda’s failure highlights the fatal flaw in Austin’s live music system. Austin’s live music funding relies far too much on major festivals to drive revenue, whether it be tourism or ticket sales. This overemphasis on the annual festivals in Austin puts clubs under immense pressure. Venues are forced to perform well so they can coast on South By Southwest (SXSW) funds throughout the year due to a lack of funding and support from the city’s government.

Photo courtesy of CBS Austin

The annual springtime festival SXSW, was canceled in 2020 less than a week before the first bands were slated to hit the stage. This meant that clubs like Barracuda had invested in preparing for the festival without any of the payout, causing an unusually high shortage of cash at a time when venues had no way to make it back. Despite the fact that SXSW brings in around $300 million each year, the fate of live music should not lie in the hands of tourists during Austin’s big music festivals. SXSW and Austin City Limits both undoubtedly stimulate the economy by virtue of the sheer number of people that flood into the city to attend. Some of this revenue takes the form of direct patronage to local venues, but this is not enough to sustain Austin’s culture of live music in the long run. 

Clubs could have recovered, or at least sustained themselves, in the early days of the pandemic. The Iconic Venue Fund was proposed in order to compensate venues that faced losses during the pandemic. It would have been exactly the solution many venues needed. A cultural de-emphasis of the arts — as well as government inaction — puts arts funding on the bottom of the priority list. The fact that we are only just now seeing funding being distributed to arts businesses over three years after venues’ initial closures proves that the arts continue to be neglected. 

If city spokespeople insist on calling Austin the “live music capital of the world,” they must begin to treat it that way. The entire live music scene of our city cannot solely rely on festivals and the occasional grant to lucky business owners. Without consistent government funding, artists and arts businesses will continue to teeter on the edge of failure forever.