It's inevitable that each year, all the hotels sell out within a certain radius of the SXSW location (the Austin Convention center). If you run into this problem, here's a little hack that might save the day.
Austin recently added a nice 2 car light rail option known as the Capital Metro Rail. This just so happens to stop right outside the Austin Convention Center and also has a greatly extended timetable during SXSW. There are nice (Westin) and decent (La Quinta) hotels within walking distance at several of the stops on the line.
This is a list of the stops on the line. Punch the address for a station into Google Maps and search nearby for hotels. The example I've provided below, using the Kramer station address, stops right next to The Domain complex which has several hotels within walking distance.
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