Every year a festival is held when the cherry blossoms are at their best.
Literal
Every-year, cherry-blossoms [subject-が] best-viewing time [at-に] festival [subject-が] is-held.
見頃 ('best viewing time,' 'peak') — 見 ('see') + 頃 ('around the time') — applied to sakura, foliage, or other natural sights. 催される is the passive of 催す ('to hold, to sponsor [an event]'), more formal than 行う.