DNC convention spending in Philly falls tens of millions short of projections

The delegates gone, Nick Narducci, with the Center City District, removes one of the Democratic National Convention banners on Logan Square August 3, 2016. Flag at right is South Africa.

They came, they partied, and they politicked, but in the end, the Democrats didn’t generate as big an economic boost as promised during their national convention in Philadelphia in July – falling short by tens of millions of dollars.

The convention generated $230.9 million in total economic impact, the Philadelphia Convention and Visitors Bureau reported Wednesday at its annual Business Report Meeting at the Convention Center.

That’s nearly $120 million less than the $350 million projected in October 2015 by the Rev. Leah Daughtry, the convention's chief executive, representing the party in Philadelphia. The projection also falls $20 million to $70 million short of a revised projection of $250 million to $300 million generated later by the Philadephia 2016 Host Committee.

Lauren Hitt, Mayor Kenney's spokeswoman, focused on the positive. "There’s no question that Philadelphia, thanks in large part to our first responders and other partners like [the visitors bureau], shined in the international spotlight last summer," she said. "That publicity will certainly translate into economic gains that wouldn’t have otherwise occurred."

Convention economic projections are inexact, said Ira Rosen, an assistant professor at Temple University's School of Sport, Tourism and Hospitality Management.

Indeed, a month before the convention, David Fiorenza, an economics instructor at Villanova University, pegged the convention's economic impact at just $130 million.

But, economic impact isn't everything. "The positive social impact is pretty significant," Rosen said.  

"If you conduct a major international event of this scope very successfully, it has an ongoing impact into the future and on the ability to attract large events like the NFL Draft," he said. "It shows that the city is well-run and knows how to pull off a major event."

The DNC convention generated $132.9 million in direct convention-related spending, $11.1 million in local and state taxes, and $95.8 million in labor income. It's not clear from the report why the three figures added together exceed the total economic impact. 

The convention drew 5,783 attendees and 29,000 other visitors. The 19,250 members of the international and national media produced 26.2 million "media impressions," the report said. All together, convention guests spent 80,400 nights in local hotel rooms and booked 6,600 nights via Airbnb.

The convention contributed to a record-breaking year for Center City hotels, the bureau reported, with 78 percent hotel occupancy and guests paying an average daily rate $191 per room in 2016. Total hotel-room revenue rose from $502 million in 2012 to $608 million in 2016, up 7.3 percent.      

"The meetings and convention industry is an economic engine," Kenney told several hundred people gathered at the Convention Center to hear the report. Kenney praised the bureau, the Convention Center's unions, and the center's management. "When you have a great labor and management relationship, you can accomplish anything." 

Speaking to the group, Roger Dow, chief executive of the U.S. Travel Association, echoed the mayor's sentiments. Philadelphia always had a mixed reputation -- the beauty and walkability of the city offset by the convention center's reputation for high labor costs and poor management. Those problems have mostly been resolved.

Philadelphia is "one of the great stories in America," Dow said.