DNC's economic impact for Charlotte, N.C. totals almost $164 million

01/29/2013 6:10 AM

04/29/2013 2:45 PM

September’s Democratic National Convention injected $91 million in new spending into the local economy, for a total economic impact of nearly $164 million, according to a consultant’s report released Monday.

The three-day DNC was the city’s largest convention and its most lucrative, local leaders said during a news conference Monday. More than one in five dollars poured into the local economy came from the federal government, through a security grant.

“This is the most direct spending in the history of Charlotte,” said Tom Murray, chief executive of the Charlotte Regional Visitors Authority.

The visitors group, along with the city of Charlotte and three other groups, hired Tourism Economics to conduct a detailed study of the convention’s dollars. The decision to hire an outside consultant for $25,000 came after the Visitors Authority’s past estimates of economic impact for conventions were found to be wildly inflated.

Tourism Economics said it tried to be conservative in how it calculated visitor spending.

It aimed to determine the amount of money lost because of people staying away from the city during the DNC. It estimated local businesses lost $7.3 million because of the DNC. In determining an economic impact of nearly $164 million, it said it accounted for the fact that much of the hotel industry’s profits didn’t stay in Charlotte.

“Marriott’s profits are going to Maryland,” said Adam Sacks of Tourism Economics.

The economic impact number accounts for more money rippling through the local economy. If a bar sells more beer during the convention, for instance, a beer supplier will also make more money.

The final estimate of $163.6 million is smaller than some previous estimates from host cities. Sacks said it’s possible the actual number could be higher.

In Denver, convention boosters said the 2008 DNC had a total economic impact of $266 million.

Hotels gain the most

Hotels were the biggest beneficiary of the DNC.

The consultant said area hotels booked 61,246 hotel room nights for the DNC, generating $20.9 million in revenue. September was the local hotel industry’s best month in at least four years. Tax revenue for hotels was up more than 80 percent compared to September 2011.

For context, events tied to the Charlotte Convention Center usually book about 150,000 hotel room nights in an entire year. Visitors for the CIAA basketball tournament usually buy about 45,000 of those hotel room nights.

The next biggest category of spending was nearly $20 million. That mostly accounts for equipment bought for the Charlotte-Mecklenburg Police, as well as overtime paid for officers. The city received a $50 million federal security grant, but the consultant said $30 million of that money left the Charlotte area.

Tourism Economics estimated DNC visitors spent $5.7 million on food and beverage and $5.3 million on ground transportation.

City leaders said the report showed that the DNC was worth it for the city financially. Mayor Anthony Foxx said the city should try for other events, including the Republican National Convention in 2016 and the Super Bowl. He also mentioned that Charlotte could one day host the Olympics.

Bob Morgan, president of the Charlotte Chamber, said the city received valuable exposure.

“Name a network and they were here,” Morgan said. “Charlotte was the story.”

Tax revenue brought in

Though Tourism Economics said it was conservative in tallying how much DNC visitors spent, the group was more generous in estimating how much new tax revenue was generated from the event.

The study said the state received $1.7 million in sales taxes from the DNC. Local governments received $2.2 million in new sales taxes, including the special hospitality tax on hotel and motel rooms.

But the study also assumed local governments received $1.9 million in new property taxes from DNC spending.

The DNC did not create new property that was taxed, at least not at a rate of $1.9 million. Instead, the consultant said, that number was created by estimating the total economic activity from the convention as a share of the region’s total tax base.

Tourism Economics said the DNC spending supported nearly 1,500 jobs. But Sacks acknowledged in an interview those jobs would not disappear this year because there is no political convention in Charlotte.

Tourism Economics said 35,000 people attended the convention, including 15,000 media. Those were the estimates for attendance used before the convention.

The consultant didn’t ask the DNC host committee to count the credentials issued to delegates and media to get an exact number. Republican City Council member Warren Cooksey asked whether a more accurate head count would have produced more accurate spending estimates.

Sacks said Tourism Economics was confident the estimates were correct, based on the number of hotel rooms used.

The report was paid for by the city of Charlotte, Center City Partners, the Charlotte Chamber, the Charlotte Regional Visitors Authority and the Charlotte Regional Partnership.

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