Did the DNC really bring in $230 million to Philly?
Almost eight months after the Democrats brought their big political party to Philadelphia last summer, the numbers are in: According to the city’s Convention and Visitors Bureau, the Democratic National Convention brought in $230.9 million to the five-county region.
While it’s about $120 million short of what the Democratic National Convention Committee and former Mayor Michael Nutter initially projected, some economists say it’s likely an exaggeration of the DNC’s economic benefits.
“To me, that $230 million figure is a little inflated,” said David Fiorenza, an economics professor at Villanova University’s School of Business.
City tourism officials say the number represents the event’s “total economic impact” on Philadelphia, which factors in the $132.9 million spent directly by about 50,000 visitors to the city and four suburban counties.
“That’s your taxi cab ride from the airport, if you decide to see a cultural attraction and you buy a ticket, or you buy your child a trinket at the airport before you leave — all of that is considered direct spend,” said Julie Coker Graham, president of Philadelphia’s Convention and Visitors Bureau.
However, it also encompasses some fuzzier figures: about $100 million in “indirect and induced spending,” which is the business generated by vendors, such as caterers, buying goods and services, and the money spent by those vendors’ employees.
Rob Baumann, an economics professor at College of the Holy Cross in Massachusetts, has studied the impact of political conventions on their host cities and has found cities tend to overstate the benefits.
“I don’t think there’s any way this would have been an economic loser because at the end of the day, you had out-of-towners coming in an spending money,” he said. “It’s just that the numbers that we find tend to be inflated because they don’t take into account the economic activity that would have happened if the event wasn’t there at all.”
Graham said the PHLCVB’s analysis, performed by the firm Tourism Economics, took displacement of other events that typically would have taken place into account.
But Fiorenza and Baumann say there are other figures are worth paying attention to, such as tax revenue.
According to the PHLCBV’s report, the DNC brought in $11.1 million in local and state taxes. Statistics provided by the Philadelphia controller’s office show, for example, revenue from the city’s liquor-by-the-drink tax was up 35 percent in August (which reflects spending that would have taken place during the convention in July) from the same month in the prior year; wage tax collections were up 27.6 percent and hotel taxes, 66 percent.
“We can attribute that to these events,” said controller spokesman Brian Dries.
In the long term, Baumann said the region will continue to benefit from “all the publicity that Philadelphia got by basically being in the news spotlight for the week.”
The 20,000 journalists in town for the convention put out tweets, photos, videos and stories mentioning the city to more than 26 million people around the world, according to PHLCVB’s analysis.
Although, Baumann pointed out, that doesn’t guarantee there’ll be more tourists lining up to see the Liberty Bell this summer.
“Unfortunately, that’s the stuff that’s really hard to identify,” he said. “How can you attribute somebody visiting Philadelphia a year or two years later specifically to the convention?”
Correction: This story has been updated to reflect that it was the Democratic National Convention Committee, not Philadelphia tourism officials, that initially projected the DNC would generate $350 million.
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