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CAMPAIGN 2000

Convention Payoff May Fall Short

August 12, 2000|STUART SILVERSTEIN | TIMES STAFF WRITER

It's a local booster's dream. Tens of thousands of visitors flock to Los Angeles for a national convention, bringing a predictable multimillion-dollar burst of extra spending on hotel rooms, restaurant meals, parties and other entertainment.

What's more, it spreads the word across the country that Southern California is back and looking good. A dandy place to visit and spend money.

So is this the inevitable payoff for playing host to the Democratic National Convention? No way.

The convention's boosters are already acknowledging that although many major hotels are filled, room bookings are falling short of predictions.

Local amusement parks expect relatively few convention-goers to visit their attractions. Some tourism industry observers worry that would-be vacationers are being scared off by the prospect of worse-than-usual traffic snarls.

On top of that, many economic impact experts say that the supposedly huge long-term benefits from hosting the convention--backers have said Los Angeles would receive $1 billion in free publicity--are extremely questionable. That's particularly true if the event is marred by violent protests.

All told, serving as the home city for the Democratic convention is a far more dubious economic enterprise than hosting an ordinary business convention. And even if things go well, the Democratic gathering is unlikely to give the local economy as much of an immediate lift as its backers have predicted.

Among the skeptics is William A. Raabe, a business school professor at Samford University in Birmingham, Ala., and a regional economic impact consultant.

"What does Los Angeles stand to gain? Not much," Raabe said. "What does it have to lose? If a bomb goes off or vandalism breaks out, and things get ugly, that's what people will remember . . . and you don't need that."

Jack Kyser, chief economist for the Los Angeles County Economic Development Corp., generally agreed. He said the recent reemergence of political street protests has turned the results of hosting a national political convention into "a crapshoot."

Even convention boosters seem to be playing down the idea of a short-term economic gain from the event. "You don't go after a political convention because of the revenue it generates," said Michael C.R. Collins, executive vice president of the Los Angeles Convention and Visitors Bureau.

An April 1999 study commissioned by the Convention and Visitors Bureau pegged the tangible economic impact of the Democratic convention at $132.5 million, and backers still use that figure.

By any standard, it's a big convention. Between Democratic delegates, alternates, other politicos and journalists, about 35,000 people are expected to attend. Although several Los Angeles conventions this year will draw more people, the Convention and Visitors Bureau says the high percentage of out-of-towners coming for the Democratic gathering means it will bring in more dollars than any other meeting.

But the predicted $132.5 million in revenue doesn't hold up under scrutiny. For one thing, it was based on the assumption that the convention would produce 94,500 "room nights" or hotel stays. As of late this week, however, the Convention and Visitors bureau has cut the projection to 71,500, based on updated reports from local hotels.

From the standpoint of many hotels, the Democrats' timing is lousy. This is August, after all, and hotels probably would be jammed, or close to it, even if the Democrats were not coming to town.

As a result, much of the revenue officially projected to be produced by the convention simply is money that would have come from ordinary tourists--if Democratic delegates and out-of-town reporters had not already booked the rooms.

These days, Collins and other convention enthusiasts point to an array of long-term benefits from being home to the Democratic gathering. If things go smoothly and the city comes out looking good, they argue, Los Angeles' image will be improved in a way that could enhance tourism and other business for years to come.

"People do know L.A., but some people know about L.A. for the wrong reasons," said Ben Austin, spokesman for L.A. Convention 2000, the city's host committee. "Over the past decade, we've endured riots, flood, an economic recession and high-profile trials."

"This is our opportunity," he said, "to change the national conversation about us."

On top of that, boosters say, the relationships cultivated among local businesses, local politicians and Democratic officials could translate into business deals and government funding in years to come.

What happened to previous host cities? San Diego, the locale for the 1996 Republican convention, and Chicago, the site of that year's Democratic conclave, have enjoyed tourism and economic booms in the years since. Even so, given the nation's booming economy, it's unclear how much of the upturn actually resulted from the conventions.

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