With millions of dollars in potential economic impact at stake, Mayor Ron Nirenberg has initiated a process to evaluate the costs and benefits of hosting the 2020 Republican National Convention (RNC) ahead of submitting a proposal.
San Antonio is among several cities Republican party officials are considering for the high-profile meeting. On April 23, Nirenberg sent a memo to City Council members and City staff, including City Manager Sheryl Sculley, stating the City had been encouraged to submit a proposal to host the 2020 GOP convention.
But on Wednesday, Brad Parscale, President Donald Trump’s campaign manager, criticized Nirenberg for what he called an “epic political mistake” in not aggressively pursuing a bid.
“This in my opinion is a big mistake, because San Antonio has a great chance to win. This chance might not come again for decades,” Parscale wrote in an email to Nirenberg.
National political conventions can pay off in massive media exposure, hotel and sales tax revenues, and millions in federal funding, but the upfront costs for a city are considerable.
The U.S. Travel Association estimated that the 2016 RNC in Cleveland and the Democratic National Convention (DNC) in Philadelphia would yield a total of $360 million in direct spending, roughly half in each city. When Dallas was rumored to be in the running for the 2016 RNC, Texas Public Radio reported that then-Republican Party of Texas Chairman Steve Munisteri said the economic impact for that city would be around one-quarter of a billion dollars, and compared it to winning the host bid for the Olympics.
But with victory comes sacrifice. During a $64 million fundraising campaign to finance the 2016 RNC, the City of Cleveland pledged a $2.5 million cash donation, Cuyahoga County another $2.5 million, and the State of Ohio $10 million.
About 50,000 attended that convention, where Trump won the nomination. Spending by those visitors, along with the government and corporate spending to underwrite the event, ultimately contributed to an overall economic impact of 855 direct jobs, an associated $27.6 million in labor income, and $41.1 million in output, according to a study published by Cleveland State University.
Hotel occupancy in Cleveland during the week of the convention jumped 20 percent higher than the same time the previous year, with rates averaging $143 a night.
San Antonio has more than 14,000 room nights in its Central Business District, and more than 46,000 in the broader San Antonio market. “At the end of the day, that’s a lot of room nights,” said Kevin Latone, general manager of the Wyndham San Antonio Riverwalk, especially during the back-to-school months when leisure travel slows.
A convention during that time would be a bonus, and a serendipitous one at that, he said, as most large conventions are booked seven to 10 years out.
A calendar for the Henry B. González Convention Center shows meetings and events booked through October 2019.
“It’s unusual for a large event like this to surface in the short term,” Latone said. “So this would be something we should be embracing and doing anything and everything to bring this business to our community. There’s not going to be another group coming in that comes close to having this type of economic impact.
“Speaking as a hotelier, we should be looking at this as any piece of business without looking at this through the lens of what group it is. Perhaps that’s something that has gotten in the way.”
A convention the size of the RNC couldn’t come at a better time, said Liza Barratachea, president and CEO of the San Antonio Hotel and Lodging Association.
“We knew 2018 was going to be a good year for us,” Barratachea said, referring to the NCAA Men’s Final Four and the city’s Tricentennial Commemorative Week events. “We know that 2019 and 2020 are going to be soft years for us … the impact of a convention of this magnitude would be tremendous for our industry and our community,” especially given the city’s reliance on revenues from the hotel occupancy tax.
“The hotel occupancy tax has afforded us a lot of wonderful things,” Barratachea said. “[But] looking out at 2019 and ’20, the hotel occupancy tax is going to be depressed, and this would be a huge boost to that engine.
“In addition to that, the jobs – our industry employs 135,000-plus people, and one in eight people in San Antonio are employed in the tourism and hospitality industry – so for us, there is a great need and demand for us to recruit business, to recruit travel. It would be another Final Four for us.”
The Final Four, held March 30 through April 2, brought 93,000 visitors to San Antonio and delivered a $185 million impact to San Antonio’s economy. It was projected the City would spend $18.4 million on employment, construction, video, and other costs to produce the event.
But 97 million U.S. viewers tuned in for Final Four broadcasts, ratings worth millions of dollars in media exposure for San Antonio. City officials and economic development leaders also used the event as an opportunity to meet with corporate leaders and promote the city.
“The NCAA was specific to a basketball tournament, but the City used it as an economic development opportunity as well,” Latone said. “[The RNC] has the same opportunity for us … having that type of representation, of dignitaries, who can go back to their states and talk about San Antonio, the potential impact of that PR and exposure is immeasurable.”
By some accounts, that is how the City of Cleveland viewed it. Just prior to the 2016 convention there, Ned Hill, professor of economic development and regional planning at Ohio State University, told Next City, “No one with the City of Cleveland leadership could have imagined what was going to happen with the political climate and international terrorism events when they made the pitch to host.
“The thinking at the time was that Cleveland wanted a political convention to get media exposure for some of the successes it was having and to show some of the assets it has that the nation didn’t know about. And the costs to do that weren’t thought of as being too great, and could be dispersed across the whole region.”
One of the major costs to a city hosting a national political convention is offset by a $50 million grant from the federal government to pay for public safety and security, much of which is spent on the salaries of extra police needed to work the convention. But some say security concerns and the “crowding-out effect” of traffic, protesters, and closed roads might drive out locals, who take their wallets with them.
Bexar County Judge Nelson Wolff has said he believes hosting a GOP convention would be an economic boon for the city.
Economists, however, tend to be more skeptical of the large economic impact numbers touted by event organizers.
“Our examination of 18 national political conventions from 1972 to 2004 suggests that the promoters’ rosy economic projections are overstated, and these events have a negligible impact on local economies,” stated a 2008 study by economists at the College of Holy Cross.
“While the conventional wisdom regarding national conventions is that they bring fame and fortune to host cities, our results suggest that any economic benefits are quite elusive. People should view promises of economic windfalls from hosting national political conventions in the same way they should view the campaign promises of the candidates at these very conventions – with skepticism.”
A more recent study out of Holy Cross, “Unconventional Wisdom: Estimating the Economic Impact of the Democratic and Republican National Political Conventions,” which looked at daily hotel occupancy, price, and revenue data from the 2008 and 2012 conventions, found that political conventions generate approximately 29,000 room nights of lodging.
Conventions increase hotel revenue by approximately $20 million on average, the report stated, “a figure which suggests that host cities’ claims of economic impacts of $150 million or more may be implausible.”
The Philadelphia Convention and Visitors Bureau reported that the 2016 DNC generated $230.9 million in total economic impact.
Though that was $120 million less than what the host committee projected early on, the visitors bureau reported that the city’s hotel occupancy rate was at 97.6 percent during the week of the DNC, a 10.3 percent increase over the same time period the year before.
“If we could do it again, we would do it in a second,” said Ed Grose, executive director of the Greater Philadelphia Hotel Association. “It really made our year because of the type of business it was – it really had a lasting impact on total numbers for the year. It also puts your city on the national stage and provides a lot of exposure for your city.”
San Antonio is already slated to play host to the 2018 Republican Party of Texas State Convention on its 150th anniversary. It will be held June 11-16 at the Henry B. González Convention Center.
When the Republican Party of Texas announced the chosen location two years ago, the Bexar County GOP‘s then-Chairman Robert Stovall stated, “It has been 10 years since San Antonio hosted this event. We believe our city will serve as a perfect location to encourage a huge participation from all over Texas, especially our South Texas Republican friends.”
At the 2016 state GOP Convention hosted in Dallas, more than 10,000 delegates gathered for the three-day meeting.
Visit San Antonio spokesman Richard Oliver said 12,000 are expected here for the state convention, making a $6 million impact on the economy.