RNC 2020

RNC backers see an economic windfall for Charlotte. Some experts say it’s complicated.

RNC in charlotte leaves some celebrating and others disappointed

More than 100 speakers, some in favor and some against, addressed Charlotte's city Council on Monday.
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More than 100 speakers, some in favor and some against, addressed Charlotte's city Council on Monday.

Forget red and blue: Most of the arguments in favor of bringing the 2020 Republican National Convention to Charlotte are focused on green.

Among the dozens of speakers Monday at Charlotte City Council’s hearing on whether to back the city’s RNC bid were hotel owners, restaurateurs, cab drivers and business leaders who urged council members to vote yes. They’re counting on a windfall materializing from the tens of thousands of delegates, media members, politicians, lobbyists and protesters expected to descend on the city in two years.

City boosters are also salivating at the prospect of Charlotte taking another turn in the spotlight — with the city’s glassy, growing skyline splashed on national television broadcasts for days on end — just eight years after hosting the 2012 Democratic National Convention.

That gathering generated nearly $164 million in estimated economic impact, including about $91 million in direct spending by visitors and others at the conference, according to a study commissioned afterward.

“There are very few cities in the country that have hosted both events,” said Tom Murray, CEO of the Charlotte Regional Visitors Authority. In the modern era, that list includes Miami Beach, San Francisco and New York City. “For us to host both in 10 years talks about the attractiveness of our market.”

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The Republican National Committee is meeting in Austin, Texas, this week, and Charlotte leaders expect to be formally awarded the convention. The only other location still in the running, Las Vegas, lacks the support of the city or the local tourism group for its bid.

“This is not about politics. It is about demonstrating that Charlotte is a global city, well prepared to successfully host events of this magnitude,” said Bob Morgan, CEO of the Charlotte Chamber, speaking to City Council before the vote. “Like the DNC, which generated $163 million in economic impact, the RNC will have a significant impact on our businesses and provide a stage on which Charlotte can shine.”

But others caution it’s not so simple.

Yes, convention attendees would flood Charlotte (an estimated 48,000 attended the 2016 RNC in Cleveland), many of them with big spending accounts. Economic impact, however, is likely to be focused on the hospitality sector — hotels, restaurants, transportation companies, caterers — and even those benefits can be unevenly spread and must be balanced against the potential of other lost business.

“Money isn’t going to be falling from the sky for everybody,” said Eric Heberlig, a political science professor at UNC Charlotte. “The economic benefits are very concentrated.”

For example, uptown restaurants that rely on foot traffic from weekday workers might find their sales hurt if tens of thousands of Bank of America, Wells Fargo and Duke Energy employees stay home to avoid the security cordon. Business from convention-goers might make up for that, but not necessarily.

“There would be economic activity happening that week anyway, and if some of that is displaced by the convention then the convention is just filling that in,” said Heberlig.

Even though a $164 million impact sounds big (and is, for businesses that benefit), it’s just not that huge compared to the size of the Charlotte region’s overall economy. The Bureau of Economic Analysis estimates that the region’s GDP totaled almost $132 billion in 2012, and the Charlotte region’s GDP rose to $164 billion in 2016, the most recent year available.

Charlotte City Council voted Monday to approve negotiating contracts to host the 2020 Republican National Convention. Observer File Photo

A 2009 study by three economists analyzing conventions from 1970 to 2005 found “no discernible impact on employment, personal income, or personal income per capita in the cities where the events were held.”

The post-2012 study of the DNC’s economic impact in Charlotte, conducted by consultant firm Tourism Economics, tried to take lost business from locals during the convention week into account. It estimated local businesses lost $7.3 million from people staying away from the city during the convention.

Still, on balance, Tourism Economics found the convention benefited many Charlotte-area businesses.

The consultant said area hotels booked 61,246 room nights for the DNC, generating $20.9 million in revenue. Overtime and police equipment purchased for security totaled another $20 million, the biggest category of local impact after hotels. They estimated DNC visitors spent $5.7 million on food and beverage and $5.3 million on ground transportation.

For some council members and RNC opponents, however, no amount of boost to the region’s economy justifies bringing President Donald Trump to Charlotte to celebrate his likely renomination.

They object to policies such as separating migrant children from parents at the U.S.-Mexico border and comments such as Trump’s assertion that “both sides” were to blame for violence between white supremacists and counter-protestors last year in Charlottesville, Va.

“You have to realize at some point that blood money is no good,” said LaWana Mayfield, a Democrat who voted against the RNC on Monday.

Hospitality, travel industry support

Cleveland officials estimated the 2016 RNC generated $110 million in direct spending from visitors and more than $188 million in total economic impact. Some of the clearest beneficiaries were in the hotel industry, who more than doubled their average rates and saw occupancy of 99 percent downtown and 88 percent across the seven-county region during the convention.

Hotel owners and managers were vocal in their support for the RNC on Monday. There are almost 40,000 hotel rooms in the Charlotte region, including 5,285 in uptown.

The local hotel industry has been booming, with investors aggressively building more. After the DNC in 2012, flashy new properties like the Kimpton Tryon Park have opened, while luxury hotels like the Grand Bohemian and Intercontinental are under construction. Almost 1,900 hotel rooms are scheduled to open this year in Charlotte.

Vinay Patel, whose company SREE Hotels owns and operates 11 Charlotte-area hotels, told City Council that the event would be a major boost for local hotels.

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The exterior of the Kimpton Tryon Park Hotel as seen from Church Street. Diedra Laird dlaird@charlotteobserver.com

“Our industry relies on high-profile events, such as the DNC, the CIAA, the PGA Tournament, and yes, the RNC, to promote and highlight our region,” he said.

Other people who expect the 2020 RNC to boost their bottom lines echoed Patel.

“I vote Democrat every year, but I don’t care about that. I just care about the business,” Mamadou Fall, a taxi cab driver, told City Council.

Boosting Charlotte’s image

One of the most-coveted aspects of hosting a political convention is also the hardest to track: The boost to a city’s image, along with the exposure of 15,000 or so credentialed media members camping out in that city for a week and using it as their backdrop.

“There’s no doubt that cities put a lot of effort into advertising themselves,” said Heberlig, the professor, “and this is an unparalleled opportunity for free advertising.”

Cleveland officials said they tracked more than 3,000 news stories “highlighting various aspects of the Cleveland renaissance.” Convention attendees who were surveyed afterward changed the words they would use to describe Cleveland from pejorative terms such as “Rust Belt,” “dull,” “boring” and “dangerous” to terms like “friendly,” “nice,” “clean” and “safe,” officials said.

Charlotte will be hoping for that same kind of boost — maybe gaining enough name recognition to permanently drop the “N.C.” that’s frequently appended after the city’s name. Or Charlotte might forever stop being confused with Charlottesville and Charleston, a hope some speakers expressed at the meeting this week.

Darius Little, an RNC supporter speaking before City Council’s Monday vote, summed it up: “It’s good for Charlotte to show our skyline.”

Portillo: 704-358-5041
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