Convention Payoff May Fall Short

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.

“There are so many factors going on at the same time, it’s very hard to say any one thing is responsible,” said Skip Hull, an economist with San Diego-based CIC Research Inc.

Rich Carollo, research director for the Chicago Convention and Tourism Bureau, said his city received good publicity from hosting the 1996 event but only a modest economic payoff: “It certainly wasn’t one of our top 10 or even one of our top 15 events in ’96.”

Many economic development experts say that while a city such as Philadelphia receives important free publicity from being host to the Republican convention, Southern California already gets plenty of national exposure as the home to everything from the Academy Awards to Disneyland.

“I can’t picture someone sitting at home, and after seeing the convention on television, saying, ‘Doggone it, I want to go to L.A.!”’ said Dean Baim, a sports economist at Pepperdine University who has studied the effects of increased national awareness on economic development.

Even the immediate economic impact of the convention, during the days when the politicos and journalists are in town, is a mixed bag.

Some local businesses do, in fact, expect more trade. Caterers could benefit the most.

Brian Lillie, president of Party Staff Inc., which provides events with cooks, waiters and service staff, is delighted. “Usually July and August are our slowest months, but we’ve been sold out for a couple of weeks now. We’re even tapping into our San Diego and Orange county offices for people, but we’ve had to notify clients that we’re just maxed out,” Lillie said.

Both Candolyn’s beauty salons downtown were booked nearly solid for convention week well in advance. Shota Sigua, manager of both salons, predicted “a good week, financial-wise”--if he doesn’t have to shut down because of convention-related tumult.

But other downtown firms say that they will lose money, either because they have to close during convention week or because customers will be scared away. By one estimate, downtown jewelry merchants will forfeit more than $30 million in sales during convention week, although much of that business could be made up later.

At Los Angeles Parking Service, which provides valet service for downtown and Westside restaurants, early indications are disappointing. “We were expecting our business to increase a lot, and so far, we’ve had no increase whatsoever. . . . Where is the business going? Don’t ask me,” said Marco Suarez, the company’s general manager.

For Southern California’s major tourist attractions, the Democratic convention “is going to have, at best, no impact,” said Bob Ochsner, a spokesman for Knott’s Berry Farm in Buena Park, who surveyed the region’s tourist draws and convention bureaus.

Ochsner said the convention-goers are “an entirely different audience” from the kinds of families that are Knott’s target market. As a result, the major tourist attractions generally aren’t offering special programs or doing special advertising to draw them.

“We as a group, including Knott’s, are actually trying to ignore the whole thing,” he said.

It’s even possible that the amusement parks and related attractions could lose a bit of business, if some vacationers avoid Southern California to dodge this month’s extra congestion.

There’s a precedent for that type of temporary slowdown: the 1984 Olympics in Los Angeles, which brought the city lots of favorable attention but cut into business at places such as Disneyland and Universal Studios Hollywood. Likewise, although San Diego’s tourism industry has thrived in recent years, it slowed during the 1996 Republican convention.

In addition, the fact that some businesses prosper from the convention doesn’t mean that Los Angeles prospers much. Baim pointed out that much of the profit goes to hotel and restaurant chains based in other cities.

Compared with political gatherings, ordinary business conventions are far more predictable as economic ventures. “They bring in people with money, and they don’t place burdens” on a community Raabe said.

Perhaps the most dramatic civic public relations disaster in recent decades was the 1968 Chicago Democratic convention, still remembered for the brutal police suppression of political protesters.

“Look how long it took Chicago to dig itself out after 1968. A morale problem kept them from trying [for another national political convention] for almost 30 years,” Raabe said.

“If I had a choice” Raabe added, “I’d go with a trade or an industry group, where people have big expense accounts.”

*

Times staff writers Shawn Hubler and E. Scott Reckard, and special correspondent Stephen Gregory, contributed to this story.

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Ranking the Conventions

The Democratic National Convention won’t be the biggest convention in Los Angeles this year in terms of attendance. However, because of the large number of out-of-towners attending, it is expected to account for the largest number of “room rights”* or hotel stays.