For Phila. business, more realistic convention expectations

A party mascot waits for his ride after greeting Democratic officials at the National Constitution Center on the final day of their visit to Philadelphia. TOM GRALISH / Staff Photographer
A party mascot waits for his ride after greeting Democratic officials at the National Constitution Center on the final day of their visit to Philadelphia. TOM GRALISH / Staff Photographer
Posted: August 18, 2014

Ask Frank Olivieri at Pat's King of Steaks whether it's worth the money and the effort to bring the Democratic National Convention to Philadelphia in 2016, and he'll deliver a resounding yes.

"I think it's amazing for Philadelphia," he said.

It was amazing for Pat's in 2000 when the Republicans held their convention here.

"Business was up 25 percent," Olivieri said. Besides increased sidewalk traffic, he landed lucrative catering gigs, which is why he was more than willing to feed the Democrats' site selection committee - gratis - when it stopped by his iconic restaurant Wednesday.

Good for Pat's. But as fund-raisers prepare to hit up local and national businesses and philanthropists to raise an estimated $80 million needed to host the convention, here's the question for the rest of us:

Is it worth it?

Considering the expense, will the region get enough economic bang for the tens of millions of bucks it will spend?

So far, the consensus seems to be yes - for hotels, for brand image, for event planners, and as an endorsement for the city's recovering convention business.

"It focuses a light on the city," said Mayor Nutter, who foresees a harvest of jobs, tax revenue, and great publicity.

"All those shots of the city - you can't buy that kind of media attention and presence," he said

But it comes with a caveat: The city has to apply the lessons learned when the Republicans came to town.

"We learned we had to manage expectations," said Meryl Levitz, chief executive of the Greater Philadelphia Tourism Marketing Corp., now known as Visit Philadelphia.

Any evaluation has to look at two major categories. More immediate is the short-term benefit - the dollars spent to produce the convention, the money spent by attendees during the event, along with related wages, taxes, and spin-off spending.

In 2000, local convention officials estimated that benefit at $345 million.

More difficult to measure is the long-term marketing benefit.

In 2000, Levitz said, her organization prepared briefing books for the press - and along the way, collected thousands of journalists' names and contact information, even e-mail addresses, at a time when the Internet was new.

That helped in 2001, when the nation's hospitality industry collapsed after the Sept. 11 attacks. Philadelphia, she said, was able to recover more quickly because a huge potential market of tourists could visit, traveling by train, bus, and auto.

'Absolutely'

Having those press contacts helped tell that story, she said, and sell the "Philly's More Fun When You Sleep Over" campaign.

These days, Levitz said, the convention offers an opportunity to turn online relationships with reporters into personal ones.

If the Democrats choose Philadelphia and make their decision within the next six months - as promised - the Convention Center would get an immediate marketing boost, said its chief executive, John McNichol.

True, the Wells Fargo Center would host the main events, but there would be plenty of others at the Convention Center, which recently instituted changes in management and union work rules.

For the Convention Center, beleaguered by its past reputation for inefficient and costly operations, a decision from the Democrats and their sophisticated event planners would certify to others in the convention business that needed changes have taken place.

"It will absolutely be part of our narrative," McNichol said.

But expectations can be hard to meet.

In the hyperventilated atmosphere leading up to the 2000 convention, many expected a business windfall when the GOP was in town.

Some were blown away by the amount of business. Others did not even feel a breeze.

What they didn't know - and learned the hard way - is that delegates have days packed with convention business and nights packed with receptions, often at their hotels. They can eat and drink free.

Also, because of Philadelphia's location, businesses and lobbyists based in New York or Washington were able to truck in their regular caterers for the GOP's convention functions, cutting the locals out.

If the Democrats do convene here in 2016, hotel catering operations will thrive, and prime spots for parties - the Philadelphia Museum of Art, the Constitution Center - will be fully booked, along with the caterers attached to them.

Some restaurants will land parties. Most won't - and should not expect to, which is Levitz's point.

"We wished we hadn't overbought lobster and caviar" in 2000, restaurant consultant Ed Doherty said. Then the manager of Devon Seafood Grill on Rittenhouse Square, Doherty expected a lot of business.

But then Nancy Reagan hosted a party in the square, and the Secret Service blocked off his street.

"What we thought was going to be a year-making event turned out to be a disappointment," he said.

Lessons learned

Even the hoteliers, who snagged the biggest share of the immediate GOP convention business in 2000, have learned lessons they will apply if Philadelphia hosts the Democrats.

In 2000, GOP convention attendees spent $24.9 million to pay for 111,072 nights in hotels in Philadelphia, the Pennsylvania suburbs, South Jersey, and Delaware, according to a report generated by the Philadelphia Convention and Visitors Bureau.

On the busiest night, 95 percent of the region's rooms were booked, compared with 82 percent the previous year, the report said.

More significant, those rooms, rented in midsummer - traditionally a slow period for hotels, commanded top dollar. The average room rate jumped to $134.47 a night while the GOP was in town, compared with $86.44 during the same period in 1999.

But the Republican National Committee's convention organizers demanded that hotels - even distant ones - hold back most of their rooms to wait for convention reservations.

"By the time RNC released those rooms, [the hotels] weren't able to pick up the slack," said Warren Marr, a managing director in the Philadelphia office of the accounting firm PricewaterhouseCoopers specializing in the hospitality business.

Not this time

The city's hotel community, said Jack Ferguson, head of the Philadelphia Convention and Visitors Bureau, won't agree to block as many rooms for as long.

In 2000, the then-executive director of Cliveden, a lovely Colonial-era mansion in Germantown, took a nervous breath, bet on the Republicans, and turned away wedding receptions during the convention.

"As I'd suspected . . . the 2000 Republican convention brought no business to Cliveden," said current director David Young. "Conventioneers could not be pried away from their own hotels or Center City enclaves."

Young said he would be happy to participate in any event that would bring convention visitors to Cliveden and Germantown.

But, he said, "we will not turn away wedding business in August."


jvonbergen@phillynews.com

215-854-2769

@JaneVonBergen

www.inquirer.com/jobbing

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