Why did Cleveland's Republican National Convention numbers fall short of predictions?

Why did Cleveland's Republican National Convention numbers fall short of predictions?

CLEVELAND, OH (WOIO) - The Cleveland Host Committee for the Republican National Convention held in July of 2016, has put out its economic impact numbers and they fall short for what was predicted for the city before the convention.

Before all the red, white and blue rolled into town those the Host Committee was telling the public to expect $200 million in direct spending to the area, but as we found out today that numbers ended up being just $110 million.

This number marks the amount of money people spent coming into the area including hotel, food and entertainment.

This money spent spans a huge area considering not everyone could stay and play in Cleveland alone. It covers seven-county region including Cuyahoga, Lake, Geauga, Lorain, Summit, Medina, and Erie.

In a statement, Destination Cleveland President and CEO David Gilbert appears to hint at why some of the numbers fell short.

"And when you factor in the challenges that we faced from the enhanced tension in the political environment and hype around potential violence, the numbers for the 2016 RNC come in at a level that's on par with events of this nature," he said.

But the numbers are not always as they seem. Berry College Associate Professor of Economics, Lauren Heller studies the impact political conventions can have on a region.

Even before the convention in Cleveland Heller was warning the estimates of economic impact were too high. After looking at the numbers published today Heller feel the numbers are still too high.

"In my first pass of the reports I do not think enough attention is paid to the crowds and congestion as well as the intense security presence associated with political conventions that can crowd out normal activity in the region since hotels, restaurants, and other businesses are not normally empty," he said.

There was a noticeable drop off of normal Clevelanders who stayed away from downtown because of the warnings of protesters and violence. According to Heller it's hard to stack the numbers of convention goes on top of what would have normally been spent.

One of the biggest examples of this she explains comes in the area of hotel rooms.

"For example, the studies point out the increase in hotel rates and occupancy during the days of the convention, which is great. They only seem to compare the average rates and occupancy, however, with the same dates in previous years," explained Heller.

It's tough to compare convention year hotel numbers to previous year numbers when so much in the economy can change from year to year.

"This comparison is problematic for several reasons.  First of all, hotel occupancy/rates/revenue are dependent on a variety of factors which a simple comparison of averages cannot account for," Heller explained. "Like time-varying measures of the host city's unemployment rate, the host city's population, and the national unemployment rate to control for overall macroeconomic conditions."

Keller said the whole process of studying economic impact is not an exact science.

"Social science research in general is tough, because we examine human behavior, which cannot be as easily measured or controlled like rats can be in a traditional experiment, for example," Keller said. "We also have to make lots of assumptions about economic 'multipliers' and other unmeasurables, and the assumptions we make about those multipliers have the potential to widely skew the results. There are also 'unseen' factors affecting economic impact, like what resident Clevelanders would have done with their time and money if the convention hadn't been in town, or what tax dollars would have been spent on if not for convention-related infrastructure improvements, increased security, etc."


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