Milwaukee’s hotels and restaurants would benefit from RNC visitors, despite community concerns

While the mayor and Milwaukee political leaders have welcomed the possibility of hosting the 2024 Republican National Convention, a group of liberal community groups from across the state has decried the effort.

The coalition includes Voces de la Frontera Action, Never Again is Now, SEIU Wisconsin State Council, Freedom Action Now and Black Leaders Organizing Communities. The groups issued a statement on June 2 , 2022, urging Milwaukee Mayor Cavalier Johnson not to seek the convention. 

The statement listed a series of disadvantages to the convention, including this claim:

"Milwaukee’s hotels and restaurants are already filled during the summer. The RNC convention will simply replace those who normally visit our city."

Is that accurate?

VISIT Milwaukee, the city’s convention and visitors bureau, spearheaded the bid for the 2024 RNC and has noted that winning it would put Milwaukee in the national spotlight and elevate the city as a convention destination.

According to VISIT Milwaukee, the city should anticipate visitors reaching about 45,000 during the convention – a figure that includes 2,551 delegates, plus family members, media, operations personnel and more.

A spokesperson said the city will need to secure 16,000 rooms for the convention. (For the 2020 Democratic National Convention, which mainly went virtual due to COVID, local organizers were able to secure 17,000 rooms.) 

Peggy Williams-Smith, president and CEO of VISIT Milwaukee told WISN-TV in a March 22, 2022 report that there are roughly 19,000 hotel rooms in the City of Milwaukee.

The main argument by the liberal groups is that during the convention period, these hotel rooms are typically already booked solid anyway. Therefore, the convention itself would create a substitution effect and not really bring new people – and their money — to the city.

We’ll set aside the fact that it is a major part of VISIT Milwaukee’s job to fill those very rooms (by bringing conventions to town and promoting Milwaukee as a tourist destination), and zero in on the numbers.

If Milwaukee wins the bid, the convention could be held during one of three proposed windows: from July 9 to July 25, from Aug. 13 to Aug. 29, or from Aug. 20 to Sept. 5.

During the same time periods in two recent years from before the pandemic, 2017 and 2018, occupancy rates hovered around 76% and 77% — with rooms costing anywhere between $140 and $175 per night, according to data from VISIT Milwaukee. 

So, the groups are off on that point. As envisioned, the RNC would fill the rooms entirely.

Much like the overall $200 million "economic infusion" expected if Milwaukee wins the bid, VISIT Milwaukee based total hotel room revenue projections on a study by Cleveland State University on the economic impact of the 2016 RNC in Cleveland.

In Cleveland, the hotel occupancy rate went up 20.2% because of the convention, according to the study, and hotels had an average nightly rate at $290.

VISIT Milwaukee has estimated a total economic impact of $200 million from the convention (we rated a claim from the mayor about the size of the impact Half True). Williams-Smith now says hotel revenue alone could tally $23.2 million over the five days – a much smaller figure than the $32 million estimate she provided for that earlier item.

Victor Matheson, an economics professor at the College of the Holy Cross in Worcester, Massachusetts, who has studied the economic impact on cities that hosted the Republican and Democratic national conventions between 1970 and 2004, said it is important to note that some of the rooms would be full with or without the convention.

"Every hotel room is full and it’s full of delegates," Matheson said of estimates of the economic impact. "This has a huge economic impact, but they forget to note that even if the RNC wasn’t in town, hotels are typically at 60% or 70% occupancy anyway. So they assume that those hotel rooms that are full of delegates would have been completely empty in the absence of the event. But of course we know that’s not true."

In any case, for purposes of this check, we are mainly interested in how full the rooms are – and all agree that they would not otherwise be at capacity during a typical week in August.

So on the hotel side of the equation, the groups opposing the RNC are overstating their claim.

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The impact on restaurants is similar, but more anecdotal. According to the study of the 2016 Cleveland RNC, restaurants there saw much success and many visitors.

The Cleveland study, which was carried out by a four-person team at Cleveland State University’s Center for Economic Development, conducted two case studies of restaurants in the Cleveland area – both reported that they thrived during the convention.

As with hotel rooms, though, some of that business would be there with or without a convention. And the report did not mention how many diners were local residents versus conventiongoers.

"Hotel bars are going to do well," Matheson told PolitiFact Wisconsin. "If you’re a server and a hotel bar, your tips are likely to be pretty good."

While restaurants, bars and hotels may fare well during a megaevent such as a national political convention, safety concerns due to potential protests and heightened security may "dissuade casual shoppers and diners and result in major disruptions for local residents," according to the study of past conventions.

One example cited in the study was that during the 2004 RNC in New York City, attendance at Broadway shows fell more than 20% compared with the same week a year prior despite the influx of thousands of visitors attending the convention.

"Anyone in their right mind who works in and around downtown Milwaukee is going to take that week off," said Matheson. "They’re not going to go to their usual happy hour place."

Liberal groups opposing the 2024 RNC in Milwaukee claimed: "Milwaukee’s hotels and restaurants are already filled during the summer. The RNC convention will simply replace those who normally visit our city."

The groups have a point, in that the baseline is not zero. There are visitors who stay at hotels, and diners who eat at restaurants with or without a convention. But they vastly overstate the point by suggesting there would be no increase or benefit at all from the RNC.

Statistics have shown a typical Milwaukee hotel occupancy rate of about 76% in August. And clearly all restaurants are not 100% full either. So there clearly would be some economic benefit to bringing the event to the city, even considering the substitution effect.

Our definition for Mostly False is "The statement contains an element of truth but ignores critical facts that would give a different impression."

That fits here.