In The News

Philadelphia hospitality industry’s $500 million summer


Published: Aug 17, 2016

Industry News Travel & Tourism

By Kenneth Hilario Reporter

Philadelphia Business Journal

Philadelphia's hospitality industry had a gangbusters summer this year. A $500 million summer, that is, due in part to the Democratic National Convention and a hefty convention calendar.

The DNC, eight citywide conventions and major sporting events have contributed to what officials in Philadelphia's hospitality industry are calling a blockbuster summer, including increases in both hotel occupancy and revenue per available room, increased attendance at arts-and-cultural institutions and restaurants, and money generated and injected into the local economy.

The events this summer produced a combined economic impact of nearly $500 million for Philadelphia, according to the Philadelphia Convention & Visitors Bureau.

The DNC push

The DNC has come and gone, but its affects linger. During the week — Monday, July 25, through Thursday, July 28 — hotel occupancy was at 97.6 percent, a 10.3 percent increase over the same time period last year, PHLCVB said.

The Philadelphia Business Journal during the week of the DNC reported hotel occupancy for that week was projected to be above at least 96 percent.

The 97.6 percent hotel occupancy resulted in revenue per available room, or RevPAR, to be 6.6 percent ahead of what it was during the same time last year, PHLCVB said.

The hotel demand for the week of the DNC resulted in Center City hotel room revenue seeing a $16.3 million increase over last year for a total of $22.9 million.

Philadelphia's arts-and-cultural institutions, including the Pennsylvania Academy of the Fine Arts and the National Constitution Center, also experienced a DNC boost and saw increased attendance.

PAFA, for example, saw increases of up to 1,532 percent compared to a typical summer week. The timeframe during the DNC (end of July to early August) is typically a slow time for the cultural sector as people are away on vacation or have just left town.

Restaurants — a complete U-turn from the decline in business during the papal visit last year — saw increase in business during the DNC as well, both in in-store business and catering business.

Some restaurants served as the backdrop to national media outlets. MSNBC's Morning Joe broadcast from McGillin's Olde Ale House, where Vice President Joe Biden also stopped by.

Hefty convention calendar

For years prior to 2014, large convention groups had pulled out of doing business in Philadelphia and the Pennsylvania Convention Center because of its antiquated work rules.

It came to the point where Philadelphia lost the opportunity to fill 925,000 hotel room nights and garner $1.3 billion in economic impact for 2014 through 2017, according to the PHLCVB.

Since 2014, however, the city's done an about-face.

Two years ago, the Convention Center implemented new work rules that made it easier and more cost-effective for exhibitors to do business there. The fruits of their labor — including a new reputation for Philadelphia and the Convention Center — are showing, particularly this year.

The Convention Center, which served as the venue for DNC caucus meetings and daily press briefings, was host to eight citywide conventions this summer, which combined generated an estimated economic impact of $192.2 million.

Drug Information Association — $21.7 million
African Methodist Episcopal Church Bicentennial — $21.2 million
The American Podiatric Medical Association — $7.8 million
The AVID Summer Institute (which led into the DNC) — $8.2 million
The American Association for Clinical Chemistry (which moved its dates after Philadelphia was named DNC host city) — $39.8 million
The American Chemical Society, American Political Science Association, ACN Inc. and the Society of Cable Telecommunications Engineers — $93.5 million combined

The American Association for Clinical Chemistry moved into the Convention Center directly after the DNC for its annual scientific meeting, which brought in 20,000 attendees. This year's meeting was the highest-attended show in the past four years and the second-highest attendance for any convention in Philadelphia this year behind the DNC, according to PHLCVB.

Our city's reputation is also helping the convention season carry into the fall. Local company B Lab switched its annual meeting's location to Philadelphia from North Carolina following the passage of a controversial bill in the southern state. Last held in the region in 2011 in Kennett Square, Pennsylvania, the meeting is expected to attract 550 people, and it's estimated to generate about $800,000 in economic impact.

Gregory J. Fox, chairman of the Pennsylvania Convention Center Authority, said this was a "banner summer" for the Convention Center, which completed its $787 million renovation and expansion in 2011, increasing the structure's size by 62 percent.

The 2016 Copa America Centenario soccer tournament, which included three games in Philadelphia, generated $41 million for the local economy as well.

PHLCVB used statistics from STR, DMAI Event Impact Calculator and the U.S. Bureau of Labor Statistics.

Kenneth Hilario covers hospitality, restaurants and takes on general assignments and breaking news.