Election 2000: Philadelphia Story

The Republican National Convention in Philadelphia next month is expected to bring plenty of business to the local economy. How much does this city stand to gain?

An estimated 45,000 Republican delegates, party officials, media representatives, and their families will converge on Philadelphia from July 31 to August 3. During that time GOP presidential candidate George W. Bush is expected to formally receive his party's nomination.

Philadelphia is comfortable hosting conventions—from labor unions to medical groups. But the presence of a high-profile national political convention brings an extra dimension to the economic benefits—and additional problems—facing the city.

Karen Buchholz is the president of Philadelphia 2000, an organization that promotes economic growth and tourism. She sees many opportunities in the massive influx of visitors and news coverage.

"It's a terrific opportunity for the host city," she says. "The only thing larger than this is the Olympics. Philadelphia will really become the center of the universe for the week of the convention. That's advertising you can't pay for. And it's an opportunity to tell the Philadelphia story."

At the same time, those attending the convention will be opening their wallets to local businesses. On the left side of the table below, list the kinds of businesses you think will benefit most from the Republican National Convention (hotels, for example). On the right side, list some of the problems that come with having so many people visiting. (Extra traffic would be one.)

• The 45,000 conventioneers are expected to bring $100 million to businesses in Philadelphia. What will each visitor be spending on average?

• Visitors to the1996 Republican National Convention in San Diego spent $82 million. By what percentage is spending expected to increase in Philadelphia this year?

Philadelphia 2000's Buchholz says that the length of the Republican National Convention means that visitors will stay in the city for five nights instead of the two or three nights usually required by other kinds of conventions.

"People shop while they're here. They'll go on tours while they're here," she adds. More revenue is likely to come from visitors who return in the future or viewers who have watched convention news coverage on television.

The saying goes that "to make money, you have to spend money." Whether trying to land the Olympic Games or national political conventions, major U.S. cities go all out. Philadelphia is expected to amass $52 million in expenses, including the $1 million used to promote Philadelphia in the first place and the $5 million it will cost for additional police during the convention.

Try your hand at a simple cost/benefits analysis for the coming convention:

• If the total cost is $52 million and the economic benefit is $100 million, by what percentage will the benefit exceed the original investment?

• More optimistic estimates place the economic benefit at $125 million. In that case, by what percentage will the benefit exceed the original investment?

Local entrepreneurs plan to cash in with a variety of products and services:

• The official caterer at Philadelphia's First Union Center, where the GOP convention will be held, is charging $25 for a dozen "Philly-style soft pretzels." Street vendors usually sell these pretzels for $ .50 each. At that rate, how much could you save by purchasing a dozen pretzels from one of these vendors?

• "Philly," a small, white teddy bear, with the GOP's traditional elephant symbol emblazoned on his chest, sells for $8. If 5% of the 45,000 people attending the convention bought one, what would the total amount of sales come to?

• A "GOP Philly 2000" pin—with "GOP" in red, white, and blue—will cost $45 each. How many will the manufacturer have to sell to make $10,000 in sales of this item?