The Impact of Convention Center Conference Attendees on the City’s Economy

Business travelers are an increasingly important component of the hospitality sector and the District’s economy. In 2017, the District of Columbia attracted 22.8 million visitors to the city, approximately 41 percent of whom travelled here primarily for business and 59 percent primarily for leisure. This study analyzed the economic and fiscal impacts of conference attendees of the Walter E. Washington Convention Center (WEWCC). Convention center conference attendees are a small but important subset of business travelers to the District of Columbia because of the essential role they play in the of the 2.3 million-square-foot publicly financed WEWCC and the adjoining 14-story 1,175 room convention center hotel.

Data

This study used three types of data.  First, the study started with monthly hotel sales tax data for each hotel in the city for the years 2005 through 2016. Second, the study matched the monthly hotel tax data to Destination DC conference booking data (such as dates, number of conference days, number of registered attendees, number of requested hotel rooms) for large conferences for years 2005 to 2016. Large conferences are those citywide conferences held at the convention center with 2,500 or more hotel rooms booked in the city on peak nights. And third, the study used citywide average daily hotel room rates (ADRs) and occupancy rates from Smith Travel Research (STR) for years 2005 to 2018.

Upon review of the conference data for all years, medical conferences are the only subset of conferences that continues to be substantially large in all years in terms of reserved hotels room nights. They alone account for almost half of all city hotel room nights attributable to convention center attendees. Accordingly, all convention center conferences for all years were categorized into two broad categories: medical conferences and all other conferences.

Medical conferences are a boon to the District

Compared to years 2005 to 2013, the average yearly conference attendance at the convention center for years 2014 to 2016 was down 6.1 percent even as hotel spending rose by 24 percent. (Estimates for hotel spending by conference attendees was possible using monthly citywide hotel sales tax data, which was only available for the years 2005 through 2016.) The main reason for this result is the growing role of medical conferences at the convention center. Whereas medical conferences attendees once accounted for 43.1 percent of all annual conference attendees at the convention center, in more recent years they accounted for 50.9 percent of all attendees and were responsible for 68.8 percent of hotel spending by all conference attendees (Figure 1). The study also estimates that, on average, medical conference attendees spent at least 35 percent more on hotel rooms than other conference attendees. In sum, the higher share of medical conference attendees, with their higher rate of spending, more than offset the spending impact of lower overall level of conference attendees to the District.

Source: Author’s calculations derived from WEWCC Conference, DC Office of Tax and Revenue and STR data.

Looking Ahead

Figure 2 shows convention center conference attendance for time period: 2005 to 2019. The figure also shows the estimated attendance based on confirmed bookings for years 2020-2022.

Source: Destination DC WEWCC Conference data.

The study finds the average attendance for years 2014 to 2016 for all conferences was 319,020. For years 2017 to 2019, the annual average attendance for all conferences was 53,725 (16.8 percent) higher. But, the annual average attendance for all conferences for years 2020 to 2022 (as of June 2019), is 15,059 (4.7 percent) lower than in years 2014 to 2016.  The number of confirmed conference attendees for 2021 and 2022 may be a bit concerning, but conference bookings are likely to only increase given that there is one to two years of additional time to secure additional conference bookings.  

For years 2005 to 2016, there was an average of 7.0 medical conferences and 14.8 all other conferences took place per year (Figure 3). However, for years 2017 to 2022, confirmed bookings indicate that there will be an average of 7.2 medical conferences and 16.7 all other conferences per year. Also, in years 2005 to 2011 the average conference length (number of conference days per conference) was 3.4 days for all conferences and 3.6 days for medical conferences. However, for years 2012 to 2016 the average conference length was 3.8 days for all conferences and 4.3 days for medical conferences. The recent trend of more total conference attendees, more medical conferences attendees, and longer conferences at the WEWCC is expected to increase the economic impact of future conferences to the city.

Conclusion

Convention center conference attendees are a small but important subset of business travelers to the District of Columbia because of their essential role in the publicly financed the District’s convention center and the adjoining convention center hotel.  In 2017, over 455,000 conference attendees (excluding inauguration attendees) visited the convention center, and they spent an estimated $116 million in hotel spending which in turn generated an estimated $16.8 million in hotel tax revenue (7.8 percent of total citywide hotel tax revenue). Given the national and local trends for business travelers and the hospitality industry, the relatively new convention center hotel, and the existing convention center conference bookings for years 2020 to 2022, it is possible that city hotel spending (and other subsequent spending in the city) by all conference attendees in years 2020 to 2022 may approach or even exceed that of 2017.

DC’s population reached 705,749 in 2019, almost 25% more than in 2005 when it started to grow

Increase slowed last year, however, with net in-migration averaging only about one person per day

The US Bureau of the Census estimates DC’s population on July 1, 2019 was 705,749, an increase of 4,202 (0.6%) from the revised estimate for 2018. 2019 was the 14th straight year of population growth. From 2005 to 2019 the city grew by 138,613, a remarkable gain of 24.4%. Also notable is that growth slowed in 2019, primarily due to decreases in net migration.

  • In the 14 years since 2015 the average annual gain in DC’s population was 11,241. The 4,202 gain in 2019 was 37.4 % of that average. 2019 was the slowest growth in 12 years and the smallest percentage gain in all the years since 2005.

graph 1

  • Natural increase accounted for 90.8% of the increase in population from 2018 to 2019, a percentage much higher than the annual average from 2010 to 2019, which was 40.2%. (Natural increase is births minus deaths.)

Net migration accounted for under 10% of last year’s increase as only 401 more persons moved to DC than moved away. Negative domestic migration (-2,203) was just slightly offset by positive international migration (2,604). The 401 net gain is an average of just over 1 person per day throughout 2019. By contrast, from 2010 through 2019 the daily average increase was 18 per day.

Revisions to prior year estimates. In preparing the July 1, 2019 population estimate, the Census Bureau also revised prior year estimates back to 2010. The most significant revisions were cuts to amounts in 2016, 2017, and 2018. For example, the new estimate for 2018 is 701,547, a reduction of 908 from the earlier estimate of 702,455.

Components of population change last year compared to the 9 1/4 years since the April 1, 2010 Census

The 4,202 increase in DC’s population from 2018 to 2019 was just 37.4% of the average annual increase since the April 2010 decennial census count. As already mentioned, the biggest change was in net migration, but other points are worthy of note as well.

  • In 2019 the number of births, 9,433, was 31 more than the annual average since 2010. Deaths, however, exceeded the decade average by 734, which explains why the natural increase in 2019 was below the average annual change since the last Census.
  • The fall in net domestic migration is quite striking. The average annual gain in the years since the Census is almost 3,000 per year. In 2019 there was a decline of 2,203.
  • Net international migration continues to contribute positively to DC population growth, but this has slowed as well. The amount in 2019 was just 71.2% of the annual average since the 2010 Census.

It should be noted that these Census estimates are summary statistics and leave out many important details, such as the number of households, the total number of people moving in and moving out, and the different characteristics of these persons. (how many are children, income, etc.).

DC and the US. For most of the years in which DC population has been growing, that growth has been at a rate faster than the nation-as-a-whole. In 2019 as its growth has slowed, DC’s 0.6% rate of increase got close to the US one (0.5%).

The share of the nation’s population in DC has been growing since 2007 when it was 0.191%. By 2019 it had climbed to 0.215%.

Comparison with the 50 states. In 2019 DC’s population was greater than that of Wyoming and Vermont. (The next closest states to DC are Alaska (731,545) and North Dakota (762,062).) Also from 2018 to 2019:

  • DC’s population increase exceeded that in 16 states (10 of which lost population). In percentage terms, DC’s 0.6% growth was faster than in 33 states.
  • DC’s natural increase was greater than in 11 states (4 of which were negative). DC had more births than 2 states (Vermont and Wyoming) and fewer deaths than two (Alaska and Wyoming). The natural increase in DC, however, was greater than in 11 states because in most states the number of births and deaths are closer in number than in DC.
  • DC’s net domestic migration, although negative, was less negative than in 20 states.
  • DC’s net international migration was greater than in 16 states.

About the data: The information reported here is from the tables released in December 2019 by the US Bureau of the Census in connection with population estimates for the 50 states and the District of Columbia as of July 1, 2019. The tables include (1) total population; (2) population as of April 1, 2010 in the decennial census and as of July 1 of each year from 2010 through 2019; (3) components of population change from July 1, 2018 to July 1,2019, and (4) components of population change from April 1, 2010, to July 1, 2019. The components of change are natural increase (with births and deaths shown separately) and net migration (with international and domestic migration shown separately. The data include revisions to the years 2010 through 2018.

An earlier version appeared in the December 2019 District of Columbia Economic and Revenue Trends report issued by the DC Office of the Chief Financial Officer.

Appendix table