DNC: Hoteliers and city already counting the cash

The inconveniences of having 50,000 guests in town during this month’s Democratic National Convention may be partially outweighed by the cash they’ll leave behind in city coffers.

The Democratic National Convention is expected to have an economic impact of at least $160 million. Denverites will benefit from the taxes those visitors pay to stay in metro area hotels during the Aug. 25-28 festivities.

(Photo/aur2899, Flickr)
(Photo/aur2899, Flickr)

Whenever a traveler rests his or her head in one of the Denver area’s 40,000 hotel rooms, he or she pays a 14.85 percent lodging tax for the privilege.

About 20 percent of that money goes into state coffers with another 22 percent going into Denver’s general fund, with the rest divvied up between repayments of the Convention Center bonds and funding for transportation and cultural districts in the city.

Last year, even without a blockbuster convention, Denver collected almost $50 million in lodging taxes and is on pace to collected $52.2 million in 2008, according to the city.

The DNC is renting 17,200 Denver hotel rooms for party officials and delegates, according to the 2008 Denver Host Committee, the local organizing arm of the presidential nominating convention. Thousands of media members, company representatives and volunteers will also be checking in to Denver’s hotels.

Ilene Kamsler, president of the Metro Denver Hotel Association, said Denver hotels will be nearly at capacity, compared with an average occupancy rate of about 70 percent during late August.

Denver’s surrounding communities will benefit from the influx of convention-goers and the subsequent overflow of regular guests. August is already a busy season for the Colorado hospitality industry, she added.

Tourism boosters speculate that some visitors scared off by the DNC crowds will simply give Denver their business during other weeks of the summer, making the entire season a bigger monetary success.

“All of the hotels in the Front Range are going to benefit,” Kamsler said, adding that she has heard of business travelers resorting to booking hotel rooms in Loveland, 50 miles north of Denver.

Walter Keller, who has owned the Lumber Baron Inn, a five-room inn just northwest of downtown, for the past 15 years, is excited to cash in on the opportunity.

“We landed the biggest client the Lumber Baron has ever seen thanks to the DNC,” he said.

Keller said he fielded more than 500 phone calls from members of the media, convention delegates and volunteers curious about booking a room but had to find the perfect client to make up for the wedding parties and guests the convention had scared away during the last two weeks of August, typically his busy season.

A company with employees involved in the convention booked all the Baron’s rooms for seven nights and is paying well above the usual $149-a-night rate, Keller said, although he won’t reveal any details because of a confidentiality agreement with his guests.

During a normal, non-DNC year, Denver visitors on business or pleasure pay more than $58.8 million in taxes to the city, including lodging and sales taxes, dollars that would have to be made up by residents if not for the tourism industry, according to the Denver Metro Convention and Visitors Bureau, which receives a portion of the lodging tax to promote the city.

Convention organizers couldn’t provide an estimate of how much of the $160 million in projected economic impact will go directly to hotels or to taxpayers, but they say Denver’s annual visitors and the revenue they provide is rising.

Last year, Denver attracted a record number of convention visitors, and the city is on track to surpass that high mark this year, according to Denver Metro Convention and Visitors Bureau officials.

“In total, Denver hosted 336,116 meeting delegates in 2007, a 4.2 percent increase over 2006, resulting in a total of $547 million of spending in Denver,” said Angela Berardino, a spokeswoman for the bureau.

By last December, 187 conventions with almost 1 million attendees and an economic impact of $1.9 billion were scheduled at the Colorado Convention Center in Denver for 2008, Berardino added.

In the past, some hotel owners have complained about the “sticker shock” that accompanies the addition of a lodging tax to their customers’ bills.

Once a harsh critic of both the city’s lodging tax and Denver’s efforts to woo the DNC to town, hotelier Keller now says he is “thrilled beyond belief.”

“I have changed my tune, and I am now drinking the Kool-Aid for the people down at the visitors’ bureau,” Keller said, referring to his skepticism turned devotion when it comes to their marketing policies. “[With the DNC in town] everybody wins to a certain extent.”


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