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Cash flows in: How conventions stimulate the local economy
Thursday, April 28, 2011

VisitPittsburgh has calculated that attendees of the National Rifle Association convention starting tonight at the David L. Lawrence Convention Center will pump about $23.7 million into the local economy before the event ends on Sunday.

The bulk of that spending -- about $16 million -- should come from the out-of-town attendees.

And those are conservative estimates, according to Joe McGrath, the CEO of VisitPittsburgh, the region's tourism organization.

Stephen Spear, an economics professor at Carnegie Mellon University's Tepper School of Business, agreed. VisitPittsburgh's numbers are based on estimates of direct spending only, which Mr. Spear said produces "a fairly good number."

Mr. McGrath, in order to back up how conservative VisitPittsburgh is in its estimates, pointed to Phoenix, where the Phoenix Business Journal quoted the head of the Arizona Hotel and Lodging Association as estimating the economic impact from the 2009 NRA convention at $70 million.

Mr. Spear said other cities go beyond direct spending to estimate the "economic impact," which is a formula that attempts to capture the full effect of dollars spent locally. For example, if a waitress receives a $5 tip from a convention attendee, she can then spend that money for coffee herself, thus "multiplying" the effect of the original $5.

"The really difficult part is to figure out what gets spent locally," he said, because the money spent here may go to Cleveland to pay a credit card bill.

The direct spending formula, Mr. Spear said, produces a much lower estimate.

Part of the difficulty in determining the overall economic boost of the NRA convention, Mr. McGrath said, is that there are different types of people planning to attend. There are the high spenders, such as the gun manufacturers and dealers who will have booths at the meeting, the lobbyists and politicians, and then there are the NRA members.

While there is some economic benefit from local members driving into Downtown for the day, Mr. McGrath said, they account for only about $35 each per day.

Craig Davis, the vice president of sales and marketing for VisitPittsburgh, said that $35 goes mostly toward parking and meals.

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