The Democratic National Convention announced this week it is returning to the Midwest for its 2024 convention, selecting Chicago in a move that, if history holds, could give the city's hospitality industry its best August revenue numbers in more than a decade.
This will be the 26th major political nominating convention held in the Windy City but the first since Democrats renominated Bill Clinton there in 1996. Chicago, which outbid Atlanta and New York, holds the record for hosting the most political conventions, followed by Baltimore and Philadelphia.
Chicago was chosen after getting top grades in an evaluation by the DNC’s Technical Advisory Group, a panel of experts who considered factors such as hotel capacity, transportation, security, financing and other logistics. The daytime business will be conducted at the McCormick Place Convention Center with evening events to be held at the United Center — the main site of the 1996 Democratic convention in Chicago and, at 960,000 square feet, one of the largest arenas in North America.
The 2024 Democratic National Convention is expected to draw up to 7,000 delegates and alternates and attract up to 50,000 visitors to Chicago in August 2024.
Chicago’s selection as the next DNC host city is welcomed news for its hospitality industry. Chicago’s hotel market recovery from the pandemic has lagged, with 2022 occupancy still behind 2019 by 8.1% points. The market’s revenue per available room, or RevPAR, was still below pre-pandemic levels at a 96% recovery to 2019.
Hotel owners and operators can expect to see strong hotel RevPAR performance during the month of the convention. This is partly based on data going back to the 2000 DNC convention in Los Angeles, showing host cities have experienced a strong boost in RevPAR during the convention month.
For the five DNCs held between 2000 and 2016, the average RevPAR in the convention month was 40% higher than the prior three-year average RevPAR for the same month, based on data tracked by STR, CoStar’s hospitality data analytics firm. The 2020 DNC in Milwaukee saw a decline in occupancy, ADR and RevPAR since it was held only a few months after the onset of the pandemic and resulted in a virtual convention.
Some DNC conventions have delivered an even bigger boost to hotel performance, with the 2012 convention in Charlotte, North Carolina, driving RevPAR growth of 74%. The 2016 convention in Philadelphia boosted RevPAR for the city’s hotels by 43%, while the 2008 convention in Denver drove RevPAR growth of 40% compared to the prior three-year average.
Chicago’s RevPAR lift during the convention month will likely be driven more by ADR growth than occupancy, based on historical hotel performance data from prior DNCs. For each of the five DNC conventions held between 2000 and 2016, ADR growth in the convention month averaged 29%, where occupancy grew by 5 percentage points compared to the prior three-year average for the same month.
Chicago’s three-year average August RevPAR from 2017 to 2019 is $113.15, per STR data. Chicago’s RevPAR gains in August 2024 will likely be closer to Philadelphia and Denver’s RevPAR growth during the convention month, in the 40% to 45% increase range, since the number of attendees expected at the Chicago convention is similar to the attendance numbers from the Philadelphia and Denver DNCs.
Given Chicago's challenging recovery post-pandemic, the 2024 Democratic National Convention should provide much-needed tailwinds for the Windy City.