Impact of 2024 political conventions on host cities: A comparative analysis

From room availability and pricing to short-term rental trends, these conventions offer valuable insights into revenue strategies for hoteliers.

Recently we hosted a LinkedIn live where Blake Reiter (Director of Hospitality Research) took a deep dive into some of the numbers that tell an interesting story about the effects of these large political events.

Event overview and key figures

Both conventions attracted similar numbers of attendees—an estimated 50,000 people per event. However, the market response in these cities differed, reflecting the unique characteristics of each location. 

Milwaukee, a smaller city with fewer lodging options, witnessed higher hotel rates due to limited supply. In contrast, Chicago, with its expansive room inventory, experienced moderate price hikes, even as occupancy remained lower than expected leading up to the event​ .

Here are some quick figures:

• Milwaukee: Around 6,200 downtown hotel rooms, with a total of 25,000 in the greater metropolitan area.

• Chicago: Approximately 46,000 hotel rooms within the central business district​.

These numbers are critical in understanding how supply constraints in smaller markets like Milwaukee can result in significantly higher hotel pricing.

Pricing data analysis: Milwaukee outperforms Chicago

When analyzing hotel pricing during the conventions, Milwaukee’s market outpaced Chicago in terms of rates, despite both cities hosting roughly the same number of attendees. For the RNC in Milwaukee, the average bookable rate, or what Lighthouse terms "actualized lowest price," stood at $361. Chicago, on the other hand, saw an average rate of $270 for the DNC .

This 33.7% premium in Milwaukee can be attributed to the city’s smaller supply of available rooms, creating more competition for limited resources. Chicago, while more significant in size, saw only a moderate rise in hotel pricing, peaking six months before the convention.

 The ample supply likely tempered price inflation as the event approached, with last-minute rates dropping to fill vacant rooms.

Supply and demand dynamics: The role of lead time

One of the most interesting insights from the data is the role of booking lead time. Chicago saw its highest hotel prices around 188 days before the event. However, when occupancy rates were only 30% six months before the DNC, revenue managers responded by cutting rates​.

In Milwaukee, the trend was different. Due to its smaller size and limited hotel supply, prices steadily appreciated as the event neared. This pattern is typical of large-scale events in smaller cities, where a limited room inventory can drive competition and price surges as demand outpaces supply.

The takeaway here for revenue managers is clear: monitoring lead times and adjusting rates based on occupancy forecasts can significantly affect revenue. Events like the DNC and RNC highlight the importance of understanding market conditions and adjusting pricing strategies to capitalize on last-minute bookings.

Short-term Rentals: A growing competitor

The role of short-term rentals (STRs) during both conventions cannot be overlooked. STRs saw significant occupancy rates, with 68% of available units booked in Milwaukee during the RNC and 62% in Chicago for the DNC​ .

Interestingly, short-term rentals in Milwaukee achieved higher average daily rates (ADR) than Chicago, mirroring the trends seen in hotels. Milwaukee’s short-term rental ADR for the RNC stood at $344 per bedroom, whereas Chicago’s was significantly lower at $172 per bedroom .

This difference underscores the importance of monitoring STR competition, especially in markets where hotels are in short supply. In many cases, short-term rentals offer more flexibility in accommodating groups, which may explain their popularity during these events. 

For example, during the RNC, a significant portion of STR bookings in Milwaukee was for multi-bedroom units, catering to larger groups who preferred sharing accommodations .

2024 DNC and RNC Short Term Rental Performance Comparison

Occupancy patterns: The importance of event timing

Another factor that influenced both hotel and short-term rental performance was the timing of key convention events. In both the RNC and DNC, Thursday night—the night of the nominee’s speech—saw contrasting trends.

While the DNC’s Thursday night in Chicago saw the highest occupancy of the four nights, the RNC’s equivalent night in Milwaukee experienced the second-lowest occupancy. This contrast highlights how event programming can influence booking patterns, particularly for hoteliers managing room blocks and group reservations​ .

Revenue managers can use such insights to adjust pricing and promotional strategies. By anticipating demand spikes for key events during large-scale conventions, they can better manage inventory and optimize pricing to maximize revenue.

Year-Over-Year Growth: Positive Trends for Both Markets

From a broader perspective, both conventions contributed positively to their respective lodging markets, with year-over-year growth in average daily rates and occupancy. Milwaukee saw a 55.6% growth in hotel pricing, while Chicago experienced a 62% growth​​.

2024 DNC and RNC Pricing Comparison

However, Chicago’s higher growth came from a lower base, highlighting the importance of historical pricing data in evaluating the true impact of large-scale events. Revenue managers can learn from these trends by benchmarking against previous years and adjusting their expectations accordingly.

Key takeaways for hoteliers and Revenue Managers

1. Supply and demand drives pricing: Smaller cities with limited room availability, like Milwaukee, can experience significant price surges during large-scale events. On the other hand, larger cities like Chicago may need to lower prices to boost occupancy when room supply outstrips demand.

2. Monitor lead time closely: Pricing strategies should be adjusted based on lead time. Chicago’s peak pricing occurred six months before the event, after which prices were slashed to boost bookings.

3. Short-term rentals as a competitive force: Short-term rentals played a crucial role during both conventions, with multi-bedroom units catering to groups. Hoteliers should be aware of this competition and adjust their strategies accordingly.

4. Stay pattern trends: Key event nights can create demand spikes, as seen with the DNC. Revenue managers should anticipate these patterns and adjust room blocks and rates to capture the highest possible revenue.

5. Historical comparisons matter: Political conventions are an irregular, but impactful demand driver for hotel markets - looking at historical performance from similarly-sized previous events, and other benchmarking data can help hoteliers better strategize for future occurrences. 

The 2024 DNC and RNC provided a rich case study on how political conventions can impact local hotel markets. By understanding the nuances of supply, demand, and booking behaviors, revenue managers can better navigate similar large-scale events in the future, ensuring that they optimize revenue and stay competitive in an ever-evolving market.