RNC's impact less than expected at some restaurants. But hotels, other businesses did well

The Republican National Convention's economic impact was less than expected, according to several downtown restauranteurs.

But Milwaukee-area hotels did very well hosting tens of thousands of guests. And other local vendors got business that wouldn't have otherwise existed without the RNC.

Also, the convention went relatively smoothly, and will help Milwaukee draw other big events, said supporters.

"I think it really is a positive thing and will help the city grow and attract more conventions," said Omar Shaikh, a Surg Restaurant Group partner who's on the board of the Wisconsin Center District, which operates the newly expanded Baird Center convention facility.

That sentiment was echoed by others. That includes Scott Yance, who said business dropped at his Scottfree Salon, 726 N. Milwaukee St., before returning to normal the following week.

"Man, I would have loved to have made money," Yance said. "But I'll chalk it up as an investment in the city."

The mixed picture, emerging after the convention's July 18 end, comes from the Milwaukee Journal Sentinel's interviews with nearly 40 business operators, as well as new data on hotel occupancy and room rates.

Visit Milwaukee to issue economic impact study this fall

A detailed view is expected in about three months. That's when an economic impact report will be issued by Visit Milwaukee Inc., a publicly funded nonprofit group that promotes Milwaukee as a travel destination.

Visit Milwaukee's pre-convention estimate was a $200 million impact, with around 50,000 visitors. That includes delegates, their guests, journalists and law enforcement officers.

That estimate featured spending on hotels, restaurants, taverns, transportation and event rentals as well as other contractors and vendors. It included funds from a federal payment of $50 million for security − an amount later revised to $75 million .

Several of the more than 30 Milwaukee-area business operators interviewed during the RNC (along with additional operators interviewed the following week) said they were disappointed with the level of business. Some reported revenue that was actually lower than a typical summer week.

Three big factors were at play: a spike in downtown employees working remotely, which decimated the normal lunch trade; a reluctance by area residents to venture downtown for dinner because of real and perceived traffic issues, and the busy schedule of delegates − many bused from hotels to Fiserv Forum and other venues − which left little time to explore downtown restaurants, taverns and shops.

"It wasn't like it was successful for us," said Karen Bell, who operates Bavette La Boucherie, a restaurant and butcher shop at 217 N. Broadway in the Historic Third Ward.

Milwaukee Public Market, the Third Ward's best-known attraction, saw slow business early in the week that began picking up Wednesday evening and was back to normal by Thursday, said Paul Schwartz, executive director. The market, 400 N. Water St., has around 20 food and beverage vendors.

At Major Goolsby's , 340 W. Kilbourn Ave., business struggled as the sports bar was surrounded by the hard security perimeter, but located in the soft zone. Convention goers had to walk around the block to get into the restaurant, and then take a long route through the Baird Center to go through security to reenter the hard perimeter.

"It was the worst," said Orissa Somlai, assistant manager.

Somlai said the bar overstaffed for what was expected to be a busy week.

"We put all these people on the schedule because they tell us we're going to be so crazy and it's going to be awesome," Somlai said.

"Then, you know, people took off their full-time jobs to come work thinking that they were going to be able to pay for a vacation to take their family on," she said. "They didn’t even make enough to pay their bills."

Private events helped drive restaurant sales

Businesses which booked private events did better.

That included 3rd Street Market Hall, 275 W. Wisconsin Ave., which features around 20 food and beverage vendors.

"If we didn't do parties, we would have been down," said Shaikh, who oversees the operation.

Meanwhile, Shaikh's Carnevor high-end steakhouse, 718 N. Milwaukee St., didn't see a big business boost and recorded a more typical week.

Also underwhelmed was Caravan Hospitality Group LLC's three businesses in the 700 block of North Jefferson Street: SportClub, Barrel Burrito Co. and Experts Only Apres Bar. Their collective revenue was down by 46% compared to the previous week, said Mike Eitel, Caravan owner.

Still, some restaurant and tavern operators said it was a positive experience.

"Week to week it was up for sure," said Bobby Wiltgen, who operates three King Drive businesses near Fiserv Forum: Who's On Third, Oak Barrel Public House and Third Street Tavern.

However, there were lost sales tied to disruption of downtown street traffic, he said.

The Trade Hotel, 420 W. Juneau Ave., was closed to the public during the RNC, but business was still booming according to Riley Gwilliam, a bartender at the hotel's Craft bar.

"It was a very different change of pace here, incredibly busy," she said. "We had higher profile people who were here breakfast, lunch and dinner. It helped because we had three different restaurants and bars, so there was variety."

Busy Milwaukee-area hotels raised rates

Meanwhile, hotels throughout southeastern Wisconsin, along with some in the Madison area, did a strong business.

The occupancy rate for Milwaukee-area hotels during the convention week was 83.4%, according to a new report from CoStar, a real estate data provider.

That compares to 69.2% from the previous week.

The average daily room rate during the RNC was just over $350 compared to around $179 during the previous week, according to CoStar.

That led to Milwaukee-area hotels reporting daily revenue per room of $292, compared to $124.

"This data represents the first of many proof points that this event delivered a significant impact for Milwaukee," said said Peggy Williams-Smith, Visit Milwaukee president and chief executive officer.

Marcus Hotels President Michael Evans said guest rooms at the company's three downtown properties − the Pfister Hotel, Saint Kate − The Arts Hotel, and Hilton Milwaukee City Center − "were sold out at healthy rates for the week."

Business at the hotels' bars and restaurants was "softer than expected" due to security restrictions and a lower than anticipated number of meetings and events, Evans said.

RNC impact goes beyond hotels and restaurants

It's not a surprise hotels would post such good results.

At the 2016 RNC in Cleveland, direct spending totaled $110.1 million. The largest business segment was lodging, with $24.2 million, according to an economic impact study conducted by Tourism Economics and commissioned by the convention's host committee.

Food and beverage spending totaled $8.9 million. That trailed such categories as government spending on security and other items, $18.3 million; construction, $18.2 million, and professional services and business equipment, $13.9 million.

That study found a total economic impact of $188.4 million, which included $78.3 million in indirect and induced spending.

Indirect spending covers goods and services which businesses procure because of the convention − such as a tavern stocking up on whiskey and beer. Induced spending covers money spent by employees of hotels, restaurants and other affected businesses through wages they earned during the convention.

A separate study , by Cleveland State University, estimated a lower economic impact: $67.9 million in direct spending, plus $74.3 million in indirect and induced spending, for a total of $142.2 million.

In Milwaukee, the economic impact went well beyond hotels, restaurants and taverns to include other businesses − such as commercial printing firm Burton & Mayer Inc., a family-owned operation in Menomonee Falls.

Burton & Mayer earned RNC-related revenue of around $40,000 to $50,000, including a rush order on Trump/Vance signs after presidential nominee Donald Trump announced his selection of Sen. JD Vance as his running mate.

"We did see an increase in business from them − business we wouldn't have had if we hadn't signed up as a vendor," said Kathy Dillett, a Burton & Mayer sales representative.

Milwaukee-based Olympus Group was hired to provide custom-print graphic exterior and interior signs at Fiserv Forum, the RNC's main venue.

It marked the first time the company, which does work for trade shows and other events, received a contract tied to a national political convention, said Jason Brunner, vice president of sales and marketing. The contract coincided with Olympus Group's slower summer season, he said.

"For this to hit in June and July was great for us," Brunner said.

Tom Daykin can be emailed at tdaykin@jrn.com and followed on Instagram , X and Facebook .

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This article originally appeared on Milwaukee Journal Sentinel: RNC's impact less than expected at some restaurants. But hotels, other businesses did well