Apr 19, 2022 - Politics

If Iowa loses caucus position, Des Moines will miss out on major boost

Illustration of cash going into a ballot box with Iowa graphic

Illustration: Lindsey Bailey/Axios

The boost Des Moines gains from the Iowa caucuses is on the line now that the Democratic National Committee no longer guarantees the state its first-in-the-nation status in the presidential nominating process.

Why it matters: The political frenzy fuels revenue upticks for hotels, restaurants, leisure businesses and media outlets in the capital city.

Plus: The caucuses provide a boost during a typical lull in travel during the January and February months.

  • And they can often draw national media — and their money — to the area even earlier to catch events like the Iowa State Fair and the Harkin Steak Fry, Greg Edwards, president of Catch Des Moines, told Axios.
  • "The hotels have already been asking us, what's going on?" Edwards told Axios.

By the numbers: In 2020, Catch Des Moines estimated the caucuses generated $11.3 million in revenue for Des Moines businesses, based on hotel reservations and the number of media outlets who came to the metro the week prior to the event.

  • For media outlets, the advertising spending is significant. In Iowa, political ads from caucus candidates reached $44 million for the 2020 caucus, an increase from $40 million in 2016.
  • But the big draw is the amount of exposure Des Moines gets by major news outlets mentioning the city — an advertising value that's estimated to total $200+ million, Edwards said.

Yes, but: Economists say the effects aren't long-lasting.

  • Around January and February, Des Moines hotels are typically at 60% capacity. That marginally bumps to 90% in a caucus year.
  • In comparison, the annual state wrestling tournament results in 100% capacity, Iowa State economist Peter Orazem said in 2020.

And in terms of the labor market, most Iowans who are capable of working a full-time job are already employed.

  • Campaign positions mostly draw from the existing workforce, rather than provide new jobs.

Between the lines: Some benefits, like networking, are hard to measure.

  • Raygun owner Mike Draper said connections created during the caucuses have led to more business opportunities, including a relationship with the White House Correspondents' Association.

The Des Moines-based clothing and design company is making T-shirts and swag for the group's upcoming dinner on April 30, featuring comedian Trevor Noah.

  • "A lot of the work we've done has come from connections with the caucuses," Draper said.

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