The Economics of Inauguration: An Interview with Mason Tourism Expert Daniels

Posted: January 16, 2009 at 1:00 am, Last Updated: November 30, -0001 at 12:00 am

By Jennifer Edgerly

Maggie Daniels
Maggie Daniels
Photo courtesy of Maggie Daniels

Associate Professor of Tourism and Events Management Maggie Daniels has conducted extensive fieldwork in tourism planning and policy, supply resource promotion and event management as it relates to local and regional economic development.

She partners with agencies in the Washington, D.C., metropolitan area to assist them with tourism and event implementation and evaluation.

Daniels is a prolific researcher and has more than 50 published papers, book chapters, professional presentations and technical reports to her credit.

She has conducted visitor and resident studies with the Smithsonian Institution’s National Air and Space Museum. She is currently completing a series of service provision and economic impact studies with the National Park Service in conjunction with the anticipated release of a 50-year vision plan for the National Mall and Memorial Parks.

Recently, Daniels discussed the inauguration of Barack Obama from a tourism viewpoint and the impact it will have on the metropolitan region.

What impact will the inauguration, and the influx of tourists, have on the local economy?

When looking at the economic impacts of tourism, there are generally certain areas, such as lodging, transportation, food and beverage, retail trade and other service-based sectors where you will see a financial impact. Lodging places will receive the bulk of the impact, with hotel prices raised three times or more in comparison to the normal rate for this time of year and at least double what the rate would be on a holiday weekend like Memorial Day or Labor Day. Importantly, the inauguration influence radiates beyond D.C., well into Virginia and Maryland, and includes hinterland counties.

How will the increase in revenue affect the local economy?

The fascinating thing is that this injection of money has, in some respects, already been spent. Many of the hotels, restaurants, bars, caterers, etc., are using this money to cover their losses from 2008. So, although it’s very important, it’s not necessarily going to be transformational for the 2009 economic outlook. However, looking at personal income impacts, the hotels and the catering companies need to hire short-term staff to help them handle the onslaught of events that are taking place over the next few days. One caterer I spoke with hired 150 short-term employees to cover the inauguration events. From that perspective, area residents negatively affected by the recession are benefitting financially.

What kind of long-term effects will this inauguration have on the area?

The long-term influence will be the media attention and the associated heightened interest in visiting Washington, D.C. I have no doubt that the election of Barack Obama will drive people to D.C. because this administration is revolutionary. In the next year in particular, we will see an increased number of national and international visitors. Sustaining those levels or continuing to see an increase in tourism over time, however, will depend on how this administration performs during its first year.

What sectors of the local economy will fare the best with the rush of people to D.C.?

Lodging, food and beverage, security services and transportation will all do very well. Using transportation as an example, Metro is raising their parking prices and using rush-hour fares, tour bus companies are benefitting tremendously and cab drivers will also profit from the flood of tourists. The decision to close the bridges from Virginia to D.C. to personal vehicles makes the inauguration all the more lucrative for public transportation and private tour companies.

What do you say to those people who think the size of the inauguration, number of events and the inaugural balls are just too much?

There will always be people who see these events as frivolous. The bottom line, though, is that the sectors of the economy that these events boost are typically those with low-paying jobs. So this gives individuals who work in those sectors a wonderful opportunity for an immense amount of overtime, which is particularly valuable during the current recession. If those who are paying to attend the inaugural balls, concerts and other events can afford it, then I say absolutely go for it, because they are helping out the average citizen who is not doing all that well by injecting money into the economy that is desperately needed in these sectors.

What does it take to plan an inauguration and all the events that come with it?

A very experienced event planning team. The Presidential Inaugural Committee has been hiring the same event management company, Hargrove, to handle the major events for many years. They are very capable of planning and executing the official events. Additionally, there must be cooperation between the government entities in D.C., Virginia and Maryland to coordinate transportation and security. Finally, oversight from federal agencies such as the National Park Service is necessary to protect the natural and cultural resources on the National Mall.

Where does funding for the inauguration and extra staffing come from?

The inauguration of Barack Obama is predicted to be the most expensive ever. Accordingly, the White House declared a state of emergency to clear the way for federal funds to offset some of the costs being incurred by D.C., Virginia and Maryland have also requested federal assistance. Many of the events are paid for with tax dollars. Private funds will be used to pay for many of the celebrity events that are taking place.

Is the National Park Service prepared to handle the record crowds that are predicted for the inauguration?

It’s important for people to realize that the National Mall and Memorial Parks is a federal park system that is separate from the Smithsonian Institution and other museums adjacent to the National Mall. For mega-events, however, the management teams work together very well to ensure the safety and security of visitors. For instance, when the National Mall needed to be evacuated due to severe lightening and thunderstorms during the 2007 Independence Day Celebration, museums and federal buildings were used as safe havens where visitors stayed until the weather abated. Similarly, for the inauguration, these groups will collaborate to provide basic services such as food, restrooms, first aid, security and shelter. My experiences with the Cherry Blossom Festival and Independence Day Celebration lead me to believe that the biggest, combined challenge will be with adequate food and restroom provision on the National Mall itself; more specifically, keeping the food stands adequately supplied and the restrooms clean. An additional significant issue will be the need for quick attention to first-aid emergencies, in particular due to concerns of hypothermia if visitors do not bring adequate cold-weather gear.

Will we ever know how many people actually attended the inauguration?

Current estimates range between 2 and 4 million visitors. But even those close to the planning process acknowledge that there is no way to predict what will happen. The general consensus is that this will be the largest gathering ever held on the National Mall. Interestingly, the National Park Service is prohibited from publicizing attendance figures at special events for political reasons. However, unofficial headcounts using aerial photography will certainly be offered by the media.

There have been stories in the news about people in the greater D.C. area leaving town for the inauguration over security concerns. Do you believe that people in the outlying regions need to be concerned about security?

This inauguration is one of the most important events of the past 100 years, and there is a great deal of associated momentum in the entire metropolitan region, accompanied by both realistic and unrealistic fears. I firmly believe that security concerns have been well considered and addressed by leaders in D.C., Virginia and Maryland. For those in both close and outlying areas, the long-term benefits to the regional economy will far outweigh the inconveniences, primarily transportation-based, that will occur.

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