G-20 Economic Displacement

By Fester


At the end of May, I was skeptical that the G-20 would provide a significant net boost of regional economic activity in Pittsburgh because the combination of a massive security bubble, low local value-add to the goods and services that will be consumed by the summit goers and significant displacement would occur:

So the combination of typical activity displacement, opportunity cost and massive security disruptions will make most probable estimates of economic impact be far less than the hopes of local officials...

Hotel reservations will be gobbled up by summit attendees but they will be displacing normal business travellers as well as any other potential conventions that could have been occurring at the same time. ...

Downtown will be massively disrupted.... It is likely that many downtown businesses will not be open during the summit. Normal spending will not occur, and it may be replaced to some degree by summit spending

The Post-Gazette is reporting that these disruptions are already occurring as they tell the story of a disrupted wedding and throw in a couple of other useful hooks as well:

plans for a Sept. 25 wedding at the Sheraton Station Square wilted faster than a fragile boutonniere.

While the hotel staff at first told the Bethel Park couple that the gathering here of 20 world leaders on Thursday and Friday, Sept. 24 and 25,would not affect their Big Day, the two learned the following week that their guests would be subject to background checks and security checkpoints....

Andrew Sliben, director of sales and marketing at the Sheraton Station Square, said his staff explained to the couple that the G-20 summit might interfere with their wedding, adding that it could take an hour to get up and down in an elevator because of security....

So the wedding was moved to another Friday at the hotel, Aug. 21...

While the same florist and photographer were still available on the new date, about 30 of their 150 intended guests were not -- including key relatives...

The G-20 summit in this case has cost the Pittsburgh regional economy between twenty and thirty out of town visitors with attendant hotel fees, car rentals, meals out, as well as some number of airline seats that will no longer be bought, as well degrading some utility from the prospective bride and groom. And this is not just the story of a single wedding getting displaced. The PG article notes that a medium size meeting for American Eagle, a locally headquartered company, will most likely take place in another city due to the G-20 instead of Pittsburgh.

Furthermore if Station Square is within the security perimeter, the disruption to Downtown will be far more significant than I had previously projected as I had projected a small perimeter of only a few hundred yards/a few blocks around the Convention Center would be heavily secured while it looks like a much larger region will be in the security zone.