Iowa's campaign economy

@CNNMoney January 1, 2012: 12:23 PM ET

DES MOINES, Iowa (CNNMoney) -- The Iowa caucus isn't just a political exercise. It's also a very big business.

As candidates crisscross the state with their staffers, supporters and the media in hot pursuit, the groups dump money into local economies from Des Moines to Ottumwa.

"We definitely see it. We feel it," said Greg Edwards, President and CEO of the Greater Des Moines Convention and Visitor's Bureau. "It's a huge impact on us."

While difficult to quantify, Edwards estimates the caucus adds around $25 million to the Des Moines economy, and has a $100 million impact on the state at large.

That's not make-or-break for the state's $100 billion plus economy, but it's nothing to sneeze at either.

"There are so many different areas that money can go -- it's not all just going into hotels and restaurants. They are paying rent in office buildings, a lot of people are renting apartments," Edwards said.

Everyone from large, corporate-owned hotels to mom and pop t-shirt printers are trying to grab a piece of the cash.

"It's an incredible uptick in business," said Barbara Eslick, director of sales and marketing at the Renaissance Savery Hotel in Des Moines. "It's traditionally very, very slow for hotels, so to have a sold out hotel between Christmas and New Year's is huge."

The money infusion also creeps into less obvious places.

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"It's a boost for Iowans ... no question," said Kimberly Busbee, a make-up artist who counts a few of the candidates among her clientele. "It probably quadruples my income in a month."

But this year, things aren't quite as rosy.

Spending on political ads -- usually a hallmark of campaign strategy -- has fallen off a cliff, with some stations reporting reductions of 50% or more.

At KCCI, a CBS affiliate in Des Moines, ad sales are way down.

"I've never seen anything quite like this," said Paul Frederickson, a 38-year veteran of the television business and the station's general manager.

And even though Eslick's hotel is sold out for the caucus, she has noticed a slowdown in event space rentals by campaigns.

"It's considerably slower and a little quieter than it was in 2008," she said.

Of course, the obvious explanation is that with Democrats sitting this primary season out, the activities of just one party are unable to generate the same kind of economic activity as in 2008, when both parties were fully engaged.

"There is definitely a difference," Edwards said. "We'll see some lesser numbers this time around."

Still, Iowans are undeterred. The circus-like atmosphere is even a boon for perhaps the most unlikely of industries: the arts.

Robert John Ford, director of Caucus!, a musical that pokes fun at the campaign process, said that campaign staffers have been frequenting the production -- and giving a little extra revenue boost.

"We have this opportunity ... to sort of showcase whatever's going on in the state because we know that the national press will be here," Ford said. "And so there is a great opportunity economically to sort of sell Iowa."  To top of page

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