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Chicago tourism approaches, but still lags, 2019 levels

Chicago tourism has yet to return to pre-pandemic levels, but it could fully recover by 2024, and possibly before, industry leaders said.

In the four weeks ending July 9, hotel occupancy in the central business district was 75%, compared with 81% during the same time in 2019, according to research firm STR. And, in the first six months of the year, hotel stays generated 82% of the tax revenue they did during the same time pre-pandemic, according to Choose Chicago.

Industry leaders expressed optimism at a news conference Wednesday about the pace at which tourism is returning. In the week leading up to the July 4 holiday, hotel occupancy exceeded 2019 levels for the first time since the start of the pandemic, said Michael Jacobson, CEO of the Illinois Hotel and Lodging Association.

The recovery will be significant as a bellwether for Chicago’s economy as a whole.

“Travel and tourism is at the epicenter of this vital hub and spoke model, and a true economic engine of our entire region,” said Jack Lavin, CEO of the Chicagoland Chamber of Commerce.

Chicago’s hospitality industry, battered by the pandemic, has been slower to come back than in other cities, the CEOS of Hyatt Hotels and American Airlines have said. The return of international and business travelers, traditionally a key piece of the city’s hospitality industry, has been slower than the return of leisure travelers. Industry leaders have also been tasked with overcoming concerns about downtown crime, both real and perceived.

In one sign of the distress of the industry, Wells Fargo Bank recently took control of the JW Marriot Chicago hotel at a foreclosure auction.

The foreclosure likely will not lead to noticeable changes for travelers at the hotel this summer, but it’s not likely to be the last hotel foreclosure, Jacobson said.

“I think when you look at the damage that was done to our industry, you’re not going to, as good as the numbers are this summer, you’re not going to make up for the losses with one strong summer,” he said. “There is still a lot of hurt amongst hotel owners.”

Still, Glenn Eden, board chair for Choose Chicago, said he was optimistic not only that travel would return full force to the city, but that the city could reimagine what travel to the Midwest looks like.

He attributed the city’s lagging recovery partly to an unfair comparison with smaller cities. It’s reasonably smaller cities would come back quicker than Chicago because there were fewer travelers to bring back in the first place, he said.

Another factor likely at play is the city’s now-lifted COVID-19 mask and vaccine policies. Travelers, especially business travelers, might have chosen not to come to Chicago when booking earlier this year or in previous years, while the mandates were in effect, because they weren’t sure how open the city would be by their scheduled travel, Jacobson said . One example, he said, was the Sweets & Snacks Expo, which went to Indianapolis in 2021 while McCormick Place was closed due to COVID-19 restrictions, and beginning in 2024 is set to rotate over 10 years between Indianapolis and Las Vegas.

But the city’s virus policies likely brought other business meetings to Chicago, helping them feel safer, he said. And states’ policies on political issues like gun control and abortion rights are likely to play an increasing factor in bringing more business meetings and conventions to the city, he said.

Convention attendance has recently been around 70% of pre-pandemic levels, and he expects it to grow, Jacobson said. In the first six months of 2022, hotel bookings for leisure travel were at 76% of 2019 levels, and business travel was at 71%, according to Choose Chicago.

“Should politics play a role in where a big event takes place? I can’t say that,” Jacobson said. “But it does play a role, and in many ways Chicago is now beginning to capitalize on that.”

Crime remains a concern for tourism agencies, but it hasn’t led to any large changes in where visitors are booking hotels, Jacobson said.

Despite their optimism, the industry leaders cautioned against new regulations at an industry turning point. Lavin, with the chamber of commerce, called for policies to help with job training and retention, and incentives to attract conventions.

“This is still very much an urgent time for this critical element of our city’s economy,” he said.

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