Chicago’s Jam-Packed Summer Pulls In Scorching Hotel Numbers. Can The City Keep Bringing The Heat?
Travelers flooded Chicago in full force this summer, fueled in part by a trio of marquee events: The Democratic National Convention, NASCAR’s Street Race and the annual Lollapalooza music festival.
The city’s tourism sector boomed on the back of an action-packed schedule, outpacing last year’s hotel demand and revenue metrics by a good margin. The Windy City also bucked a second-quarter industrywide trend that saw softening leisure demand and more price-sensitive travelers in many markets.
But sustaining the momentum will take work, and it starts with continuing to give tourists reasons to spend their money in Chicago, hotel insiders told Bisnow.
“You see foot traffic up, you see CTA ridership up, you see airport inbound traffic up,” Rich Gamble, interim president and CEO of Choose Chicago, said of this summer's showing. “You see the hotel room stays are up. Even Airbnb is up. So people are ready to come out and enjoy and all the best that Chicago has to offer.”
In June and July, the overall revenue per available room — a key metric in the hospitality industry — came in at $215.45, up 3% year-over-year, according to Choose Chicago data. Leisure-only RevPAR saw an even bigger jump, rising 5.7% in the same period, though neither figure is adjusted for inflation.
Full August tourism data isn’t in yet, but early DNC figures signal last month’s metrics will put a sizable capper on an already red-hot summer. During the week it hosted the convention, Chicago posted hotel RevPAR growth of 51.1% year-over-year, including a 74.7% jump in the central business district, according to CoStar data.
“The city's shown so well,” Maverick Hotels and Restaurants CEO Bob Habeeb said. “We've gotten [compliments] from people about how great Chicago looked, and honestly, it has and will create some future activity.”
But because tourism expectations for the DNC were sky high, the uptick in demand and revenue still fell short of the rosiest projections, Habeeb said. He said when the DNC provided the rooms it actually sold compared to the room blocks it reserved, the numbers were off by as much as 50% in some cases.
It’s not uncommon for conventions to claim they’ll use more rooms than they actually do, Habeeb said. Leisure travel can also be hit or miss during the end of August when kids go back to school. So even if the event didn't live up to the most optimistic projections, Habeeb and others welcomed the increased occupancy in what can be a slower time.
“The DNC is like the wedding that booked for 400 people and only 200 showed up,” Habeeb said. “Still a good wedding, but not to the extent that we'd expected.”
On the whole, Chicago benefited not only from marquee events, but from a “rich leisure calendar” this summer, Habeeb said. Summer staples like Taste of Chicago, the Chicago Blues Festival and the Air and Water Show returned this year, and the summer line-up also included events like Millennium Park celebrating its 20-year anniversary with a four-day festival in June.
This helped the city combat some of the softening in leisure that impacted other markets, Habeeb said.
Gamble added that Chicago also provides both an affordable option for some travelers while still capturing the luxury segment.
“We have offerings for people of every socioeconomic strata,” Gamble said. “It looks like it's a bit more immune to inflation and fluctuations that are more on the price side.”
Even so, Habeeb cautioned that Chicago has not been immune to an industrywide increase in operating costs and an ongoing battle with inflation and taxes that has made staying in the black tougher this summer season.
“Yes, we had a great summer for revenues,” Habeeb said. “The only thing keeping us from dancing in the streets is that we really struggled to convert that to the bottom line.”
The city will have to work hard to avoid a “yo-yo” effect coming off such an events-rich summer, but Habeeb said it can be done if the city starts laying building blocks now.
To use momentum from this summer as a springboard, Habeeb said the city needs to focus on bringing in events that draw people to the city and keep its facilities active. Leisure makes up a more significant chunk of travelers than it has in the past, he said.
"I'm not joking when I say if we can get Taylor Swift back [for] a couple days, those are the kind of things that we appreciate," Habeeb said. "This city is so amazing, and you give people just a little bit more reason to come here Taste of Chicago, a good concert, a sporting event, and they will turn out in big numbers."
