CHICAGO – Chicago’s economy is slowly starting to thaw, with businesses reopening and people returning to bars, restaurants and more.
But the city’s hotels remain in a world of hurt.
“Our industry was brought to its knees,” says Michael Jacobson, president and CEO of the Illinois Hotel and Lodging Association. “We were one of the first industries impacted by the virus…and it’s becoming more and more clear that we are going to be the last industry to truly recover.”
Occupancy rate is a key metric in the lodging business. Amid the pandemic that rate at downtown hotels plunged to 27 percent, from 74 percent in 2019, according to the research firm STR. The true rate may have been even lower, too, because it doesn’t include hotels that closed.
In all, a total of 75 hotels shuttered at some point during the pandemic. And a third of those with a total of more than 13,000 rooms still haven’t reopened, according to STR.
“This is so heartbreaking, how many thousands of people this impacts,” Jacobson says.
The picture could get worse before it improves. More than 55 percent of hotels in the greater Chicago region have fallen behind on their loan payments, a sign that the properties could be running low on cash. By comparison, just 2 percent of hotels were more than 60 days delinquent on a loan payment at this time last year, according to data from New York-based Trepp LLC.
There are glimmers of hope for the industry, though.
A new hotel, the Sable at Navy Pier Chicago, recently opened. And experts say as more restaurants and bars welcome more people and events, such as concerts and baseball games, start to return, the city’s hotel fortunes will improve.
“The summer months will be very good because they are solidly leisure,” says Bob Habeeb, owner of the Sable Hotel. “And then…September [will be] the next test point in our recovery.”