The last 14 months have been incredibly difficult for Chicago’s usually booming hospitality industry. Though many hotels are still grappling with lower occupancy rates and many employees are still laid off, a recent uptick in travel means things are starting to look up.
Adam Gurgiolo, general manager of the Kimpton Hotel Monaco Chicago, says his hotel has seen a marked improvement in occupancy over the last couple of months.
“It’s been a combination of 14 months of … people pent up, and wanting to get out and about again,” Gurgiolo said. “The vaccine has made a huge difference. People are braver now and willing to go out. And then of course the Chicago weather. Once that turned, we started to see a nice impact – mainly on the weekends at this point but going in the right direction.”
“We’re definitely doing better than we have been for the last 14 months, but there is still a long ways to go,” said Michael Jacobson, president and CEO of the Illinois Hotel and Lodging Association. For the week ending May 15, Chicago hotels had a 35% occupancy rate compared to 87% for the same week in 2019, according to data from the firm STR.
“We don’t anticipate fully recovering on occupancy rate as well as employment until 2024,” Jacobson said.
Gurgiolo says most of the Hotel Monaco’s rooms are being booked by people traveling for leisure rather than business. “We are seeing some business travel start to trickle in, but for the most part it’s leisure – a lot of (locals), but people are coming from other states as well now that Chicago’s opening up a little more,” he said.
With McCormick Place set to reopen to the public in July, Jacobson anticipates group travel like meetings, conferences and conventions will start to pick up.
“When you saw the mayor and governor announce the reopening of McCormick Place, that’s when you started seeing some of our largest convention-centric hotels announce their reopening,” Jacobson said. “It shows you how important … meetings, conferences, conventions are to Chicago. … That is the bread and butter.”
But reopening a hotel requires rehiring previously laid-off staff, and Jacobson says hotels need bridge funding to do that. His group wants the city to set aside $75 million in American Rescue Plan stimulus money to help hotel owners hire staff, and is hoping for $250 million in ARP funding from the state before the legislature adjourns next week.
“We’re hopeful that the legislators, both at the city and state (level), see the value. This is not going to hotel owners, this isn’t meant to renovate a ballroom, this is meant to (get) people back to work,” Jacobson said.
Gurgiolo says he’s feeling far more optimistic than he did in May of last year.
“A year ago, let’s be honest – we didn’t know what was happening,” Gurgiolo said. “We knew we would eventually recover, but we didn’t know when. Now at least we have some sort of a timeline and we’re seeing the light at the end of the tunnel.”