United States -  Chicago

McCormick Place (convention center), local corporations, and leisure attractions, such as Navy Pier, Soldier Field, and the Shedd Aquarium, represent the primary sources of demand in the Metro Chicago market. The declines in occupancy in 2008 and 2009 were caused by the economic downturn and reduced travel in the region, compounded by significant new supply. Average rate (ADR) registered strong growth from 2004 through 2008, but sharply declined in 2009 as the recession took hold. In 2010, occupancy increased, while ADR remained relatively flat. Both occupancy and ADR grew from 2011 through 2015 as the local and national lodging markets continued to recover. After peaking in 2015, market occupancy fell in 2016 and 2017 as new supply outpaced demand growth. This occupancy trend reversed in 2018, as the addition of new supply was largely offset by a strong convention year. The new supply caused ADR to decrease in 2019, but despite the new supply, the Chicagoland market still sold a record number of guestrooms that year.

The COVID-19 pandemic had a major impact on the Chicagoland market, with the metro area being one of the hardest hit in the United States. Chicago effectively shut down mid-March 2020 but reopened in phases through June 11, 2021, when Chicago and Illinois moved to Phase V of the reopening plan, essentially removing all restrictions related to hospitality and tourism. Hoteliers report that business travel, which makes up about 40% of Chicago room nights, is still minimal, and group business, which accounts for another 30% of room nights, has been slow to rebound. Group events were also affected due to local indoor dining and vaccine requirements, but all COVID restrictions have been lifted as of March 1, 2022. Leisure demand has been strong, however, making up the majority of room nights sold in Downtown Chicago. The suburban markets fared better than the urban center, with some commercial travel and significant leisure travel, but group room nights remain low throughout the region. Local hoteliers report that market occupancy will remain depressed until corporate and group travel rebound. ADR recovery is also anticipated to be slow, as it will take several years to rebound from the severe decline.

* Although the HVI cannot tell you what a particular hotel is worth, it does provide excellent “big picture” data, indicating which market areas are experiencing positive trends, and thus may present good investment opportunities. The HVI for the U.S. is a measure of the strength of the lodging industry as a whole and, specifically, the hospitality investment market. The HVI for the various identified markets can provide a basis to evaluate and compare different geographic regions. For more insight on the limitations and applicability of the HVI, please read the message on the HVI home page by clicking on the graphic at the top of this page.

Change In Value For Market:

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: More than -10%