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 greater Chicago market (Chicagoland). 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. ADR registered strong growth from 2004 through 2008, but then declined sharply in 2009 as the recession took hold. In 2010, occupancy increased, while ADR remained relatively flat; however, both metrics 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 because new supply outpaced demand growth during that period. 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 2021 when nearly all restrictions related to hospitality and tourism were lifted. Hoteliers report that business travel, which makes up about 40.0% of Chicago room nights, lagged in 2021 but commenced a rebound by the summer of 2022; moreover, group business, which accounts for another 30.0% of room nights, has recovered at a steadier pace. Leisure demand has remained strong, however, previously 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 remained low throughout the region in the first quarter of 2022. Larger group events and conventions began to return in the latter half of 2022, supporting improvements in overall demand and corporate travel. In 2022, occupancy and ADR rebounded significantly, with market ADR reaching a new all-time high level. The breadth of economic anchors in Downtown Chicago should bolster the economic recovery in the long term.

* 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.

ADR, Demand, Occupancy, RevPAR, and Supply Projections:

Change In Value For Market:

Chicago RevPAR Change

Chicago RevPAR

For more information, please contact:

	Brian Arevalo Senior Vice President Valuation, Market & Feasibility Consulting [email protected] +1 817 680-7666 (w)
	Amy Schmidt Vice President Valuation, Market & Feasibility Consulting [email protected] +1 815 701-8001 (w)