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Chicago tourism experiences best summer since ’08

May 31, 2011

This summer is shaping up to be the best season for the local tourism industry since 2008, despite $4.50-a-gallon gasoline and a fragile economic recovery. Chicago ranks as the most popular Memorial Day travel destination among Americans, according to Norwalk, Conn.-based travel website Priceline.com, beating out Las Vegas, New York, London and Miami.

Local hoteliers project their numbers will pick up further this travel season, building on increases in occupancy rates and room prices that have tracked the rest of the U.S. so far in 2011, as business travel rebounds and “staycationers” began to head out again.

All of these visitors aid more than hotel operators. Out-of-towners’ dollars get left in restaurants, stores, ballparks, museums, tour buses and boats, and Navy Pier. Through taxes, their cash also ends up in the treasuries of city, county and state governments.

High fuel prices could actually make Chicago a bigger draw.

“We’ve got a couple of things going for us, not least of which is the uncertainty about fuel prices,” says John Chikow, president of the Greater North Michigan Avenue Assn. Although road-trippers are shelling out much more than they did last summer, “people in the Midwest can still put their family in the car and drive here for 20% or 30% less than they could fly anywhere else for.”

That’s good news because regional tourism is far and away Chicago’s bread and butter. Some 28.6 million domestic leisure travelers visited the city in 2009. Of those, 70%, or nearly 20 million people, came from Indiana, Michigan, Wisconsin or elsewhere in Illinois.

“The driving market, which is critical to summer success, was very strong during spring break,” says Patrick Hatton, general manager at the James, an upscale hotel in River North. Revenue increased 17% in March and nearly 20% in April thanks to rising occupancy and slightly higher rates. “You can just feel the energy in the lobby.”

At the Sax, another River North boutique hotel, Sales Manager John Visconti estimates his numbers are at least 10% ahead of last year’s. “There’s a lot of optimism right now,” he says.

Chicago, like other U.S. cities, is benefiting from the weak dollar, too. Chicago ranks 10th among U.S. cities in drawing overseas travel, bringing in 1.3 million international visitors in 2009, the last year for which numbers were available.

Business travel to Chicago, which dropped 18% between 2008 and 2009 as strapped companies grounded their staffs, also is on the rise. And even though business travelers are outnumbered more than 2-to-1 by tourists, they spend more than twice as much, according to statistics from the Chicago Convention and Tourism Bureau. In May, five major conventions met at McCormick Place, bringing in an estimated 112,000 people and $210 million in expenditures.

HOT DINING SPOT

Ian Goldberg, vice-president of Boka Restaurant Group, which operates a clutch of high-end spots including Girl & the Goat, says he’s seen a significant uptick in out-of-town diners, whether from Minneapolis or Paris, contributing to a 15% bump in overall business. “Chicago is becoming a legitimate dining destination, and we’re seeing a lot more travelers than this time last year,” he says.

Still, Chicago has a lot of ground to recover. Year-to-date, the hotel sector’s results lag 2008’s high point. Room rates, in particular, took a beating during the recession, dropping nearly 18% in 2009 and increasing 3% last year and another 9.2% in the first quarter, as hoteliers struggled to lure wary travelers back with promotions and deals.

“Hoteliers were tiptoeing into rate increases in the beginning of 2011, but as demand continues to grow, they’re going to push rates more aggressively in the second half of the year,” says Hans Detlefsen, managing director at local hotel consultancy HVS.

Tourists, then, won’t find the same deals they’ve become accustomed to. “Summer travelers in Chicago are going to pay significantly more than they did last summer,” Mr. Detlefsen says.

Article courtesy of Brigid Sweeney, Crain Communications; http://www.chicagobusiness.com/article/20110528/ISSUE01/305289973

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