🎯 STRisker: Bulletin - Chicago, IL
Chicago’s Hotel Fee: Investing in the City’s Future
Chicago Bets Big on Tourism Dollars
Photo by TravelandLeisure.com
Chicago is moving closer to creating a new Downtown tourism improvement district, a plan that would add a 1.5 percent fee to hotel stays of 30 days or less. The ordinance advanced out of the City Council’s Finance Committee on Friday with strong support from hotel groups and labor organizations.
The fee would apply only to hotels with 100 or more rooms, and while it’s not branded as a tax, the ordinance allows the charge to be passed down to guests. Combined with the existing 17.5 percent hotel tax, visitors could face a 19 percent total charge.
Supporters argue the measure is essential to boosting Chicago’s competitiveness. “This will provide the resources needed to sell Chicago more effectively so that we can pursue more meetings and conventions … [and] drive overnight stays,” said Nabil Moubayed, general manager of the InterContinental hotel.
He added, “More room nights become more shifts for our employees, more business for our nearby restaurants and shops, and definitely more economic activity throughout every neighborhood in the city.”
The projected $40 million in annual revenue would go to Choose Chicago, the city’s nonprofit marketing organization, whose $33 million budget lags behind competitors like Las Vegas and Orlando. Kristen Reynolds, CEO of Choose Chicago, said the district could generate $2.9 billion in economic impact, $269 million in new tax revenues, and 25,000 jobs. “And that’s a conservative model,” she noted.
Ald. Brian Hopkins called the proposal “rare and uncommon” because “any sector of Chicago’s economy [is] raising their hand and saying please tax me.”
Not everyone is convinced. Ald. David Moore cast the sole vote against, saying he wants a carveout for Chicago residents. “I want to make sure our own people aren’t subject to this,” he said.
If approved by the full council, an 11-member board—nine hotel operators, one representative from Choose Chicago, and one from the city—would oversee spending, subject to annual audits.
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