SUMMER COMEBACK
After weeks of no guests, Chicago’s tourism industry is betting on local leisure travel to help it rebound
Heading into the official start of summer, Chicago’s tourism scene will be vastly different from years past.
There will be no major events like Lollapalooza, Chicago Pride Parade or Taste of Chicago. Skydeck Chicago, the observation deck on top of Willis Tower, is closed. So are the museums. Baseball has been canceled since March.
Already the Fourth of July weekend is shaping up to be a dud with the fireworks show at Navy Pier canceled. The event typically draws more than 100,000 people, according to Navy Pier spokesperson Payal Patel.
Without these and other events that draw millions of people to the city each year, the chances of Chicago’s tourism industry rebounding anytime soon will be slim, experts say.
But as Chicago moves forward with a phased reopening, industry insiders see a glimmer of hope. More visitors are coming from outside the state, and suburban residents are venturing downtown after weeks of being cooped up at home.
“We will have to tailor experiences with what’s open. We have to promote the boat tours and the outdoor dining patios. … It doesn’t mean we can’t be an attractive destination,” said David Whitaker, president and CEO of Choose Chicago, the city’s tourism arm.
While the fireworks are canceled, Navy Pier partially reopened June 10 for outdoor dining and will be open for the holiday at a limited capacity, Patel said. Architectural boat tours, the Riverwalk, kayak rental companies and some rooftop bars downtown have also reopened.
And signs of liveliness have slowly come back to the city’s Loop. Itching for a night out, local residents strolled downtown on a clear Wednesday evening, and some were taking graduation photos by the Wrigley Building on Michigan Avenue.
According to the Loop Alliance, pedestrian activity on State Street in the Loop has increased by 35.3% so far in June compared with the first few weeks of April, the height of Gov. J.B. Pritzker’s stay-athome order. However, pedestrian activity this month is still down by 79% compared with the same time period in 2019.
At the Cloud Gate sculpture known as The Bean, a couple of dozen people sporting face masks were taking photos, though the sculpture was still surrounded by a fence.
Cherrica Igot, 19, and her two sisters were visiting Chicago for a day from Oroville, California. They were on their wayto Virginia, where Igot’s oldest sister is moving for a new job.
“After being home for so long and with so many places still closed, we decided to take a road trip. We wanted to have
more time together,” Igot said.
Igot said they wanted to try Chicago-style deep dish pizza, and dined out at Lou Malnati’s in the city’s Near North neighborhood. “We saw that Chicago was reopened, and we wanted to stop by,” she said.
Still, occupancy rates remain abysmal in the city, causing a major headwind for hotels. For the week ending June 6, the occupancy rate in Chicago was 31.1%, a decrease from 83.5% during the same time period last year, according to data tracking firm STR.
But the lodging business sees an opportunity to attract summer road-trippers, particularly those from surrounding states. The eight states closest to Illinois typically account for 70% of leisure travel to the city, according to Whitaker, from Choose Chicago. “We have been the playground for neighboring states,” he said.
Steve Corona, 71, of Fort Wayne, Indiana, is a season ticket holder for the Chicago Cubs and often visits the city during the summer.
Corona said he planned to stay in Chicago for the month of July, splitting lodging between the Palmer House and Airbnb rentals, to watch the Cubs play at Wrigley Field. But his reservations at the Palmer House, booked months in advance for the first week of July, were canceled by the hotel.
Hilton Worldwide, which owns the Palmer House, said the hotel is temporarily closed as a result of the impact to business from the coronavirus pandemic, and did not provide a date for reopening.
But Corona said his reservations for the end of July haven’t been canceled, giving him hope his plans aren’t entirely ruined.
“I’m ready to go. I want to get to the park,” he said Thursday, as baseball season remained in doubt.
Some hotels are seeing leisure travel pick up.
Oxford Hotels and Resorts, which manages LondonHouse, The Langham and The Godfrey, started seeing a rebound three weeks ago, and business at LondonHouse’s rooftop bar is “booming,” said President George Jordan.
“The weekends are when business usually picks up. But it’s very last minute. People are booking 24 to 72 hours ahead of their trips,” Jordan said.
Most visitors are coming from the suburbs and exurbs, Jordan said. “People want to get out of their nest. … We see pent-up demand. They want to go out. They want to walk down Michigan Avenue,” he said.
On a recent Wednesday evening, Jordan said the LondonHouse had an occupancy rate of about 70%.
During the pandemic, Oxford had a contract with the city to supply about 1,100 rooms at some of its hotels to house and feed first responders and health care workers requiring isolation. Oxford laid off about 75% of its staff nationwide but has started bringing workers back as business picked up, Jordan said. The contract with the city helped the company weather the storm, and about 40% of those laid off from LondonHouse are back at work, he said.
The hotel business has been hurting since early March, when major conventions hosted in the city began dropping out due to the coronavirus. About a third of hotel stays in Chicago are from annual conventions, trade shows and business meetings at McCormick Place, experts say.
“It lives and breathes by meetings. … But group travel is going to be one of the segments that recovers the slowest because COVID-19 spreads in close proximity to people,” Blake Reiter, director of custom forecast for STR, said.
Chicago is losing more than $1.4 billion, including spending at hotels, restaurants and entertainment options, from the nearly 100 cancellations of McCormick Place trade shows, according to estimates from the Near South Side convention venue.
Last year, direct tourism spending in Chicago accounted for more than $16.5 billion, generating more than $1.1 billion in tax revenue for the city and state, according to the most current data from Choose Chicago, the city’s tourism arm.
Choose Chicago, along with a group of 250 businesses and organizations, is hoping to help the ailing industry with an initiative to promote Chicago as a safe place to travel.
In late May, Choose Chicago announced the Tourism & Hospitality Forward initiative, a pledge to get businesses to establish best practices and safety measures. Some 250 hotels, museums, hospitality-related businesses, zoos and other organizations have signed on.
“There is no marketing or tourism template for reopening during a global pandemic. We need to make sure tourists can trust us. Safety is going to be a high priority for us to bring back workers and guests,” said Glenn Eden, chairman of the Choose Chicago board of directors and executive vice president for Weber Shandwick, a Chicagobased public relations firm.
In April, Mayor Lori Lightfoot named ad agency veteran Michael Fassnacht as chief marketing officer, tasked with promoting the city’s tourism industry.
“Welcoming visitors will mean something different now,” Whitaker said. “It’s promoting that it’s a safe environment to be at.”
Hotels have been forced to adapt to the change in consumer demand. Big chain hotels like Chicagobased Hyatt are trying to attract customers by making it easier for customers to change their reservations.
Starting July 1 through July of next year, guests can cancel a reservation with Hyatt at no charge up to 24 hours before arrival. The policy does not apply to group bookings, and there are limitations for guests who booked through travel agents and other third parties.
Hyatt also is rolling out more targeted promotions through its website to feature destinations closer to where people live, said Julia Vander Ploeg, senior vice president and global head of digital for Hyatt.
Ploeg declined to give occupancy rates at Hyatt hotels, but said it has seen an uptick in guests taking local trips as well as people driving to their destination.
“We are seeing leisure travelers act on this first. I think it’s really reflecting of basic human desire to explore and travel,” Ploeg said.
Still, the road ahead is tough as more hotels announce layoffs.
On Monday, Hilton said it was cutting about 22%, or some 2,100, corporate employees globally. Hyatt announced in May it would lay off some 1,300 corporate employees, including 350 in Chicago. And Marriott International said in May it is extending furloughs through Oct. 2 and offering buyouts to corporate employees.
“Many hotels that I’m talking to are still seeing more cancellations than bookings. And they are still in the red in terms of bookings,” said Michael Jacobson, president and CEO of the Illinois Hotel and Lodging Association.
Though it’s uncertain how their plans might pan out this summer, some people are ready to travel. Corona, from Fort Wayne, said he still plans to visit Chicago in late July for about a week. He said the city is enjoyable even without baseball.
“Me and my wife like to go to Lou Malnati’s and eat at all sorts of restaurants in the city. We enjoy going to Chicago every year,” he said.