Add news
March 2010
April 2010
May 2010June 2010July 2010
August 2010
September 2010October 2010
November 2010
December 2010
January 2011
February 2011March 2011April 2011May 2011June 2011July 2011August 2011September 2011October 2011November 2011December 2011January 2012February 2012March 2012April 2012May 2012June 2012July 2012August 2012September 2012October 2012November 2012December 2012January 2013February 2013March 2013April 2013May 2013June 2013July 2013August 2013September 2013October 2013November 2013December 2013January 2014February 2014March 2014April 2014May 2014June 2014July 2014August 2014September 2014October 2014November 2014December 2014January 2015February 2015March 2015April 2015May 2015June 2015July 2015August 2015September 2015October 2015November 2015December 2015January 2016February 2016March 2016April 2016May 2016June 2016July 2016August 2016September 2016October 2016November 2016December 2016January 2017February 2017March 2017April 2017May 2017June 2017July 2017August 2017September 2017October 2017November 2017December 2017January 2018February 2018March 2018April 2018May 2018June 2018July 2018August 2018September 2018October 2018November 2018December 2018January 2019February 2019March 2019April 2019May 2019June 2019July 2019August 2019September 2019October 2019November 2019December 2019January 2020February 2020March 2020April 2020May 2020June 2020July 2020August 2020September 2020October 2020November 2020December 2020January 2021
123456789101112131415161718
19
20
21
22
23
24
25
26
27
28
29
30
31
News Every Day |

Vaccine or not, Chicago hotels brace for 2021 turmoil

The Wit Hotel at 201 N. State St.
The Wit Hotel at 201 N. State St. | Pat Nabong/Sun-Times

Experts contend many owners could lose their properties if financial pressures persist and more trade shows and conventions are canceled.

Chicago is a great hotel town because it’s a great business meeting town.

The choices here for visitors are immense. In the days before COVID-19, you had your pick of history at the Palmer House, the old-money elegance of The Drake, the unapologetic luxury of the Peninsula, or the brash energy of newer and hipper lodging with the typical but wildly popular rooftop bar. Most are still open in a limited fashion.

With a downtown inventory of about 44,000 hotel rooms, Chicago offers incredible variety. Even the less preferred places have their uses. Want Michigan Avenue on a budget? Try the Congress Plaza Hotel. And you needn’t be a guest to get some benefits. Bill Kimpton, the late founder of the Kimpton Hotel & Restaurant Group, once recalled how as a young man working in Chicago he would duck into the dim lobby of the old Bismarck Hotel for a nap. Kimpton’s company eventually modernized the Bismarck and jazzed up the lobby.

It’s not weekend and holiday trippers or even drowsy locals who allow for all those choices. It’s business gatherings and conventions, a segment that’s been at a standstill since the start of the pandemic. It made for a lost year in the lodging trade for 2020, but this year may be worse for many owners.

With little cash coming in, many hotel owners are in default to creditors. Experts in the industry say bankers and other lenders to hotels are getting impatient as the pandemic stretches on. Beyond that, owners are faced with the prospect that meetings and conventions scheduled months from now will be canceled.

Industry consultant Ted Mandigo estimated 80% of owners he knows are in deep trouble, similar to the Palmer House, which has gone into foreclosure. “They’re all having conversations with lenders. These aren’t friendly conversations,” Mandigo said. He estimated that even with progress against COVID-19, hotels here will struggle to average 50% occupancy by late 2021 and maybe hit 60% in 2022, still lower than industry norms.

Preliminary data for December from travel research firm STR show just 15.7% of available downtown rooms were occupied, compared with 64.1% in December 2019. The revenue per available room last month ran an astonishingly low $18.04 per night. Hotels used to rake in more just from guests raiding the mini-bar.

For all of 2020 through November, STR said the downtown hotels had an occupancy rate of 28% versus 75% for the same stretch of 2019.

“A number of hotel and restaurant operators are hanging by the tip of their fingers, and they’ll lose their grip,” said Robert Habeeb, chief executive officer of Chicago-based Maverick Hotels & Restaurants, whose local properties include the new hotel at Navy Pier. The pandemic forced the Pier to close for the winter, and Habeeb said he still hopes to open the hotel around April 1.

Habeeb said his own firm is not in dire straits because it’s relatively young and without a debt overload. He’s also planning to open a hotel this spring in Chinatown.

He said the first quarter “will be a disaster.” Habeeb is hoping for good vaccine news and a pickup in leisure travel during the warmer weather. The big uncertainty, in his view, is the fourth quarter, when business travel usually predominates.

Regardless of where state mitigations stand, meeting planners are considering now whether they can have an event later this year. In the case of large conventions, “those stages and displays can take months to build,” said Michael Jacobson, CEO of the Illinois Hotel & Lodging Association.

“Everybody is praying and hoping for the acceleration of the vaccine rollout. Until that time comes, we’ll be in a world of hurt,” he said. But with lingering fears about travel or large crowds, Jacobson predicted it’ll be 2024 before Chicago hotels see business return to the pace of 2019.

What are the upshots of all this? More hard times for hotel workers, for one. Most have been sidelined since March, with many now counting on the enlarged and extended unemployment benefits Congress authorized at the end of 2020. Anyone in the construction trades tied to McCormick Place faces another lean year.

Also, Chicago could see some hotels close for good, although experts see most properties muddling through somehow, perhaps under new ownership. “The Palmer House will always be a hotel,” Habeeb said. “But it’s so huge that some parts of it could be redeveloped into something else.”

Blackstone Group and others in private equity are known to be gathering cash to buy hotels on the cheap.

In Jacobson’s view, there will be troublesome turbulence. While employees remain idle and small hotel owners are squeezed, investors with capital will profit as the industry recovers. “It comes down to the rich getting richer,” he said.

It sounds like a theme for our times.

 Pat Nabong/Sun-Times
Incoming traffic was slow Friday at the Hyatt Regency Chicago, 151 E. Wacker Drive, the city’s largest hotel.




Read also

01/17/2021 News & Commentary - Korea

Mike Pompeo is desperately trying to co-opt Trump's legacy: columnist

Iconic US Music Producer Phil Spector Dies While Serving Prison Sentence For Murder




News, articles, comments, with a minute-by-minute update, now on Today24.pro



Today24.pro — latest news 24/7. You can add your news instantly now — here