Chicago hotel industry buoyed by domestic and leisure travel in 2025

In spite of economic and political headwinds facing the global travel industry, Chicago’s hotel room demand rose 2.3% in 2025, compared to the previous year, the tourism agency Choose Chicago said on Tuesday.

Hotel room demand declined nationally by 0.5%, but Chicago bucked that trend, Choose Chicago CEO Kristen Reynolds said at the agency’s annual meeting. In spite of a “tough year” for tourism overall, Chicago’s leisure hotel room demand reached a record of 8.2 million room nights in 2025.

Tourism and events are a critical economic engine for Chicago. The industry supports more than 130,000 jobs and generates more than $20 billion in annual economic impact across the city, according to Choose Chicago.

Mayor Brandon Johnson said Choose Chicago helps tell the story of the city and its 77 diverse neighborhoods. Diversity is “why we’re under attack,” Johnson said at Tuesday’s meeting.

In recent months, Chicago has been the target of the federal government’s deportation campaign and raids by U.S Immigration and Customs Enforcement agents.

“You hear a lot of talk from the White House about Chicago,” Gov. JB Pritzker said at Choose Chicago’s meeting, referring to President Donald Trump’s ongoing comments that the city is dangerous and crime-ridden. But visitors to Chicago “instantly see through the fog of that false narrative,” Pritzker said.

Last year, tourism agencies across the U.S. were braced for no growth, Reynolds told the Sun-Times. In mid-2025, Choose Chicago’s goal was for tourism not to decline. But leisure travel in the city broke records, driven by key summer events such as a concert by K-pop group Blackpink that generated more revenue than Beyonce, she said.

Chicago’s first-ever live broadcast of Dick Clark’s New Year’s Rockin’ Eve drove the busiest New Year’s Eve for Chicago hotels on record, according to Choose Chicago.

Last year, the agency secured 65 conventions in future years, exceeding its targets of booking 49 conventions.

In 2026, Choose Chicago plans to grow international and emerging tourism markets and prepare for upcoming conventions and events, such as the 100th anniversary of Route 66 and the United States’ 250th anniversary. It is also amplifying neighborhood and cultural storytelling, including with its “All for the Love of Chicago” podcast that launched in January.

Reynolds said that a proposed 1.5 percentage point increase in the city’s 17.5% hotel tax was an “assessment” — and not technically a tax — that would help drive tourism in Chicago. “It would be a game changer,” she said.

The proposed increase would generate $40 million for Choose Chicago’s marketing budget and let it better compete with leaders Las Vegas and Orlando for conventions.

In spite of the heavy presence of immigration agents in recent months, Choose Chicago didn’t note much economic impact from the federal deportation campaign, Reynolds said. But it’s unclear how highly publicized ICE raids have damaged Chicago’s image. Those perceptions “can linger for years to come,” she said.

The U.S. tourism industry in general is grappling with uncertainty that dissuades people from traveling, Reynolds said. Domestic leisure travel fueled tourism in Chicago last year, but international visits to the U.S. have fallen.

The U.S. tourism industry faces more headwinds. Last year, U.S. Customs and Border Protection announced it may seek five years of social media history from visa waiver program travelers to the U.S., as well as other personal information such as phone contacts.

The visa waiver program lets citizens from 42 countries, including most of the European Union and the UK, to travel to the U.S. for up to 90 days without a visa.

The proposal could hurt international travel to the U.S. and weaken its tourism economy with up to 157,000 jobs lost, the World Travel & Tourism Council said in January. The U.S. could lose about 4.7 million international visitors and $21.5 billion in travel and tourism gross domestic product, according to the tourism council.

Contributing: AP