Major city hikes hotel tax to nearly 20% as tourism bosses eye future events

The Chicago City Council has agreed to raise its tourist tax in an effort to grow traveler marketing programs.

The vote on Ordinance 2026-0022544 will raise the tax on hotel rooms within that district to 19% from the rate of 17.5% — which includes a combined city, county and state tax, according to the Chicago Sun Times.

The increase will be applied to hotel stays at properties in the downtown and surrounding areas that contain over 100 rooms.

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The increase will apply to room rates at hotels with 100 or more rooms that agree to opt in.

The city council also passed the formation of the Tourism Improvement District (TID) — which will fund Choose Chicago, the city’s official destination marketing organization.

Revenue will be used for city marketing campaigns and to cover bid fees for conventions and major events.

Chicago is already targeting the Democratic National Convention, which requires a $1 million bid. 

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The Windy City previously hosted the DNC in August 2024.

Earlier this month, the Democratic National Committee (DNC) advanced bids from Atlanta, Boston, Chicago, Denver and Philadelphia.

Its advisory board is considering several factors, the DNC said — including a "commitment to selecting a city that shares Democratic values."

Mayor Brandon Johnson issued a press release after the City Council’s vote, praising the decision.

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"Chicago is a premier city for tourism, business travelers, conventions and large-scale events," said Johnson.

"My administration will continue our collaboration with Choose Chicago, as we continue to build up Chicago’s tourism and hospitality industry while leveraging economic growth and development to continue building safe and affordable communities across our city," he added.

Choose Chicago president and CEO Kristen Reynolds said in a press release that this marks a "transformative moment" for the city.

"With the TID in place, we now have the enhanced resources to match the ambition and vibrancy of our city," said Reynolds.

She added, "This investment will allow us to amplify our marketing efforts, attract more conventions and events and ultimately deliver significant benefits to Chicago’s economy and communities."

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Guy Chipparoni, chair of the Choose Chicago board of directors, said in a statement, "It sends a message to our competing cities that when it comes to attracting visitors, Chicago means business."

Reacting on social media to the news about the tax hike, one person wrote, "19% tax on a hotel room, making it the highest in the nation. Vacations can get pricey, especially for a family. How would this help tourism?"

Another X user wrote, "Democrats in Chicago will even dream up a breath tax. It's not far away."