The Chicago hotel market went from really bad to worse last week, and it hasn’t hit bottom yet.
More than nine out of 10 hotel rooms in downtown Chicago were empty last week as business and leisure travel continued to plunge and the coronavirus forced the International Housewares Association to cancel its trade show at McCormick Place, one of the biggest conventions of the year.
The downtown hotel occupancy rate plunged to 9.3 percent the week of March 15-21, down from 70.5 percent in the comparative period a year earlier, according to STR, a hotel research and consulting firm based outside Nashville, Tenn. The average downtown daily room rate fell 18 percent, to $125.39.
The coronavirus has decimated the hotel industry nationwide, which has suffered revenue declines worse than those after 9/11 and the global financial crisis, STR Vice President Jan Freitag said in a statement.
“Seven of 10 rooms were empty around the country” last week, he said. “That average is staggering on its own, but it’s tougher to process when you consider that occupancy will likely fall further . . .The industry is no doubt facing a situation that will take a concerted effort by brands, owners and the government to overcome.”
Many downtown hotels, including the Hilton Chicago, the Chicago Athletic Association, the Peninsula and the Park Hyatt, have already shut down. But the pandemic has provided an opportunity for some hotels, including the Hotel Essex and Hotel Julian, that are participating in a city program to provide temporary accommodations for people, including first responders, exposed to the virus.
Still, the numbers are downright ugly. In downtown Chicago, hotel revenue per available room, or RevPAR, a key metric that accounts for occupancy and room rate, fell to $11.72, down 89.1 percent from a year earlier, according to STR. Nationally, RevPAR fell 69.5 percent to $28.32.
One reason for the big drop in Chicago: The cancellation by the International Housewares Association of its Inspired Home Show, scheduled for March 14-17 at McCormick Place. The trade show was expected to attract 56,000 people and generate 47,000 overnight stays at local hotels.
Including suburban hotels, the occupancy rate for the Chicago market overall fell to 20.4 percent last week, down from 67.1 percent a year earlier. The average daily rate declined 31.9 percent, to $82.51, while RevPAR slipped 79.3 percent, to $16.80, according to STR.
The San Francisco metro area suffered the biggest drop in hotel RevPAR, 89.3 percent, followed by the New Orleans market, 86.5 percent.
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March 26, 2020 at 02:38AM
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Chicago hotel occupancies plunged last week amid spreading coronavirus - Crain's Chicago Business
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