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Emanuel: Chicago Hotel Tax Revenue Hits Record $100M in '12

CHICAGO-Hotel occupancy hits 75% in 2012, tying the 2007 record, and pushing hotel tax revenue to $100 million for first time in city's history.

By Chip Barnett | Updated on January 23, 2013

CHICAGO – Hotel occupancy, average daily rate, and revenue per available room all grew in 2012 for the third straight year, Mayor Rahm Emanuel and Choose Chicago announced today.

Hotel occupancy rose 4.2% to 75.2%, matching the previous record in 2007. This increase in visitors resulted in hotel tax revenue reaching a record $100 million, up $25 million from 2011.   “Increasing tourism and business travel to Chicago is a central part of my economic strategy and I am pleased to report that we are seeing huge increases in all key metrics, demonstrating that our multi-faceted approach is working and that Chicago is a top destination for people around the world,” Emanuel says in a press release.   ADR increased 5.6% last year, to $187.27, from $177.33 in 2011, and RevPAR rose 10% to $140.76.   Compared to its competitive market set, Chicago ranked third in occupancy growth and saw gains in leisure and group travel. This comes as the quantity of hotel rooms in the city continues to grow, meaning more beds are filled as more beds become available. Choose Chicago is focusing on attracting out-of-market visitors through advertising campaigns and media relations.   “Increased visitation to Chicago delivers immediate value for the city’s overall economic development efforts as well as our hotels, restaurants, theaters, retail and cultural attractions,” Don Welsh, Choose Chicago President and CEO, says in the release.   Choose Chicago’s regional advertising campaigns delivered more than $325 million in influenced direct visitor spending during the city’s “need periods.” The eight-week winter and 12-week summer campaign, at a cost of $2 million collectively, resulted in an overall return on investment of $163 for every $1 invested. Targeted markets included Cincinnati, Detroit, Grand Rapids, Indianapolis, Milwaukee and St. Louis.    At the current rate of 43.6 million visitors annually, Chicago’s visitor industry is responsible for 128,000 jobs, $725 million in tax revenue and $12 billion in direct spending.   “I will continue driving toward my goal of 50 million visitors and I will continue to try and foster growth in this crucial industry, which creates jobs and positive economic impact in every single neighborhood in our city,” Emanuel says.   At a rate of 50 million visitors annually, the direct impact could increase to 155,000-165,000 jobs, $1.2-$1.3 billion per year in tax revenue and $14.7 billion in direct spending.

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