Hotel industry fighting for survival amid pandemic

As 2021 begins, the hotel business is fighting for survival.

The Saint Jane, Moxy, Sheraton Grand, Chicago Athletic Club and even the famous Palmer House are just a fraction of local hotels closed right now.

"You see a lot of hotels, especially in the downtown area, that are suspended right now. I think it gives you a sense of what the permanent damage could be," said Michael Jacobson, President and CEO of the Illinois Hotel and Lodging Association.

Jacobsen says a third of Chicago hotels are currently closed. The fear is that 1000 out of the 1500 in the state could go out of business for good.

Many of them are not the big chains, but mom-and-pop places.


"It’s not the major corporations that are hurting because of these closures, it’s really your neighbors. These local Illinoisans that are struggling to survive," said Jacobson.

This could mean the loss of many jobs. Normally, the Illinois hotel industry supports 292,000 jobs. 
"Currently, over a third of all hotel workers are still out of work. The question just becomes, ‘How quickly can hotels get back to hiring their colleagues?’" said Jacobson.

And the pain spreads beyond hotels.

"It negatively affects the mag mile. It negatively affects the city of Chicago, the state of Illinois and the Midwest," said Kimberly Bares, President and CEO of The Magnificent Mile Association. 

Along the Magnificent Mile, empty hotels mean far fewer people shopping, dining and showering the area with cash.

"Getting hotels back up and functioning and getting them to full capacity- it’s critically important to the health of our district," said Bares.

The industry says one reason for all the hotels closing is they’ve been left hung out to dry by the city and state.

For example, Jacobson says a state grant program said to prioritize hotels gave money to one in eight applicants.

"What was supposed to be a critical lifeline to get us through these difficult months, many people came out of it empty-handed," said Jacobson.

At the same time, hotels continue paying property taxes even if they’re closed. Some downtown spots cough up more than $30,000 a day, $11 or $12 million a year.

So if hotels close, the industry asks, where do cities and state make up the money?

"If it weren’t for the hotel tax revenue, each Illinois household would pay $1600 more in taxes each year," said Jacobson.

Before it gets so dire, Jacobsen believes the industry can make a full recovery after a few painful years.

In part thanks to vaccines, but also because of all Chicago has to offer for visitors.

The question is: how many hotels can survive until then?