Market History and Forecast for Downtown Chicago 1920s Chicago had as many rooms as it does now though many closed by the 1960s From then new hotels were built pushing up rates Because of an increase in rooms occupancies have decreased both at peak and during recessionary periods ID: 761107
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Market History and Forecast for Downtown Chicago
1920’s Chicago had as many rooms as it does now, though many closed by the 1960’s. From then, new hotels were built, pushing up rates.
Because of an increase in rooms, occupancies have decreased both at peak and during recessionary periods.
What’s Changed? Chicago itself is doing as well as it ever has in occupancy. Rate is getting better.The Metropolitan area is huge. There are over 109,000 rooms in the metro area. Chicago CBD has 39,000.Historically, Chicago sent over 500,000 rooms into the suburbs per year, or around 120 days.Now it’s less than 100,000, or 10-20 days.
Changes in the Traveler People now stay where they want to.Corporations are more flexible There are way more rooms to choose fromThe consumer is more informedThanks primarily to the internetThere are more travelersConvention has stayed the same, but they’re a smaller percent (used to be 60%, now 45%). People don’t always stay in the HQ hotel anymore.Leisure is a larger percentage (used to be 10% or less, now it’s 15% and growing)
Regional Markets
Why do we think Chicago is going to lose occupancy? It’s all room count.We’re going to add 20% more rooms to the supply in the next 5 years.Demand is still going up, but not fast enough.
Chicago Forecast 2012-13 was the peak of the current cycle. Winter sent Occupancy and Rates down Q1 2014.Supply will take time to be absorbed.
W eekly dataTuesday is the highest rate day, Saturday is the highest occupancy day. Tuesday is usually corporate and group, at full rack and is less price conscious.Weekends are usually packaged rates and discounts.This change happened about 5 years ago during the recession.
Monthly Data Historically consistent. May-October are the busy months. November-April are slow.
This YTD is Rough AprilOccupancy down 2.5% ADR down 4.5%RevPAR down 6.9%YTDOccupancy down 4.9%ADR down 3.8%RevPAR down 8.4% Supply up 5.6% YTD Demand up 0.4% YTD
New Supply 2,800 rooms recently opened or about to open.Another 4,800 in the planning stage. More are added almost weekly at this point. A lot of conversion from old office buildings.Neighborhoods are starting to get their own hotels, generally boutique properties.
New, U C and Proposed Hotels Opened Early Planning Advancing