Chicago Bets On Hotel Tax Increase To Stay Competitive In Global Tourism Market: Here’s What Traveler’s Need To Know

Wednesday, July 16, 2025

Chicago, a vibrant cultural, business, and visitant destination successful nan U.S., is looking to play a crippled of drawback up among world visitors successful nan tourism and meetings market. Tourism leaders successful nan city, led by Kristen Reynolds, president and CEO of Choose Chicago, are pushing for a caller edifice surcharge to money nan statement of nan Chicago Tourism Improvement District (CTID). The projected 1.5% surcharge, to beryllium added to room rates astatine hotels pinch 100 aliases much rooms successful a defined geographic area, would bring Chicago’s already precocious edifice taxation complaint to 18.89%. The edifice taxation hike isn’t a arguable summation either contempt nan already precocious costs of nan edifice tax, but keeping Chicago’s tourism manufacture successful nan crippled pinch different awesome American cities—including different U.S. cities that person yet to subordinate overcharging tourists–especially erstwhile it comes to world visitors, and continental-sized conventions.

The caller surcharge arrives astatine a clip erstwhile tourism is playing a overmuch much salient domiciled successful nan economy, erstwhile nan recreation and hospitality businesses are grappling pinch awesome changes successful nan behaviour of visitors and nan world competition. With a 17.39% edifice taxation already successful place, nan 1.5% surcharge would push nan complaint conscionable awkward of nan 20% period that manufacture figures person said is simply a travel ligament that would apt thrust distant immoderate visitors. But Chicago’s tourism stakeholders are hopeful that nan summation will alteration nan metropolis to support gait pinch increasing title from different awesome U.S. destinations, including Orlando, Las Vegas and New York, which are each vying for large conventions, business events and world travelers.

WHY CHICAGO DESERVES THE TAX HIKE: COMPETITIVE EDGE AND VIABLE FUNDING

Chicago has agelong been 1 of nan premier leisure and business tourism destinations. The metropolis drew 55.3 cardinal visitors successful 2024, which was up 6.5% from nan twelvemonth before. A important summation of world visitorship was besides seen pinch complete 2 cardinal world visitors, exceeding nan figures of 2019 for nan first time, signaling a 10% year-on-year increase. The tourism manufacture is an economical champion successful Chicago, pumping billions of dollars into nan system and providing employment to thousands of workers. The city’s recognizable landmarks — Millennium Park, Navy Pier, Art Institute — and its elite nutrient and portion scene, lively nightlife and rich | history bring visitors by nan millions each year.

Yet moreover pinch that beardown showing, Chicago has faced increasing title from rival locations, particularly for those ample conventions and world events. Chicago has struggled for years to person an world profile, peculiarly aft a authorities fund standoff successful caller years led to nan shuttering of a number of nan city’s overseas tourism offices. This trading and outreach void successful move has made it much difficult for Chicago to enactment competitory arsenic a destination for awesome world events and conventions that, successful turn, person go an progressively lucrative root of business for nan section economy.

The edifice taxation summation will supply overmuch needed boost to nan ailing tourism industry. Most of nan money would spell to trading and sales, including re-opening world offices and backing home trading efforts to rebuild Chicago’s image. Their dream is to respire caller life into Chicago’s image arsenic a world tourer hotspot, tie section destination events that juice up edifice stays (like nan Democratic National Convention) which require large bid fees, and make a connection astir nan Windy City’s humility connected nan worldwide stage.

Restoration of Chicago’s International Focus: Marketing and Sales Driven

The money raised from nan surcharge would beryllium spent to re-open Chicago world tourism offices and supplement income and bidding of awesome arena activities, said Michael Jacobson, president of nan Illinois Hotel & Lodging Association. For almost a decade, Chicago’s world beingness has waned because nan metropolis has had 0 successful costs to marketplace and waste overseas, and this caller surcharge would supply nan costs needed to reside that.

The money would besides beryllium utilized to compete for large events, including conventions, conferences and world sports events. Jacobson points to competing cities that are providing rate to pull those events, saying it is imperative that Chicago person nan fund and nan elasticity to bid against those different cities. In nan lawsuit of nan DNC, for instance, Chicago had to put down a $1 cardinal connection conscionable to beryllium put into consideration, and should they triumph nan bid, location will inevitably beryllium much costs that follow.

The projected surcharge will alteration Chicago to person immoderate of nan resources it needs to compete successful this area. The second is not only meant to bring much conventions and awesome events to nan city; helping nan city’s tourism infrastructure — hotels, normal centers and their services — support gait pinch nan expanding demands of nan world market.

Opportunities and Challenges for Tourism: The Post-COVID-19 Era of Economic Rejuvenation

The connection comes arsenic nan tourism industry, successful Chicago and beyond, is grappling pinch nan complications of returning aft nan pandemic. The world tourism assemblage has been deed difficult by COVID-19 and betterment is underway, pinch a notable displacement successful nan measurement group travel. A batch of travelers besides are being much observant pinch their money, and immoderate are gravitating toward destinations that connection value, elastic recreation policies and a attraction connected wellness and safety. For Chicago, nan predicament facing nan metropolis is not simply really to woo visitors backmost but besides really to measure itself arsenic a safe, enticing and unsocial destination for everyone from world visitors and business travelers to families and civilization hounds.

Some of these issues Chicago has overmuch much successfully handled successful caller years. Its push to promote home tourism, displayed successful specified events arsenic nan Taste of Chicago and Chicago Blues Festival, has brought much visitors here. What’s more, newer attractions — including a rejuvenated waterfront and an expanded normal halfway — are giving travelers reasons to return. It has been a successful undertaking frankincense far, however, occurrence tin only proceed and beryllium built-upon pinch sustainable backing — and that is precisely what nan projected summation successful nan edifice taxation intends to achieve.

On nan Street: Finding nan Sweet Spot betwixt Tax Hikes and Customer Service

Although nan 1.5% surcharge of room rates is expected to bump up Chicago’s edifice taxation to nan highest among nan nation’s apical normal destinations, manufacture leaders constituent retired that maintaining nan taxation beneath 20% is basal for preventing it from becoming a deterrent to visitors. It’s crossing that statement complete nan threshold, you mightiness push travelers to a destination that’s cheaper to spell to, pinch little tax, Jacobson said. But arsenic agelong arsenic Chicago tin clasp connected to an affordable taxation complaint and beryllium capable to supply bully services, location are expectations nan metropolis tin build up its tourism manufacture from coming levels.

If that nan taxation is passed and nan spending run is successful, it could greatly effect nan city’s expertise to bring successful much world events and visitors — but it will beryllium important for Chicago to support nan correct equilibrium betwixt nan added taxation and nan value of acquisition it tin committedness to visitors. In doing so, Chicago tin proceed to beryllium a starring metropolis successful some leisure and business travel, and thief guideline nan way guardant for post-pandemic travel.

Conclusion: One Small Step for Chicago’s Tourism Future

Chicago’s projected 1.5% summation successful edifice taxation whitethorn sound for illustration a mini summation connected nan look of it, but it is an basal portion of nan city’s scheme to enactment competitory successful nan world citysharking crippled that is tourism. By scaling up trading and event-bidding investments, Chicago intends to leverage its existent strengths for broader world appeal. The metropolis needs to place caller ways to separator past nan title truthful betterment tin travel successful nan tourism manufacture near down by nan pandemic. This add-on could beryllium nan very point needed to support Chicago astatine nan apical of nan database of places to beryllium for decades to come.