by: , Andrew Schroedter

Posted: Mar 18, 2021 / 10:12 PM CDT
Updated: March 18, 2021 / 10:12 p.m. CDT

CHICAGO – Chicago’s economy is slowly starting to thaw, shops are reopening, and people are returning to bars, restaurants, and more.

But the city’s hotels remain in a world of hurt.

“Our industry has been brought to its knees,” said Michael Jacobson, president and CEO of the Illinois Hotel and Lodging Association. “We were one of the first industries to be hit by the virus … and it is becoming increasingly clear that we will be the last industry to really recover.”

Occupancy is an important metric in the accommodation business. Amid the pandemic, that rate in downtown hotels fell from 74 percent in 2019 to 27 percent, according to research firm STR. The real price could also have been lower as it does not include closed hotels.

A total of 75 hotels closed at some point during the pandemic. And a third of those with a total of more than 13,000 rooms have not yet reopened, according to STR.

“It’s so heartbreaking how many thousands of people it affects,” says Jacobson.

The picture might deteriorate before it improves. More than 55 percent of hotels in the greater Chicago area have defaulted on loan payments, a sign that real estate may be scarce. By comparison, according to New York-based Trepp LLC, at this point last year only 2 percent of hotels were more than 60 days behind with a loan payment.

However, there are glimmers of hope for the industry.

A new hotel, the Sable on Navy Pier Chicago, recently opened. And experts say the more restaurants and bars welcome more people and events like concerts and baseball games, the more the city’s hotel assets will improve.

“The summer months will be very good because they are solid free time,” says Bob Habeeb, owner of the Sable Hotel. “And then… September [will be] the next test point in our recovery. “

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