Lollapalooza expected to deliver a big weekend for Chicago hotels

Lollapalooza concert goers are expected to fill downtown hotels this weekend, and a busy summer fueled by a string of Soldier Field concerts closes the tourist season. Taylor Swift as well as mega-events like Beyoncé and NASCAR Chicago Street Racing. However, hoteliers still trying to survive the COVID-19 crisis say Lollapalooza may be the most important event.

“Summer has been a really successful or failing time for Chicago hotels, but Lolla is a blast, always a blast,” said Robert Habeeb, CEO of Maverick Hotels and Restaurants, owner of the 223-room Sable in Navy. Dock. “And Lolla crowds spend a lot of money.”

The four-day Grant Park festival kicks off at noon on Thursday and will make headlines with the likes of Kendrick Lamar, Billie Eilish, Lana Del Rey, Thirty Seconds to Mars and the Red Hot Chili Peppers. Chicago tourism officials said last year’s event attracted nearly 100,000 people each day.

A great summer doesn’t mean Chicago hotels don’t have to worry. Some have faced foreclosures during the COVID crisis, and business travel is still significantly lower than it was before 2020. But combined with the return of convention goers to McCormick Place and other local venues, a healthy tourist season provides at least an apparent rebound.

CEO of The Prime Group and 208 S. LaSalle St. “Overall, the market in Chicago is almost back to 2019 levels,” said Michael Reschke, developer of The LaSalle Chicago, a 232-room hotel in . It’s reached pre-COVID levels, but leisure travel has made up for it and Lolla is always a strong weekend.”

The only real concern hotel operators have on Lollapalooza weekends is the weather.

“We always pray that it doesn’t rain, because there’s nothing worse than people returning to the hotel in muddy shoes,” Reschke said.

Select Chicago president and CEO Lynn Osmond said that in the first half of 2023, total hotel room demand for Chicago was 4.98 million room nights, 18% more than in 2022, and almost 90% of demand seen in the same period of 2019. he said. The official tourist agency of the city.

“The first half of the year has been strong for our hotels and the entire tourism industry, thanks in part to meetings and events across the city, including these concerts and some record-breaking meetings at McCormick Place,” he said.

Swift kicked off June with three sold-out shows. Thousands of Swifties flocked to downtown hotels, and things didn’t slow down. According to Select Chicago, monthly hotel room demand hit 1.11 million, raising the overall occupancy rate to 80.4%, the highest level since the start of the pandemic.

“We’ve seen the Taylor Swift impact across the country, and it’s been remarkable,” said Brian Arevalo, senior vice president of HVS, a hospitality industry consultant. “The Eras Tour pulls the numbers we usually associate with the Super Bowl or World Series.”

Swifties, other concertgoers and tourists alike seem eager to open their wallets, he added. They pay higher wages than ever before, and this helps make up for the slowdown in business travel.

Select Chicago data shows hotel revenue for the first six months of 2023 totaled a record $1.12 billion, up 24% from last year and slightly higher than the same period in 2019.

Final July occupancy and revenue figures have yet to be released, but hotel operators say events like NASCAR, held on the lakeshore over the 4th of July weekend, should result in another strong month. Habeeb said that the NASCAR race may have discouraged some potential visitors who often travel to Chicago for the Fourth, so it might work better on a slower weekend, particularly as racers are more likely to prey, unlike the big-spending Swifties and Lollapalooza entrants. bargain outside the city.

“It was a crowd that was willing to pay a lot of money to race but also go out to stay in the suburbs,” he said.

Attendees at meetings or other group gatherings are another element of support for Chicago hotels, and they are returning. According to Select Chicago, demand from these visitors during the first half of 2023 totaled 1.56 million room nights, 28% more than in 2022 and 92% of the level seen in the same period of 2019.

Cynthia McCafferty, a spokesperson for the Metropolitan Pier and Exhibition Authority, the municipal corporation that owns McCormick Place, said many events in 2023, including the American Library Association’s six-day conference in June, attracted much larger crowds than last year. It breaks attendance records in 2019, as does the American Society of Clinical Oncology, which holds its annual meeting in the first week of June.

“Taylor Swift gets a lot of praise, but it has also helped that we have tens of thousands of oncologists here,” he said. “Not just Swifties.”

Arevalo said business travel remains the missing piece for the hotel industry and may not fully recover if companies hold online meetings via Zoom or if other services decide that some face-to-face meetings can be replaced.

Habeeb estimates that business travel remains at around 80% of pre-pandemic levels, but said he is confident companies will eventually get people back on the road.

“Some people believe this is the new normal, but I’m not one of them,” he said. “I tend to believe this is an industry that has been slower to respond.”

But Reschke said the rise of remote work is a beacon of hope for hotels. People are more free to travel and do business from other cities, and since the pandemic, they have noticed more guests mixing work and leisure. These “pleasure” travelers sometimes bring their families, work from the hotel for a few days, and then take some time off.

“You can work and have a nice five-day weekend in Chicago,” he said. “I think this business will stay here.”