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Hotel occupancy in the Loop nearing full recovery as summer winds down

Posted  9 months ago  by  Daisy Ruiz

Press contact: Ariella Gibson | Marketing and Communications Manager, Chicago Loop Alliance | Ariella@ChicagoLoopAlliance.com | 708-543-4002

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CHICAGO—Today, Chicago Loop Alliance (CLA) released its August report on downtown activity, using a variety of data sources to track operations during COVID-19, as it has done monthly since July 2020. The report tracks COVID-19 positivity rates, pedestrian activity, parking volumes, hotel occupancy, number of office workers on-site and more. The data this month indicates that hotel occupancy reached a record high for four consecutive months at nearly complete recovery; public transportation exceeds halfway mark; and continual progress for office occupancy. View the full August report here.

The dog days of summer, coupled with major events and improved business travel sent yet another encouraging boost to the Loop economy. Hotel occupancy’s new high of approximately 90 percent compared to 2019 levels shows that visitors are a key factor in the changing landscape of the Loop. Pedestrian rates seem to also be driven by tourists with sustained impressions over 1 million each week, and major events like the Chicago Air and Water Show and Sundays on State provided additional activity despite rainy weekends throughout August. Additionally, CTA ridership shows promise as major events and holidays encouraged use of public transportation, albeit stifled by continued issues effecting rider experience. As fall begins, we expect CTA ridership to continue to improve with students traveling between Loop and neighborhood campuses; workers increasingly returning to the office; and holiday activities bolstering the energy of the Loop.

“Chicago was bustling with major events, theatre, attractions and all the best elements of summer in August,” said Michael Edwards, President and CEO of Chicago Loop Alliance. “Visitors enjoying everything that a thrilling downtown experience has to offer contributed to the intense rebound of hotel occupancy for a record fourth straight month. While the Loop continues to see progress in key areas around tourism, our office industry still lags behind other metrics. We hope to continue to nurture that key demographic, as well as remain open to new strategies and sectors that will help create a thriving Loop neighborhood in this ever-changing environment.”

Hotel occupancy

Continuing the recovery trend seen this past spring and summer, hotel room occupancy in July breaks another recovery metric. At 90% of 2019 levels, this is the highest that hotel occupancy has been since February 2020.

Thanks to summer travel, a low COVID-19 positivity rate, and the full return of many downtown events, hotels are moving closer to a fully recovered sector. While the twelve-month average is 65% of 2019 levels, the average recovery rate for this summer and spring is 80%. This shows a spike in recovery for hotels as the weather has warmed and economic recovery has improved.

“Tourism and hotel occupancy are both returning to 2019 levels, which is great to see in Chicago,” said Edward De Croy, W Sales Executive of W Chicago – City Center. “For W Chicago – City Center, we’ve seen business travel as a bigger driver for the hotel due to its Loop location. In terms of meetings and events, it is evident that the corporate clientele is reaching 2019 levels as well. After the summertime, we’re looking forward to embracing the best time of the year and seeing more business and leisure guests coming back to Chicago!”

Office occupancy

In August, office occupancy continues to hover just below the 50% recovery mark as compared to 2019 levels. Because of hybrid work schedules, workers in the Chicagoland area continue to have more flexible work from home and in-office days. While recovery for office occupancy is expected to improve as the year progresses, recovery is not likely to reach full 2019 levels in 2022.

This recovery trend is on par with other large cities including New York and Los Angeles. In response to this nationwide trend, offices continue to adapt to the changing needs of office workers. Vibrant downtowns, with amenities beyond the workplace, as well as other perks attributed to working remotely, may be key in driving further recovery in this sector.

Pedestrian activity

Pedestrian activity on State Street in the Loop remained relatively high as compared to the rest of the summer. While activity took a slight dip in August, over one million pedestrians utilized State Street in the Loop each week.

An almost fully recovered hotel sector signals that tourism downtown is a primary factor boosting pedestrian activity in the Loop. Returning office workers and residents coming to enjoy downtown events are also helping to boost pedestrian activity. Pedestrian counts were on average highest in the afternoon which may signal that tourists, residents, and office workers are utilizing the streets at the same time.

“State Street is bustling again, with workers, tourists and locals enjoying all that the city has to offer during the summer, and Urbanspace is nicely situated to benefit from the activity,” said Remeka Sullivan, of Urbanspace Food Hall. “Lunch hour traffic in the hall continues to improve and you can feel the energy of workers collaborating over a meal, travelers taking a well-deserved break and friends catching up on the time they’ve been apart from one another. Diverse and unique food offerings, along with popular happy hour spot, Peregrine Club, are great additions to the Loop culinary scene and encourage visitors and workers to linger in the central business district.”

CTA ridership

In June and July, the CTA saw a consistent ridership rate of just over 50% of 2019 levels. Anecdotally, passengers report full train cars and buses, often with standing room only. In response to this level of ridership, the CTA is working to improve consistency of trains and buses to a pre-pandemic level.

As driving becomes more difficult due to an increased amount of traffic, public transportation is positioned to become a critical source of mobility for residents and tourists alike. As the summer comes to a close, the CTA has stated that it will continue to improve rider experience through increased safety protocols, improve consistency, and the roll out of modernized train cars.

Metra ridership

Metra ridership remains consistent at 34% of 2019 levels. Both June and July saw ridership at about 35% of 2019 levels, which is similar to the highest rate of recovery that the agency has seen since COVID-19.

Metra’s stagnated recovery may in part be due to its homogeneous ridership. While the CTA and parking are able to pull users from tourism, residents, workers and more, Metra primarily relies on suburban commuters coming to the city for work or events. With more flexible hybrid schedules, a large portion of Metra’s users are not commuting to the city as often. However, Metra continues to provide vital mobility services for it ridership base.

Parking reservations and garages
Parking in the Loop saw a slight downward trend in August. Due to beautiful weather, and the reintroduction of major in-person events, people may be opting to take other modes of transportation, such as walking, biking, scootering, or public transportation to allow for increased flexibility. In a departure from the last year, a low COVID-19 positivity rate may be making people feel safer using public transportation. Hybrid work schedules could also play a role in making single parking reservations a more popular choice among drivers who no longer require monthly passes for parking garages.

For those Loop workers who continue to return downtown, Chicago Loop Alliance has created a Back to Office Toolkit that can be found at LoopChicago.com/BackToOffice. The toolkit includes insider tips for working downtown in the Loop for those who never left, as well as those who are returning or want to stay in the know. Find useful information on how to safely get downtown; what’s new in the Loop; what the Loop looks like these days; lunch and happy hour spots; and more.

Chicago Loop Alliance invites people to share their experiences downtown on social media using #BackInTheLoop.

About Chicago Loop Alliance
Chicago Loop Alliance (CLA)’s mission is to create, manage and promote positive and inclusive programs that attract people to the Loop and accelerate economic recovery. CLA is a membership organization as well as the sole service provider for Special Service Area#1-2015, and the Chicago Loop Alliance Foundation produces public art projects and events. For more information, please visit here.