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Loop economy boosted by theatre and investment during fall and winter 2022

Posted  13 months ago  in  Trending, State of the Loop , Economy

8 MIN READ – Chicago Loop Alliance (CLA) released its new State of the Loop quarterly operations report on downtown activity, using a variety of data sources, in a similar fashion to the previous monthly operations reports released since July 2020. The report tracks pedestrian activity, parking volumes, hotel occupancy, number of office workers on-site, arts and culture, investment, and more. View the full Q4 report here.


Notable recovery activity in the Loop during quarter four (October 1 - December 31, 2022) included:

  • Arts and culture brought over 1,000,000 visitors to the Loop in quarter four
  • Theatre and performing arts drew over 700,000 visitors to the Loop and over $200,000,000 in direct economic impact
  • Public transit reached a pandemic level recovery rate high of 73 percent of 2019 levels
  • Major investment announcements in the downtown economy included Saks OFF 5th reopening, Vivid Seats headquarters, and Toys “R” Us opening inside Macy’s on State Street
  • Abundant holiday programming and shopping helped influence strong pedestrian activity in the Loop and the active retail corridor along State Street, reaching 85 percent of 2019 levels
  • Hotel occupancy reached 85 percent of 2019 levels
  • Parking rates continued to exceed pre-pandemic levels despite a slight dip, likely due to growth in public transportation ridership
  • An active retail corridor for holiday shopping along State Street

“The changing season and excitement of the holidays brought palpable vibrancy to the Loop this year, as well as a shift from viewing progress compared to pre-pandemic toward more intentionally projecting the current state of the Loop and its future, ” said Michael Edwards, President and CEO of Chicago Loop Alliance. “We look forward to showcasing the infinite sectors and industries that influence the Loop’s economy and success. From theatre to retail, and real estate development to education, the Loop is a dynamic mix of people, organizations and attitudes that support the progression of downtown’s future. We’ve shifted the format of our research to reflect and better serve that change as we intentionally report the current state of the Loop and project the district’s future."

Arts and Culture

As a primary driver of activity in the Loop, theaters have reported packed houses and excited crowds at shows throughout quarter four of 2022, despite an intense winter storm during the holiday season which caused a dip in show attendance. Theaters quickly recovered moving into the new year. Annual shows like Joffrey Ballet’s The Nutcracker at the Lyric Opera House and Goodman Theatre’s A Christmas Carol, as well as Broadway In Chicago’s The Lion King and Wicked remained popular attractions throughout the holiday season.

In addition to theaters, Art Institute of Chicago, the largest museum in the Loop, reported significant crowds for their special exhibition shows including the “David Hockney“ exhibit which drew over 128,000 visitors from the end of August through the start of the new year. Their “Language of Beauty” in African Art exhibit has already drawn over 33,000 visitors during the holiday season.

The Department of Cultural Affairs and Special Events’ (DCASE) Millennium Park Christmas Tree lighting and ice skating also attracted major crowds to the Loop. During warmer quarter four months, events like LUMA8’s Arts in the Dark parade on State Street attracted 50,000 people to the Loop.

“The fall and early winter brought a number of positive, engaging experiences throughout the Loop,” said Erin Harkey, Commissioner of DCASE. “The excitement of our beloved holiday traditions like the Christmas Tree lighting ceremony in Millennium Park, ice skating, and holiday markets brought shoppers and visitors downtown to experience all that our great city has to offer.”

“We loved welcoming so many returning and new guests back in the Loop at our beloved Christkindlmarket at Daley Plaza in 2022,” said Maren Biester Priebe, CEO and General Manager of German American Events.  “It makes us proud to represent not just German and American culture, but to also host international vendors with unique food items and handmade, artisan products. It means so much to our team that locals and visitors from all over the country - even world - get to experience everything that our beautiful hometown has to offer, including a visit at our holiday must-see event.”

CTA and Metra

In quarter four of 2022, the Chicago Transit Authority (CTA) reported the highest ridership spike since the beginning of the pandemic. The spike in ridership coupled with the highest number of days with over 900,000 passengers since the beginning of the pandemic signals the importance of public transportation in the wider economic recovery of the Loop.

While the agency continues to address concerns of safety, cleanliness, and punctuality of its services, passengers report crowded and packed trains during rush hour. In an effort to tackle this issue, the CTA has been continuing its roll out of a new fleet of train cars, in addition to increased security and cleanings.

Although slower to recover, Metra has also seen increased consistency of its ridership with recovery rates hovering around 37 percent of 2019 ridership.



In further news, City Council recently announced its planned renovation of the Van Buren Street Metra station to modernize and update the station. Key improvements will include platform accessibility, signage and way-finding, and ADA improvements

Parking

Parking in the Loop continues to see a high demand as office workers, residents, and tourists visit the Loop for work and play. Holiday events, such as the State Street Holiday Market and Christkindlmarket, drew crowds to the Loop during quarter four. Single reservation style parking offers flexibility for Loop visitors in advance of and during the holiday season.

Still well above pre-pandemic levels, parking saw a dip in demand while other models of transportation, such as CTA and Metra, saw an increase. However, parking and driving remains a popular way for residents and tourists alike to get around the Loop.

Investment

Following the exciting quarter three Google Thompson Center announcement, crucial investment in the Loop continued to drive economic revitalization for Chicago’s central business district during quarter four. While several companies announced large investment decisions, business license data also reveals continued growth for the area. Quarter four was the second highest quarter for new business licenses in 2022. While one business can have multiple business licenses, the number of new licenses issued can speak to the amount of activity occurring at those businesses over a period of time.

Additionally, the pedestrian data highlighted in the following section of this report highlights activity levels on State Street in the Loop, a main retail corridor. On average, afternoons saw the highest recovery levels of pedestrian activity during quarter four, insinuating that impressions are led by more than office workers.

The holiday season attracted shoppers to the Loop as holiday themed pop-ups, like Christkindlmarket and the State Street Holiday Market. These pop-ups showcased small business owners from a wide array of backgrounds. The opportunity for diverse sellers and business owners to participate in the Loop economy is a key strength to the future of the area’s economic development.

"We are thrilled to see major companies like Google, Vivid Seats, Ferrero, and retailers like Saks Off Fifth making significant investments in the Chicago Loop in 2022,” said Michael Fassnacht, President & CEO, World Business Chicago.  “This is a clear testament to the boundless potential and unparalleled opportunities that Chicago offers to businesses. The collaborative efforts of key organizations like the Chicago Loop Alliance, the City of Chicago, and World Business Chicago have been instrumental in attracting and supporting companies that drive growth and create jobs for our residents. Our consistent, diligent focus on working with companies to help them understand and capitalize on the tremendous value that Chicago offers has resulted in the exciting news of these companies expanding and relocating in the city, and we anticipate many more similar announcements in the coming year 2023.”

Pedestrians

Pedestrian activity was crucial to the economic wellbeing of the Loop during quarter four of 2022. While an intense winter storm kept people off the streets toward the end of the year, the holiday season still saw spikes in pedestrian activity on State Street in the Loop.

Most notably, October saw the highest weekly averages for pedestrian activity on State Street in the Loop, but the week of November 7 saw the greatest pandemic recovery rate at 85 percent of 2019 levels.

 

Additionally, pedestrian activity on State Street in the Loop peaked on average during the afternoon from 2:00 p.m. to 4:59 p.m. This may signal that in addition to office workers, Loop shoppers, tourists, and other visitors are driving the Loop’s economic recovery.

“Coming out of the holidays, we were excited to see a 30 percent increase in traffic from both tourists and returning business professionals,” said Rachel Phipps, Store Director of Target on State Street. “In this coming quarter, we look forward to remaining the convenient destination point for commuters, students, visitors, and families in the Loop to bring joy to everyday life.”

Hotel Occupancy

Hotel occupancy in quarter four of 2022 remained high as the holiday season and downtown events brought Chicago residents and tourists to the Loop. The average occupancy rate for quarter four was 85 percent of 2019 levels which signify the sector’s strength and importance in the Loop economy. While bitter cold and snowy weather may have caused some interruption to holiday travel and stays, the hotel sector has anecdotally reported consistent occupancy throughout the end of 2022.

Moving into the new year, the hotel sector will continue to be a leader in the economic well-being of the Loop economy attracting tourists and residents alike to come experience a slice of downtown Chicago.

“The year ended well at our property after a strong leisure summer; we returned to a more business and corporate fall/winter, with average daily rates continuing to grow closer to 2019 levels,” said Pierre Giacotto, General Manager of The Blackstone Hotel, Autograph Collection. “December was not as strong as we would have liked due to decreased activity in the later portion of the month. Despite city efforts to remedy the perception of safety, many people are still wary. Overall, we would have liked to see more citywide conventions which bring us long-term international travelers, something we all missed in 2022.”

Office occupancy

Office occupancy remained on track with other large metros like New York and Los Angeles during quarter four of 2022.

Hybrid work schedules and increased flexibility makes this data point confusing at times. Actual individuals going into offices is higher than office occupancy data suggests, due to more inconsistency for in-person days as many workers come in less days per week than pre-pandemic.

With pedestrian activity in the Loop reaching 85 percent of 2019 levels during quarter four, it remains clear that other Loop industries are playing an increasingly critical part in the downtown recovery while office recovers more slowly at around 50 percent.

Additionally, the holiday season at the end of 2022 may have meant that many office workers spent less days in the office than during other quarters.

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