Chicago Continues Hotel Expansion Despite Downturn

Despite dramatic visitation drops during 2001's last quarter, several new hotel openings and expectations of stronger convention attendance have sparked some optimism about Chicago's immediate future.

That's certainly the case at the Sofitel Water Tower, a 415-room new property set to debut in June. "After a year and a half of really slow activity, I believe our debut and the return of stronger travel patterns should coincide," said general manager Patrick Filatre explained. "And I am particularly encouraged by the volume of advanced interest and bookings we've received even though we are still months away from opening."

Property highlights Filatre cited include its 20 East Chestnut Street location, a block from Michigan Avenue, in close proximity to its namesake Water Tower landmark and being quite near the Rush Street entertainment district.

Additional amenities attractive to business travelers include high speed Internet access, spacious marble bathrooms with separate tub and glass-enclosed shower, three two-line phones with voice mail and a dedicated data line and a safe that easily accommodates laptops.

The property also features a dozen meeting rooms offering a combined total of more than 10,000 square feet of meeting space and a capacity to accommodate between 12 and 40 attendees in each room. The grand ballroom offers an additional 4,500 square feet and accommodates 330 attendees.

Another anticipated debut will come later in the year, or in early 2003, when the 226-room Baymont Inn and Suites opens at the corner of Rush and Ontario streets. There, promises Jim Abrahamson, president and COO of Baymont Inns & Suites, "The new downtown Chicago Baymont will provide a high-quality, cost-effective lodging option for business travelers. They'll particularly enjoy the convenience of our onsite meeting and conference facilities and our location just off Michigan Avenue." Other expected new hotels include a 385-room Hard Rock Hotel, a 357- unit Marriott Suites and a 1,600-room Adams Mark.

More than 1,295 rooms were added to Chicago during 2001, increasing total supply to approximately 29,000 rooms. Several major hotels opened, including a 455-room Embassy Suites, a 311-room Le Meridien Hotel, a 189-room Fairfield Inn and the 340-room Peninsula Hotel.

According to Ernst & Young, Chicago also is experiencing a significant amount of hotel renovation, with more than 10 hotels and 1,500 rooms currently undergoing or planning renovations. The largest of these projects is the $70 million renovation of the Hotel Inter-Continental in downtown Chicago.

As for travelers encountering the current scene, the atmosphere clearly is more receptive to the incoming business traveler than it has been in recent years, according to hotel consultant Ted Mandigo. "Take the time when booking Chicago rooms to search out discounts or upgrades," he said. "Such efforts will likely prove well worthwhile."

He also suggested now is prime time for locking in preferred corporate rates since prices and traffic should rise as the year moves closer to midpoint.

Though hotel occupancy dropped 8 percent during 2001 compared with 2000, much of the worst of the falloff occurred in the two-and-a-half months following Sept. 11. In fact, said Jim Reilly, CEO and president of the Chicago Convention and Visitors Bureau, "Last December's average hotel occupancy was actually 3.2 points higher than December 2000."

Also, according to an analysis by Ernst & Young, totals for 2002 are expected to rise to 65 percent compared with 2001's 62 percent. The report also predicts average room rates to increase to $115 per night. That's slightly ahead of $112 for 2001, but still behind the $117 registered during the boom year of 2000.

Lodging demand is expected to remain stable as attendees flock to the city's slate of conventions and festivals. Furthermore, the report states, the planned addition to the McCormick Place Convention Center will increase its size by more than 800,000 square feet, significantly enhancing what is already the largest convention facility in the United States at approximately 3 million square feet.

Other sources including analyst Ted Mandigo also said the new space will give McCormick more flexibility. "It will allow a major show to be operating while another sets up," Mandigo said. "That will eliminate the need to take dates off the calendar during knockdown and set-up periods."

Something of even more immediate benefit to the Chicago convention scene was the January debut of a new, dedicated busway linking the "Loop" with McCormick Place.

By pulling up unused Illinois Central rail tracks and laying down new pavement, the city now operates shuttle buses that don't have to contend with Chicago's often-challenging midtown road traffic and tie-ups.

Charter buses for convention and trade shows now bypass local traffic via a two-lane, 2.5-mile roadway that CVB officials said greatly decreases both travel times and busing costs. By the stopwatch, transit between Randolph Street and McCormick Place now averages eight minutes.

"Convention and trade show managers will continue to operate their own individual charter bus programs to downtown hotels," Reilly said. "The busway simply provides a quicker, more direct route for them between McCormick Place and downtown."

Work on a second phase of the busway currently is under consideration. Plans call for adding a connection that will cross existing rail tracks, providing direct access to McCormick Place's North Building and Lakeside Center.

Other likely future infrastructure improvements include the alignment of runways at Chicago O'Hare Airport. By eliminating crossover points and adding spacing between runways, O'Hare ultimately would be able to handle two landings and takeoffs simultaneously. By doubling the present one and one, the added capacity particularly would be beneficial in helping to shorten or eliminate weather or congestion-related delays.

Mandigo also predicted that improvements to transit links between O'Hare and Midway airports eventually will arrive. "Right now, bus connections between airports often get lengthy, frustrating and difficult," he said. "Studies are underway to explore the possibility of a rail link between the two airports."

Speaking of O'Hare, authorities in next door Rosemont are optimistic that a recent expansion of its Donald E. Stephens Convention Center to 840,000 square feet from 710,000 soon will succeed in attracting even more of the nation's larger trade shows.

Already one of the nation's top convention facilities—and Illinois' second biggest after McCormick Place—the new space will "broaden our eligibility for events we previously could not accommodate," according to a facility executive.

Available area now includes the 52,000-sq.-ft. Rosemont Conference Center and two ballrooms. The prime ballroom accommodates 4,000 attendees theater style and 3,200 for banquets.

Of course, as Rosemont authorities continually stress, there's much more on hand than just modern and sizable convention space. Rosemont also boasts the 18,000-seat All State Arena and 4,300-seat Rosemont Theatre.

Rosemont has 14 hotels with 5,687 rooms and a location at the intersection of critical Illinois highways. And, all of these amenities are just a three-minute walk from rapid transit, which can whisk passengers to the heart of Chicago in just 20 minutes.