Chicago has been one of the hottest U.S. hotel markets this year, especially on the heels of a strong summer.
As of September, only San Francisco has outpaced Chicago in year-over-year, revenue-per-available-room change among the top 25 markets. RevPAR and occupancy have grown year over year in each month of the year, and the same has been true for average daily rate with the exception of March.
Since May, the market has seen double-digit, year-over-year growth in RevPAR, including increases of 20% and 16% in June and July, respectively.
Those were the two months North America played host to 104 soccer matches for the 2026 FIFA World Cup. Despite being the third-largest city by population and the fourth-largest city by hotel room count, Chicago was not one of the 11 U.S. host markets.
Then-Chicago Mayor Rahm Emanuel pulled the city out of consideration in 2018, citing “uncertainty for taxpayers” and “FIFA’s inflexibility and unwillingness to negotiate” as reasons for his decision.
Based on the results, that was a good call.
Host markets struggled to capture long lengths of stay, booking windows remained short and hoteliers were dismayed by FIFA pulling room blocks just months ahead of the tournament’s kickoff. Group and business travelers sought out non-hosting markets to avoid high rates, which benefitted markets such as Chicago.
The market hosted the ASCO Annual Meeting (American Society of Clinical Oncology), the ALA Annual Conference, the IFT FIRST Food Expo, the NAACP National Convention and the NCSL Legislative Summit this summer, with the five events accounting for more than 80,000 attendees.
“Chicago … is the third-largest city in the U.S., and that means it was the largest city in the U.S. to not participate in the World Cup, and I think that allowed a number of large conferences and citywide events and business as well that would have held events in other World Cup host markets to take a look at Chicago and then decide to stay there,” Didio Pequeno, director of hospitality market analytics for the Northeast and Midwestern U.S. at CoStar Group, said on the latest episode of the “CoStar News Hotels” podcast.
Ryan Ori, senior staff writer covering the Chicago market for CoStar News, said the overall health of the city’s commercial real estate market “differs a lot” depending on the specific location. This is also the case across each real estate sector.
While the hotel industry in the city is performing well this year, there has been a lack of investment interest, Ori said.
“There seems to be a disconnect between the strong fundamentals … in recent months and the longer term outlook from investors,” he said. “Some of the same factors, interest rates and other things have also affected pricing in other types of buildings.”
For more from CoStar’s Pequeno and Ori, listen to the podcast embedded above.
Source: www.costar.com
