Chicago Hospitality Market Report
2023 Investment Forecast
Notable Recovery Gains Hit a Plateau;
Cross-Border Trades Boost Investor Sentiment
Improved travel aids fundamentals, but a long road ahead. Business and leisure visitation continued to progress last year, as O’Hare International Airport closed out 2022 with passenger volumes up nearly 20 percent from the prior period. Summer travel remains a bright spot for the hospitality sector in 2023, with festivals like Lollapalooza drawing roughly 100,000 attendees. Additional events, such as the inaugural NASCAR race in Grant Park, help boost RevPAR during the summer months by more than 30 percent above the annual average, a wider margin than in 2019. Nevertheless, despite hotel usage above the metro’s long-term mean, tourism levels are not expected to return to pre-pandemic norms until 2025, constricting the rate of recovery. This is reflected in Chicago’s occupancy rate remaining more than 550 basis points below the 2019 mark this year. Daily rates have shown more marked gains, but after an accelerated rebound during 2021-2022, softer consumer spending weighs on the pace of ADR growth, expanding less than 1 percent in 2023.