Chicago Hospitality Market Report

Mixed demand and new supply test hotel strength. Chicago beat expectations in 2025 as stronger leisure and transient business travel offset softer group demand, driving the nation’s third-largest occupancy gain. All service levels saw occupancy rise by over 100 basis points, supported by firmer upper-end demand and limited-service rooms taken offline for renovation or redevelopment. A larger delivery slate in 2026, however, may keep occupancy flat, even as Chicago is set to post the strongest ADR growth among markets not hosting World Cup matches. Faster supply growth in the far south suburbs and around O’Hare Airport will likely keep pressure on local hotels. Elsewhere, lighter deliveries in the CBD and affluent northwest suburbs should sustain outperformance, where demand held up better last year. Chicago’s new ordinance requiring monthly reporting from short-term rentals may also curb noncompliant listings and modestly support traditional hotels near the Loop and the Magnificent Mile.