Chicago’s hotel occupancy rate now stands at 7 percent, with the city suffering the same fate — if not worse — as the hospitality industry nationwide.
The week ending April 4 saw a slight uptick in the local occupancy rate, from 5.9% at the end of March, according to the latest figures from hotel research firm STR.
That is likely attributed to the city’s aggressive move to buy thousands of empty hotel rooms in order to house people who have tested positive for or been exposed to the coronavirus. The move by Mayor Lori Lightfoot is expected to involve over 2,000 hotel rooms, and is meant to ease the pressure off hospitals that are dealing with the pandemic.
The city will pay $175 for each room, far above the latest average daily rate, which STR said stands at $108.91. The plummeting room rates and emptying-out hotels are the byproducts of a city and state that remains under a stay-at-home order through April, with all nonessential businesses shuttered.
Across the country, hotel occupancy rate sank to 21.6 percent, STR reported, a nearly 69 percent drop from the same time last year. The rate for the last week of March was at 22.6 percent.
Other top 25 markets in the U.S. are similarly struggling: Occupancy fell on average to 19.4 percent, down about 75 percent from 2019.
Comparing the latest Chicago figures to the same period last month shows the swift decline. For the first week of March, the occupancy rate stood at 56.1 percent, though the virus had not yet slammed into the city.
Late last month, hotel investor and developer Oxford Capital said it was designating over 1,000 hotel rooms from five of its properties for the city’s program to house Covid-19 patients. The list includes Hotel 166, Hotel Cass, Hotel Essex, Hotel Julian and Hotel Felix.
Write to Alexi Friedman at af@therealdeal.com