The welcome mat is out, and the guests are arriving— in droves. In 2016, 54.1 million visitors paid a visit to Chicago for the fi rst time in the city’s history. Over the next few years, that number is expected to rise even more, if Rahm Emanuel has his way. Since 2012, the mayor has stated his goal for driving tourism in his tenure, originally setting a target of bringing 50 million annually to the city by 2020; in 2014, he raised that benchmark to 55 million.
Early on, “we all thought it was a number we couldn’t achieve, but with the initiatives we put together, and the mayor’s support of building Chicago tourism, we found out rather quickly that we might be onto something,” recalls Ron Vlasic, regional vice president of Kimpton Hotels and a board member of Choose Chicago, the city’s CVB tasked with attracting the throngs of visitors.
Doing so hasn’t been without its challenges. In 2015, the estimated $7 million earmarked for Choose Chicago’s operations was frozen during a state budget stalemate, forcing the organization to lay off 28 staff members, close international offices and cut regular promotions that provided awareness for the city and its events.
While the money was eventually reinstated in 2016, the damage had been done. Choose Chicago lost some top-tier senior executives (like Don Welsh, former president and CEO, along with three other executives) and just as high-level conventions, including the Microsoft Ignite Conference. Coupled with ongoing violence in the city, underscored by a nongang-related shooting death at the Hyatt Regency McCormick Place last January, it all had potential visitors asking if it was a good idea to come to Chicago.
Yet, despite all of these issues, tourism is booming. In fact, Chicago enjoyed record tourism performance for the first three quarters of 2016 with room demand up 2.6 percent and overall visitation up 2.9 percent year to date.
The economic impact of those increases is huge for city tax coffers, as well as for the meetings and events planners, hoteliers, restaurants, tour operators and countless other businesses—small and large—that rely on revenue brought in by tourism.
“Any time you can put guests in beds and diners in seats, it helps the city and it helps the restaurant industry,” says Sam Toia, president and CEO of the Illinois Restaurant Association, which works closely with Choose Chicago.
The amped-up demand is also helping planners lock in long-term business again. Last year, CTC Destination Management started the planning process for 2018. “It shows that the marketing efforts that Choose Chicago is doing, and the investments that they’re putting into marketing our city, are really working,” says President Jillene Szostak, DMCP
And it’s not just the city that benefits. The state does as well. Chicago visitors pay sales taxes on purchases, which benefits Illinois, including helping to fund improvements to infrastructure and attractions that all residents can enjoy. So to skeptics that see tourism as just one big party, it’s actually “big business for the state,” says Cory M. Jobe, director of the Illinois Office of Tourism. In 2015 alone, the state tourism industry directly supported 10,820 more jobs (nearly 317,000 total) than in 2014, and state and local tax reached $2.7 billion. It would be remiss not to consider how Chicago tourism helped to contribute to these increases.
Drawing a Crowd
To reach the 55 million goal, Choose Chicago has been courting visitors in 10 surrounding states, including Indiana, Wisconsin and Iowa. This is where 75 percent of the city’s leisure visitors (a total of close to 50 million people) and 57 percent of business visitors come from. Then, “we’ve got to look further afield for those additional, incremental visitors,” says David Whitaker, current president and CEO of Choose Chicago who took over for Welsh on July 6, 2016.
The new strategy sees Choose Chicago reaching out to sophisticated city dwellers in Los Angeles, San Francisco, Atlanta, Denver, Washington, D.C., Boston and New York. Whitaker’s team uses social and digital media to frequently engage with those residents, targeting their specific interests, whether that’s the art scene, LGBT community, adventure travel or food, so they know “there’s a Chicago for them,” Whitaker explains.
In particular, attracting foodies has been a big objective, and the city—which Toia calls “the culinary capital of the United States”—has a lot to offer, given the collection of renowned chefs, Michelin star–awarded restaurants and a swath of unique neighborhood flavors. Events like Chicago Gourmet, Chicago Restaurant Week, the National Restaurant Association trade show, and the James Beard Awards (which the city started hosting in 2015) attract tens of thousands of attendees every year.
Whitaker also wants to double the number of international visitors coming to Chicago, which will help meet another of Mayor Emmanuel’s goal; that is, making the city a top five destination for global travelers. As such, Choose Chicago works with tourism and public relations professionals in the United Kingdom, Canada, Mexico, Japan and Germany, and has in-market support in China, to help the city tell its story. These professionals conduct sales, manage branding campaigns and participate in global trade shows like IMEX, IBTM and IPW to spread awareness.
International visitors hold special appeal because, generally, they stay longer and spend more dollars, bringing “fresh money into our economy,” explains Cory Fransway, CMP, CMM, DES, who frequently works with international associations as a strategic accounts director for Experient, a Maritz Global Events company.
And, says Jobe, besides enjoying the city, international visitors also like to “get out on the open road and really experience the heartland of America,” like exploring historic Route 66, President Abraham Lincoln landmarks and the noble Mississippi River, all of which benefits other communities outside of Chicago.
Also helping put Chicago on the world map have been high-profile events like the 2010 NATO Summit and 2016 Olympics bid, but Fransway says it’s the ease of flying into O’Hare International Airport, the multicultural nature of the city and its world-class attractions that really convince foreign groups to come here.
Finding the Pros in Conventions
It also doesn’t hurt to have McCormick Place as one of the leading and largest convention centers in the Western Hemisphere. When planners hold meetings here, attendance almost always grows, Fransway says.
In fact, a number of summits held at McCormick Place last year had record attendance, including the International Manufacturing Technology Show, which took place in September and drew more than 2,400 exhibitors (the high - est number in the show’s history) and more than 115,600 registrants, its third largest attendance.
News like this gets around, and is some of “the best advertising that you could possibly ask for,” says Whitaker. And that is helping the city real - ize another goal: booking 55 major conventions annually (to take place in future years). In 2016, the city hosted 31 major citywide conventions.
Targeting medium-size conventions (in addi - tion to the mega shows) is helping to fill in the calendar at McCormick Place. As well, special incentives, some aimed at drumming up busi - ness during nonpeak times, are also sweetening the deal. Thanks in part to labor concessions, the convention center can now also offer discounts on exhibit hall rentals. More than 60 area hotels are getting in on the promotions with significant price cuts for guest and meeting rooms, food and beverage minimums and Wi-Fi.
Hotels also are taking a creative approach to bringing in business by offering packages that secure convention blocks and encourage meeting attendees to add on shoulder dates at the same time. “If you’re a convention guest and you’re staying here for three days, we want you here for five days,” explains Dean Lane, general manager of Palmer House Hilton.
Some hotel general managers will even join Choose Chicago executives on “good old-fashioned sales calls” to ask association clients for their convention business, which is making “a huge impression” with people, adds Vlasic.
Build It and Guests Will Come
Of course, the growing swarms of visitors need somewhere to stay, which has spurred all kinds of hotel development over the past several years.
Eight new properties opened in the Loop, aka the central business district, last year, and Choose Chicago expects six more to open in 2017, including the Marriott Marquis Chicago at McCormick Place that will offer 1,205 guest rooms. Lodging Econometrics, a research firm based in Portsmouth, New Hampshire that tracks hotel projects, says a more realistic opening for the Marriott Marquis is 2019, given the size and scope of the project. Additionally, the firm expects 22 new hotels to open in the city in 2019 and beyond, all totaling 5,338 new guest rooms.
More rooms means the city can attract a bigger number of citywide conventions, which often need thousands of rooms at peak times when inventory can be scarce. Last September, the combined hotel occupancy rate for groups and leisure visitors was 86.6 percent, one of the best Septembers for occupancy in five years. Having additional inventory means “we’re not having to say, ‘We can’t find the room blocks, so we don’t have enough room’” for your group, says Whitaker.
However, the surge in guest rooms—7,240 total in just the last five years—is also making for “an incredibly competitive landscape” for hoteliers, says Lane. As of last November, the Chicago central business district had 122 total hotel properties offering 40,858 rooms. “It does make us much more marketable as a destination to have this additional inventory, but it’s going to be a tough go for the next three to five years” until more large conventions (which book five to seven years in advance) start coming in, says Lane.
In the meantime, the city is pushing hard to bring in more individual visitors to fill those gaps. “If we have 55 million visitors instead of 52 million visitors, we can beat that challenge,” assures Whitaker. In 2017, Choose Chicago expects meeting attendees to fill 2.6 million hotel room nights in future meetings and conventions.
The bonus for planners and visitors is they certainly have lots of options. “Our inventory of hotels in Chicago is second to none,” says Lane, adding that exciting recent additions like The Gray, LondonHouse, Hyatt Centric, Virgin Hotel and Conrad Chicago also preserve the city’s iconic architecture by repurposing existing buildings.
It’s in the Numbers
Not every city makes attracting visitors a priority like Chicago, reminds Vlasic, who’s experienced this first-hand running hotels in various metropolitan areas across the county. Lane believes that, given a larger budget, Choose Chicago could attract even more visitors since “there’s an incredible ROI on the money spent from a marketing perspective.” In fact, the return on investment for the CVB’s 2016 winter marketing campaign was $383 for every media dollar invested, far surpassing the industry benchmark of $99.64.
Even Choose Chicago’s earlier budget crisis in 2015 has a silver lining, and that is the “great acknowledgement and understanding of just how important tourism is” for jobs, revenue and the image of the city and state, says Whitaker, who credits Choose Chicago’s many partners like the Illinois Hotel & Lodging Association, Illinois Restaurant Association and Illinois Craft Brewers Guild for their vocal support of the industry.
As for reaching the 55 million milestone, industry pros say it’s a sure thing. “We will hit that goal, and I wouldn’t be surprised if the mayor came back and he said, ‘I want 60 million now,’” says Vlasic, laughing.
CHICAGO VISITORS AT A GLANCE
Here’s a look at Choose Chicago’s numbers for 2016— another banner year:
$1.32 billion Estimated Overall Impact of Major Meetings and Conventions
54.1 million Total Visitors Welcomed To The City, a New Record and an Inrease of 2.9 Percent From 2015
52.55 million Number of Domestic Visitors, Up 3.1 Percent From 2015
1.56 million Amount of International Visitors
11.9 million Business Visitors, an Increase of 2.1 Percent From 2015
916,888 Attendees Welcomed to Chicago by 31 Major Meetings and Conventions, 8 of Which Set Records in at Tendance
145,137 Jobs Supported by the Chicago Tourism Industry, a 3.3 Percent Increase From 2015 and 20,000 New Jobs Since Mayor Emanuel Took Office
2,505,207 Room Nights Booked for Chicago Hotels
40,947 Daily Rooms Avail Able After 8 New Hotels Opened in Chicago's Central Business District, an Increase of 4.2 Percent
$911 million Total Tax Revenue, a 2.2 Percent Increase
$2.28 billion Revenue Generated by Chicago's Hotels
$127.3 million Hotel Tax Revenue Generated