Chicago Sets New Tourism Record

- In the summer of 2025, Chicago hotels in the Central Business District achieved over 3.56 million room nights, an increase of 4.3% from 2024, surpassing the pre-pandemic record set in the summer of 2019. This surge in leisure travel, with 2.5 million hotel rooms occupied by these visitors, represents an 11.2% increase compared to the previous year. - Despite record-breaking hotel bookings, profitability for hotel owners has been challenged by rising costs of labor and materials, in addition to property tax increases. For instance, average revenue per available room (RevPAR) in downtown hotels saw a decrease of nearly 4% in June and 7% in August of 2025 compared to the same months in 2024. - The Midwest hospitality market is showing resilience, with a 3.3% year-over-year increase in RevPAR in the first quarter of 2025, outperforming the national average. Chicago led other urban markets in the Midwest with a 4.0% increase in RevPAR during the same period, with hotel occupancy reaching 66%. - From a real estate investment perspective, the Midwest multifamily market is positioned for strong performance due to limited new construction and high demand. The region's multifamily inventory has grown at a slower pace than the national average, and it currently has the lowest percentage of inventory under construction compared to other U.S. regions. - In early 2026, a 42-story, 332-unit apartment tower at 73 E. Lake St. was sold for $126.1 million, or approximately $380,000 per unit, setting an initial benchmark for multifamily property values in downtown Chicago for the year. This comes as the city's multifamily construction pipeline is at its lowest point since 2012, with vacancy rates projected to be well below the long-term average by the end of the year. - The city's tourism not only impacts hotels but also drives demand for short-term rentals, particularly in neighborhoods near major event venues like Grant Park, such as the Loop, South Loop, and River North. This increased demand can lead to higher rental income for property owners in these areas, especially during major festivals. - The Chicago hotel development pipeline includes 10 hotels currently under construction, which will add 1,005 rooms to the city's inventory. A significant portion of these new developments are concentrated in the Central Business District and are classified as upscale properties. - Overall, Chicago welcomed an estimated 55.3 million visitors in 2024, a 6.5% increase from the previous year, generating $20.6 billion in economic impact. While these numbers show a strong recovery, they are still shy of the all-time high of 61.6 million visitors in 2019.