Hotels struggles due to COVID-19 ahead of Labor Day weekend, causing concerns for industry's future

Tourism brings in about $15 billion a year, according to the Chicagoland Chamber of Commerce
CHICAGO (WLS) -- Tourism is big business in Chicago and is usually a hot destination on Labor Day weekend. Before the pandemic, hotel rooms in the city would be nearly 90% full.

This year that number is sharply down and it's raising questions and concerns about the hotel industry's future.

Buckingham Fountain, Millennium Park, and the Chicago River Walk, which would normally be packed, are quiet.

"With Labor Day coming up, we're hoping for a little bit of spike," said Nilesh Pandey, with Hyatt House & Hyatt Place Chicago Medical / University District. "We don't think it is going to be as strong as it was last year."

Pandey is the general manager of the brand-new hotel that was once the Cook County Hospital.

"We're hoping for the best," she added.

Like every hotel around the city, they're eager for customers to return.

"Hotels are still struggling just to survive. For a hotel to break even, we need 50% occupancy," said Michael Jacobson, President & CEO of the Illinois Hotel & Lodging Association.

Last week, the Hotel & Lodging Association reported the national occupancy rate was 48%. Urban markets dropped to 38% and Chicago was even lower at 20%.

"It's dire straits and I think you're starting to see more and more owners struggle just to pay their basic property loans and property taxes," Jacobson said.

Chicago hotels depend on conventions and meetings for 50% of their business, but with everything canceled, the impact is widespread, he added.

He also said one in four hotel owners across the nation are defaulting on loans or behind on payments.

When it comes to employees, four of 10 are not working and a lot of it has to do with the fact that only 38% of Americans are likely to travel by the end of the year.

However, there may still be hope for the long-term.

"It may not be the same as it was before, I think things will change, but this industry will take off again, will grow again, as soon as we get a vaccine," said Jack Lavin with the Chicagoland Chamber of Commerce.

Hotels around the city say they are ready to book those visitors because their future depends on it.

"If hotels fail, there will be lasting consequences for decades to come for the city of Chicago and state of Illinois," Jacobson said. "That's why we just need to be able to hold on. Travel will bounce back. People are going to come back to Chicago."

The president of the Chicagoland Chamber of Commerce says every year tourism brings in about $15 billion.
Copyright © 2021 WLS-TV. All Rights Reserved.