Downtown hotels enjoyed a lucrative week during the Democratic National Convention, with occupancy levels as much as 20% higher than the same period last year and rooms rented at much higher rates to the tens of thousands of visiting delegates, lobbyists and other convention attendees, according to data from CoStar, a real estate analytics firm.
“It’s economics 101. If demand goes up, prices go up,” said Jan Freitag, national director of hospitality analytics at CoStar. “These are very healthy numbers, so I think it was a very successful week, at least from a hotel perspective.”
Mayor Brandon Johnson and Gov. JB Pritzker have been taking victory laps over what most observers regard as an effective convention, and even though many local restaurants saw huge revenue cuts last week, the solid business done by the city’s hotels, especially ones downtown and near the United Center, could bolster the case for chasing after the 2028 conventions.
Winning the right to host a 2028 convention would provide another boost to downtown business activity and the city’s reputation, especially if it takes place during the dog days of August, said Maverick Hotels and Restaurants CEO Robert Habeeb, the proprietor of the 223-room Sable at Navy Pier and several other Chicago hotels.
“The last week in August is a dicey week, it’s usually hit-or-miss for hotels based on the weather and other factors, so it was really good to have last week locked in,” Habeeb said.
Hotel room occupancy in Chicago’s central business district increased between 9% and 20% on the days of the convention when compared with the same time last year, according to CoStar data, with the largest boost happening on Aug. 18, the night before the DNC began.
The true windfall was the amounts per night that hotels were able to charge thousands of eager convention goers. The average daily rate at the same time last year hovered at $200, but last week hit a high of almost $375 on Aug. 20, the second night of the convention, a hike of more than 76% over the same day in 2023, CoStar found.
“Last week was what we call a citywide (event), and when you have a citywide, people are going to stretch rates,” Habeeb said.
Milwaukee hotels saw an even bigger boost during the Republican National Convention in July, Freitag said.
“I was surprised to learn that, but it could be explained by Milwaukee being a smaller market and not having as many rooms available,” he said.
The Chicago convention didn’t get good reviews from all downtown businesses. Office workers, worried about street closures, long wait times and possible protests, mostly stayed away from the Loop last week, depriving restaurants of their lunchtime regulars. Some restaurants reported daily revenue declines of between 50% and 70%.
Habeeb said one problem was that conventiongoers stuck close to the United Center, the McCormick Place Convention Center, and their downtown hotels, leaving little extra business for other restaurants.
“I know restaurants weren’t happy,” he said. “But banquet spaces did very well. Our event spaces were booked solid the whole week.”