DNC fills Chicago hotel rooms, capping strong summer

Excitement over Kamala Harris’s top ticket is boosting last-minute hotel bookings tied to the Democratic National Convention, though occupancy levels at next week’s event may still be lower than expected.

The Democratic National Committee has signed contracts with more than 40 Chicago hotels, including the InterContinental Chicago Magnificent Mile, the Palmer House Hilton and the Sheraton Grand Chicago, party officials said. The hotels agreed to reserve thousands of rooms at contract rates through Aug. 7, but interest in the new candidate has prompted a surge in late bookings, and party officials say some hotels have decided to extend that deadline.

“We’ve seen a massive increase in interest,” said Ben Hardin, executive director of the Illinois Democratic Party. “It’s anecdotal, but there seems to be a new energy.”

So far, hotel operators say the convention hasn’t been a blockbuster event like Taylor Swift’s The Eras tour, which packed downtown hotels with big-spending concertgoers for three nights last summer.

“The DNC probably won’t be the total and utter failure that some predicted,” said Robert Habeeb, CEO of Maverick Hotels and Restaurants, which owns the 223-room Sable at Navy Pier.

Habeeb said the DNC’s use of rooms booked through its hotel “has been poor” and that it is now successfully renting out rooms reserved for the general public. “Maybe our expectations were too high,” Habeeb said.

But the event continues to generate significant demand, Habeeb said, and will likely help Chicago hotels end the all-important summer season on a high note.

Party officials expect to welcome 50,000 visitors, including delegates, dignitaries, elected officials, party members and media, for the four-day event that begins Monday at the United Center. The political convention follows the four-day Lollapalooza festival and other downtown mega-events such as the NASCAR street race in Chicago. Overall, the summer events have bolstered a still-fragile hotel market after the pandemic hit.

“Everybody loses money in the first quarter and in the second quarter you get close to breaking even, but summer is like Christmas, it’s when you become profitable,” Habeeb said. “And this summer is definitely going to be a record summer.”

Nabil Moubayed, general manager of the InterContinental at 505 N. Michigan Ave., said he is still working with the DNC. The convention has booked more than 80 percent of the hotel’s 792 rooms.

“We haven’t met our initial expectations yet, but the hotel is probably doing a little better than some of the others,” he said. “We’re 80 to 90 percent of where we thought we would be, which is not bad, and every day, every hour really, we’re in contact with the DNC housing officials.”

Even with thousands of convention attendees, the city’s hotels likely won’t be full next week, said Jan Freitag, national director of hotel analytics at CoStar Group, which tracks room occupancy.

As of August 5, 63.7% of hotel rooms in Chicago’s central business district were booked for Monday, the first day of the convention, with hotel occupancy reaching a peak of 70.3% on Thursday, when Vice President Harris will close the event with her acceptance speech.

“The numbers will definitely go up a few points,” Freitag said, but the final tally won’t be known until the end of August. “Then we’ll be able to see exactly what happened.”

Moubayed and other hotel operators remain concerned that ordinary tourists and daily travelers will avoid the city center next week, reducing business at restaurants and tourist attractions and negating the benefits brought by the convention.

“A lot of businesses are telling people to stay home,” he said.

But even if that happens, the Democratic convention could have a positive long-term impact, Freitag said. Millions of people will watch it on television, and if the convention goes off without a hitch, meeting planners and even more tourists could decide that Chicago is worth visiting in the future.

“This is a major event, of national and even international importance, so a lot of people will be interested in the city,” he said.

Moubayed agrees and says Chicago should show off a little.

“We’ve decorated the outside of our hotel beautifully, and inside, the whole hotel looks like the Fourth of July,” he said. “Our bars will stay open late, as well as the pool, where people can order drinks and watch the convention live.”

Brian Arevalo, senior vice president at HVS, a hospitality industry consultant, said weekday events like the DNC can provide significant boosts, in part because even as summer tourists and other convention attendees returned in large numbers, weekday business travel never recovered from the pandemic.

“Unfortunately, the third pillar of the hotel industry, business travel, is still lagging, and with Zoom replacing many in-person meetings, business travel will likely never return to what we experienced before the pandemic,” he said.

One possible downside, he added, is that convention attendees and journalists treat the DNC like a business trip and carefully monitor their spending. That’s a stark contrast to Lollapalooza or Taylor Swift fans, who are more likely to spend money on food, lodging and other entertainment.