No breathing room at the inn: Chicago hotels feel squeeze as city piles on more costs
The Chicago City Council recently added two more surcharges to its Chicago hotel bill, putting an industry already enduring the highest tax rates on hotel rooms in the country at an even bigger disadvantage against similar convention host cities.
Panic buttons for employees and at least one defibrillator will soon be required in every hotel in the city.
“We didn’t oppose the mandates because of course we support the safety of our guests and employees,” Marc Gordon, president and CEO of the Illinois Hotel & Lodging Association, told Chicago City Wire. “But the costs of the mandates combined with the high tax rates are obstacles when it comes to competing, especially with Orlando and Las Vegas.”
Gordon said Las Vegas and Orlando are the only cities besides Chicago (specifically McCormick Place) that can handle the largest conventions, which bring in 25,000 to 30,000 visitors.
“If they stay the standard three to four nights, you’re talking in the range of $120 million to $130 million in revenue coming into the city,” he said.
Chicago’s room tax is 17.4 percent, while guests in Las Vegas pay 12.5 percent and Orlando 11.5 percent.
Gordon said that the costs of the defibrillators and the panic buttons will be in the thousands, with specific figures known once they learn the exact reach of the mandates and what it costs to adhere to them. The number of defibrillators, for instance, can vary depending on the number of ballrooms and banquet halls.
The cost of the portable panic buttons, which would summon hotel security if an employee were being assaulted, are in the process of being priced out by the hotels.
The panic button mandate also allows an employee to “cease work and leave the immediate area where danger is perceived” until hotel security arrive, and sexually harassed employees would be allowed to work on a different floor until the offending guest checks out of the hotel.
In addition, hotels are required to have the written sexual harassment policy in place and have until July 1, 2018, to equip hotel employees with panic buttons.
On top of the high tax rate on rooms, the city sales tax at 11.5 percent for downtown is the highest in the country, and at 28 percent, the city has the second-highest parking tax rate, behind Pittsburgh.
The hotel industry employs 135,000 in downtown Chicago alone. The city collected approximately $1 billion in taxes from the tourism industry last year.