The Civic Federation recently reported that Chicago’s projected revenue from the city’s hotel accommodations tax for fiscal year 2019 is expected to be in the neighborhood of $126.3 million, with another $25.9 million to be generated from a hotel operators’ tax.
Topped by a 4.5-percent tax on hotel accommodations and 6-percent tax rate on home-share taxes through services such as Airbnb, Chicago’s effective composite hotel rate – including hotel taxes imposed by other governments and agencies – stands at 17.4 percent. The composite rate for home-share rentals is 23.4 percent.
Already one of just a few cities to have enacted taxes on both hotel operations and occupancy, the city’s revenues could be headed even higher as its budget forecast for fiscal year 2020 signals greater growth in business travel and tourism, as well as in occupancy and room rates over the next 36 months.
The Civic Federation compared Chicago’s metrics and numbers with New York, Los Angeles, Las Vegas and Orlando, which were identified as peer cities of Chicago based on the volume of tourism they attract. Of the five destinations, Chicago is the only city to impose taxes on both gross receipts and occupancy, and the only one to charge an additional surcharge on home-share rentals.