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Chicago hotels cutting staff, considering closure

Coronavirus cancellations have caused occupancy rates to plummet, an industry leader says.

As tourists cancel visits to Chicago over coronavirus fears, hotels are cutting staff and considering closing down.
As tourists cancel visits to Chicago over coronavirus fears, hotels are cutting staff and considering closing down.
Colin Boyle/Sun-Times file photo

Layoffs have begun at Chicago-area hotels, an industry leader confirmed Monday, as occupancy rates have plummeted because of the coronavirus and official efforts to control its spread.

Michael Jacobson, CEO of the Illinois Hotel & Lodging Association, also said the industry has gotten clarification of Gov. J.B. Pritzker’s order shutting down bars and restaurants through March 30. Jacobson said hotel-affiliated establishments can remain open for room service, carryout and catering service for events of fewer than 50 people. Weddings larger than that cannot go forward under the order, he said.

“When you are in the teens on your occupancy rate, as many hotels now are, it’s hard to justify keeping the lights on,” he said. Asked if Chicago hotels are closing, he said, “Not yet. That’s the question of the hour.’’

Most hotels have individual ownership and are operated under contract by a “flag’’ such as Hilton or Marriott. Jacobson said the decision to close is a matter for owners, who are seeing results come in below their worst-case projections from the last 72 hours.

Event cancellations attributed to COVID-19 in the last two weeks have cost Chicago hotels an estimated 255,000 room nights worth of bookings.

Jacobson said he could not provide a count of layoffs. His association has announced a “workforce redeployment policy” to help laid-off employees.

Jacobson said the policy will help workers get hired by cleaning services that many hotels are hiring. “If you are a laid-off housekeeper, you have the skill sets to help companies whose services are required right now,” he said.

Many hotel workers here are represented by Unite Here Local 1. Union representatives were not available for comment.