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Hotels need city, state aid to reopen at full staff, industry trade group says

The Illinois Hotel & Lodging Association wants Mayor Lori Lightfoot to earmark $75 million in federal coronavirus relief to help Chicago hotels staff up for a full reopening. That’s roughly $1,500-per-room at every hotel in the city.

The Chicago skyline is seen from Maggie Daley Park in the Loop.
Hotels in downtown Chicago and elsewhere in the city took a hard hit during the pandemic, and still need help if they are to reopen and take advantage of the uptick in tourism, a trade group says.
Pat Nabong/Sun-Times

The return of Lollapalooza is a huge boost for Chicago tourism. But if hotels are to take full advantage — by rehiring a full staff — they need city and state help, an industry trade group said Tuesday.

Michael Jacobson, president and CEO of the Illinois Hotel & Lodging Association, is pushing for a hotel-only version of the Payroll Protection Program that helped restaurants survive the pandemic.

Jacobson is asking Mayor Lori Lightfoot to earmark $75 million of the $1.9 billion avalanche of federal coronavirus relief on its way to the city to help Chicago hotels staff up for a full reopening. That’s roughly $1,500-per-room at every city hotel.

To provide that same help to hotels outside Chicago, Jacobson is urging Gov. J.B. Pritzker to set aside $250 million in federal relief.

“These hotels that are now reopening — they’ve gone a year without a penny in revenue. Just to open their doors, they need 100-to-200 people rehired. And they don’t have the capital on hand after being closed for a year to get those paychecks up and running,” Jacobson said, suggesting “a bridge program” to help hotels rehire those workers.

“Then business will pick up with Lollapalooza and with conventions to sustain those paychecks. We just need that initial influx. We just need a little boost because hotels haven’t gotten a penny of support from the city of Chicago throughout this all.”

Jacobson said the size of the city and state requests was based on a similar program in Washington D.C. last fall, bankrolled by the first round of federal stimulus funds.

The mayor’s office and the governor’s office had no immediate comment.

What happens if both the city and state say no?

“It’ll just slow the rehiring process. Hotels will be forced to do more with less,” he said.

A pending “Right to Return to Work” ordinance would require Chicago hotels to rehire employees based on seniority, regardless of skills. Jacobson argued it would slow the pace of rehiring.

Hotels need and deserve the right to rehire employees to fill the jobs they need immediately. They need to be nimble to meet travel demands. They don’t need to be saddled with a logistical nightmare just when they’re trying to get back on their feet, he said.

“We’re not opposed to the concept. We want the people [who] are trained and are loyal to our hotels back first. It’s just the way it’s actually written that’s unworkable. It doesn’t take into account what department they were laid off from,” Jacobson said.

“If a position opens up in the kitchen as a cook and a housekeeper is next on the list in terms of seniority, according to the ordinance, we’d have to hire a housekeeper to go work as a cook. That just doesn’t make sense.”

Hotel owners have offered to sit down with Unite Here Local 1 and negotiate the final language for the last six months, but those offers have been rejected, Jacobson said.

Union officials could not be reached for comment.

Hotel occupancy rates are “hovering in the high 20% range,” Jacobson said. That’s a vast improvement from the “single digits” of a year ago, but well below the occupancy rates well “in the 70’s” hotels normally enjoy in the days leading up to Memorial Day.

The Westin River North is scheduled to reopen later this week. The Sheraton Grand follows suit June 7. The Palmer House Hilton, mired in bankruptcy, plans to reopen in mid-June, Jacobson said.

It’s no accident the sleeping giant of an industry started to reawaken after Pritzker and Lightfoot announced McCormick Place would reopen with the return of the Auto Show in July.

“That’s what we were saying all along. That we just needed some long-term planning to put them at ease that, if they were going to go through the process of reopening their 1,500-room hotel, that they were gonna have the business to sustain it,” Jacobson said.

“If you look at the various festivals and events throughout this city, there’s very few that generate as much tourism to the city as Lollapalooza. It’s thousands and thousands of visitors coming to Chicago. That’s what we need to reopen some of these bigger hotels.”