By James P. Regan

As published by GlobeSt.com,August 2003

First Quarter 2003 statistics for downtown Chicago’s limited service hotels confirm the continuing decline in the City’s hospitality market.

There are three crucial statistics that provide an accurate barometer of the condition of a hotel’s revenue stream.  The first two, Occupancy Rates and Average Daily Rates are self-evident.  Hotel managers combine both of these numbers to arrive at a third indicator; i.e., a hotel’s revenue per available room (RevPAR).  A survey of three downtown limited service hotels with national brand affiliations presents a bleak picture for the first three months of 2003.  From 2002 to first quarter 2003, the daily rates declined by 10.12%, occupancy rates were down by 12.6%, and revenues per available room decreased in excess of 20%.

The City of Chicago will be revalued in 2003 for real estate tax purposes.  Considering the fragile hospitality market, hotels should receive significant relief on next year’s tax bills.

James P. Regan is the managing partner of the Chicago law firm of Fisk Kart Katz and Regan, Ltd., the Illinois member of American Property Tax Counsel (APTC), the national affiliation of property tax attorneys.