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As part of Choose Chicago’s vision, the city’s hotel tax,
already the highest in the country among convention cities,
could jump to 18.9% at downtown venues. The so-called Tourism
District Plan looks to add an extra 1.5% surcharge on room rates
for stays at loop hotels with at least 100 rooms.
“I think even if the Tourism Bureau needs more money they need
to find it out of existing funds,” Ugaste told The Center
Square. “We can't keep increasing prices on things. It's chasing
everyone away. Chicago has always been a great destination for
tourism and conventions and we just aren't getting what we used
to because of how much it costs to come here.”
Even with the city’s $29 million annual budget being roughly
just half of what some rival cities allocate for such
promotions, Ugaste argues more taxes and higher fees are not the
solution.
“Unfortunately, the party in power in this state always thinks
the answer to everything is to throw more money at it,” he
added. “Right now, the answer seems to me to be the exact
opposite. We need to look to see how we can decrease taxes and
costs so that people will come here.”
Data shows almost 52 million people visited Chicago in 2023, or
almost nine million fewer visitors than the number that traveled
to the city during 2019’s record year, prompting Ugaste to
stress the city’s problems run much deeper than just budget
issues.
“We're running into big problems; they're talking about a
transit funding cliff,” he said. “Well, it's because no one's
commuting to the city because of the crime problem. We have
businesses and people leaving Illinois and now we're facing a
three-billion-plus dollar budget deficit. It's just going to
keep compounding itself until we finally address these
problems.”
Ugaste said the whole state pays the price when the city falls
short of being what it should be.
“Chicago is what makes the northeast corner of the state thrive
and if Chicago is not doing well the rest of the area is going
to start having the same problems and declining too,” he said.
“We're all dependent on each other and Chicago has always been
the economic driver. I just believe they're taking the wrong
approach because they're not listening to anyone on our side and
they're not looking at what they've tried in the past and what
has and hasn't worked.”
Choose Chicago officials say revenue generated from the new tax
would also be used to cover incentives and “bid fees” in
attracting more large-scale events such as the Democratic
National Convention to the city. The tax increase could mean as
much as an added $50 million in annual revenues for the city’s
promotional budget.
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