In an attempt to contain the fast spreading coronavirus, Gov. J.B. Pritzker and Mayor Lori Lightfoot are banning large gatherings, dealing an additional blow to the city’s convention business and the tax revenue generated from hotels.
State and city officials announced Thursday evening that gatherings of more than 1,000 people will be banned until May 1. In addition, officials advised organizers of public and private events expected to draw more than 250 people to postpone them until May 1.
On Wednesday, President Donald Trump announced temporary travel restrictions on people coming to the U.S. from Europe and the World Health Organization declared the COVID-19 disease a pandemic, ramping up pressure on companies to stop business travel domestically and internationally.
At least six conventions have already cancelled, bringing the total number of conference-goers not coming to Chicago because of the coronavirus to more than 125,000. The canceled conferences accounted for more than 126,000 hotel room nights, according to McCormick Place spokeswoman Cynthia McCafferty.
The city, which generates the majority of its business tax from hotels, had projected hotel tax revenue of $128.5 million in fiscal 2020 in its budget overview. But Ted Mandigo, a Chicago-based hospitality consultant for TR Mandigo & Co., estimates the city could lose $64.4 million on hotel tax revenue for the fiscal year.
It could take months until the city knows the full extent of lost hotel tax revenue associated with canceled events, but city officials are keeping a close eye on the budget, said Finance Department spokeswoman Kristen Cabanban.
“The city is monitoring revenue and will adjust its expenses as needed,” Cabanban said.
The National School Boards Association scrapped its conference, which was expected to draw 8,458 people from April 4-6, late Wednesday evening. On Thursday, Salesforce.com pulled the plug on its Connections 2020 event, scheduled for May 4-6 with an attendance of 8,000.
Earlier this month, the International Housewares Association
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, Ace Hardware, Oracle and the American College of Cardiology all nixed events scheduled for McCormick Place.“Given the circumstances of the evolving coronavirus and the disease it causes (COVID-19), which has been classified as a pandemic by the World Health Organization, we are unable to hold the meeting and law seminar this year,” the school boards association said in a statement on its website. “The association’s most important priority and commitment is to protect the health, well-being, and safety of all our annual conference and law seminar attendees and participants, and the communities served by NSBA’s members.”
Salesforce.com said it will hold its conference online instead.
Chicago collects a 4.5% hotel accommodations tax on rental and leasing of hotel rooms. The revenue supports the Metropolitan Pier and Exposition Authority, which owns McCormick Place. It’s also money that funds Guaranteed Rate Field where the White Sox play, Mandigo said.
The tax is in addition to the sales tax the city receives on purchases visitors make at restaurants, gift shops, and on entertainment. Collectively, the cancellations are hurting Chicago area businesses that cater to those visitors.
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