H
otel owners in downtown Chicago are sounding the alarm over property-tax valuations that could have a lasting impact on the city's recovering hospitality industry. According to Cook County Assessor Fritz Kaegi's latest assessments, major hotels like the InterContinental Chicago and JW Marriott Chicago saw their assessed values jump by over 150% compared to 2021. While some increase was expected after pandemic-induced reductions, the Illinois Hotel & Lodging Association argues that these figures are unrealistic.

    The association's president, Michael Jacobson, says hotel owners are facing a harsh reality: despite improvements in visitation and revenue, they're still far from pre-pandemic levels of profitability or occupancy. Revenue per available room averaged $162.70 through September, up 9% from 2019, but inflation-adjusted figures show revenues trailing behind. Labor costs have also squeezed margins, with hospitality-sector wages rising 30% over five years.

    Gene Kornota of Rebel Hospitality warns that the spike in valuations poses a direct threat to hotel owners and their employees. "These reassessments threaten our livelihood," he said. Kaegi's office has defended the valuations, citing hotels' rapid rebound and cost-saving measures. However, rising assessments may discourage investment in Chicago's hotel market, Jacobson says.

    Final assessments for 2024 are expected early next year, leaving owners with a tight deadline to file appeals by November 27 or December 12, depending on their location.