The grand old Chicago Hilton, a proud member of the Historic Hotels of America, is proceeding with its new look. In an estimated $16 million restoration, interior alterations to about 658 total guest rooms on floors 5,8, 15,16,17,18,19,21, & 22 will uplift the interiors. Renovations to ten meeting rooms on the 5th floor and new corridor light fixtures will also proceed.
While these may seem like standard procedures for a hotel, it's actually a signal of the underlying competitive current happening to all hotels downtown right now.
Of course its normal for a business to invest in periodic maintenance of its asset, but it's more than due diligence: it's crucial vigilance. Why? According to Crain's, downtown hotel owners have enjoyed their highest-grossing year yet in 2014. And with that success comes widespread activity to capitalize on the crest of that wave, mainly through the development of more hotel rooms: 2,200 more rooms this year and 2,243 next year, in fact. That will increase the supply of downtown hotel rooms by 5.6 percent to a total of 42,010. It's getting crowded.
With more choice comes more competition. Newer offerings, like the 250-room Virgin Hotel, will sway tourists and business travelers that want a novel experience. And with an uptick in convention business, the influx of visitors propels downtown into one of the most active hotel markets in the country. The McCormick Place convention center expansion is expected to bring more business travelers to the city with its 1,200-room Marriott Marquis.
Increased inventory forces an uphill battle to fight for high room rates that preserve current operating margins. Room bookings are up, and hotel revenue per available room rose to $151.85 in 2014, which is the highest since 2007. But being on top can represent an unwanted descent downhill in profitability. To try and stay in a good place of performance, a hotel might focus on providing the best service, highest convenience, or the most value. And while the Hilton has a pedigree, it has to polish its patina of age with technology, customer service, and refreshed interior design. It's not the only hotel with history, after all. The Chicago Athletic Hotel boasts a thorough restoration of Henry Ives Cobb's 1893 Venetian-Gothic-styled structure on Michigan Avenue.
So, upgrades are a basic necessity, just to keep playing in the game. Previous permits include a $500,000 renovation to the third floor restrooms, $1.5 million renovation to the third floor meeting rooms, and a $189,660 re-roofing job. Let's see what else the hotel is going to improve upon.
·Construction boom will bring more room at the inns [Crain's]
·Hotels debut across downtown Chicago [USA Today]
·Project Description [Chicago CityScape]
·Six Things You Need Know: Chicago's Downtown Hotel Boom [Chicago Architecture Foundation]
·Inside the Swanky Virgin Hotel Now Open in Downtown Chicago [Curbed Chicago]
·Previous coverage [Curbed Chicago]