* Keep in mind that this was happening at the same time that Chicago hotels were booming…
Profits [at the Trump International Hotel & Tower Chicago] fell 89 percent from 2015 to 2018, from $16.7 million to $1.8 million, according to documents filed with Cook County, Ill. Trump’s hotel struggled even as other Chicago hotels held steady or thrived.
“Performance of [the Trump hotel] is clearly disassociated from that of its competitive set,” the company’s lawyers said in a letter to the county seeking to lower the hotel’s taxes.
The lawyers said the problem was a reaction to Trump’s politics. They even quoted a line from a 2018 Washington Post article, in which one small-time investor described the effect of Trump’s candidacy on his buildings thusly: “Then the Embarrassment came.”
Trump International Hotel & Tower Chicago, which prides itself on indulgent luxury, is trying to keep up by cutting costs. In a presentation to investors, obtained by The Post, the company described leaving jobs open, cutting back on gifts for high rollers and children, and buying cheaper housekeeping supplies.
* And things are about to get worse as the market has become overly saturated…
Struggling to keep up with a glut of new rooms across the city, Chicago hoteliers faced January’s polar vortex, a cyclical downturn in convention business, lower rates, lower occupancy and at least one high-profile default in 2019.
“There’s no doubt 2019 has been a challenging year for all hotels,” said John Rutledge, CEO of Chicago-based Oxford Development, which has developed 10 hotels in Chicago, including LondonHouse, The Langham and The Godfrey. “It’s time to take a breath and absorb some of that new product.” […]
But demand has not kept pace with supply. After a record year in 2018, hotel occupancy has fallen under 75% through September — a 2.5% year-over-year decline, according to data from research firm STR supplied by Choose Chicago.
Meanwhile, the average daily room rate in Chicago has dropped 3.2% to $205.74, according to STR data. Revenue per available room — a key measure of profitability — is down 5.6% to $153.41.