Chicago collected more than $100 million in hotel taxes last year, a record level, Mayor Rahm Emanuel said last week.
Hotel occupancy rates grew for a third straight year and reached about 75%, tying a 2007 record while revenues were up by more than $25 million over 2011.
"Increasing tourism and business travel to Chicago is a central part of my economic strategy, and I am pleased to report that we are seeing huge increases in all key metrics, demonstrating that our multi-faceted approach is working," Emanuel said in a statement.
The city levies a 4.5% hotel room tax with revenues flowing to city coffers. Hotel tax collections are also significant for the city in that they go to repay $400 million of debt issued in 2001 by the Illinois Sports Facilities Authority for the Soldier Field renovation.
The agency was forced in fiscal 2011 to tap for the first time a portion — $185,000 — of the city's share of state income taxes because of a shortage in hotel tax revenues that go to repay the Solder Field debt. City income taxes were pledged as a backup in the event hotel taxes fall short.
Hotel revenues have since rebounded and no draw was necessary for fiscal 2012, but with debt service rising 6.2% next year and increasing steadily in future years, the authority is under pressure to find a long-term solution.
