Chicago is promoting a new tax, on certain hotel stays in the city.
City Council approved the so called Tourism Improvement District earlier this year, and it impacts bigger hotels in certain neighborhoods.
The total tax on a hotel stay in Chicago is now 19 percent.
Mayor Brandon Johnson and city leaders touted this as a transformative moment for Chicago’s tourism industry. This new investment, they said, will amplify marketing efforts, attract more events, and benet Chicago’s economy.”
“In the year 2025, it was a very strong year for tourism,” Mayor Johnson said. “We saw a record number of passengers flying through O’Hare Airport, and we welcomed more leisure visitors for our hotels than ever before.”
And the mayor wants that momentum to continue. He introduced a “Tourism Improvement District,” approved by Chicago City Council last month to provide dedicated funding to Choose Chicago. the agency responsible for bringing tourists to the Windy City.
It’s a program that tourism leaders say Chicago’s been lacking for decades.
“Already, we have these tourism improvement districts in over 200 other cities across the country. And most importantly, it would allow the city to generate more revenue and economic opportunity without placing burdens on residents,” Michael Jacobson, president and CEO of the Illinois Hotel & Lodging Association, said.
Starting May 1, visitors staying at a hotel with 100 or more rooms will see a 1.5% assessment on their bill within designated zip codes.
These funds are projected to raise nearly $40 million annually to enhance Chicago’s presence in global markets, attract more travelers, and drive economic growth for the city and the state.
“We compete as the largest convention center in North America with Orlando and Vegas primarily,” Kristen Reynolds, president and CEO of Choose Chicago, said. “Our budget is about 34 million. Orlando is 120, Vegas is over 200 million. So we’ve been really operating in a deficit for many, many years and this makes our competitors nervous.”
City leaders said the benefits from this program will go beyond the tourism industry, bringing more money to the city without affecting people who live in Chicago.
