Serving the Loop and Near North neighborhoods of downtown Chicago
Chicago hotel market hurt by bad weather and less to do

Photo by Steven Dahlman (Left) A painter rolls primer onto the front of the former Hotel Sax on March 11, removing the last trace of a large sign that hung there since 2007. (Click on image to view larger version.)

April 27, 2014 – There was more criticism last week about Chicago’s hotel market by executives of a real estate investment trust that owns 46 hotels nationwide.

Bruce Riggins, chief financial officer of LaSalle Hotel Properties, says Chicago hotels in general had a weak first quarter due to severe winter weather and fewer events to bring people to the city.

LaSalle’s chief executive officer says their two properties in Chicago – Hotel Chicago at Marina City and Westin Michigan Avenue – had the company’s “toughest quarter.”

“It’s not a great story in Chicago,” said Michael Barnello (right) in a conference call with investors on Thursday. Michael Barnello

Although the cost of transition from Hotel Sax to Hotel Chicago was anticipated, the weather was not. According to meteorologist Tom Skilling, the winter of 2013-14 was Chicago’s coldest in 30 years and its third snowiest since 1871.

The LaSalle CEO had praise for HEI Hotels & Resorts, hired to operate the 353-room Hotel Chicago as part of the Marriott “Autograph Collection” brand.

“HEI has done a great job for us running the other properties that they run for us, and we’re confident that they will be able to turn this around. We’re not there yet…but it’s obviously too soon to tell.”

In March, Barnello said a high supply of hotel rooms has made Chicago its “weakest market” and LaSalle was “not expecting a big performance in Chicago in 2014.”

Otherwise, it was a good first quarter for the Maryland-based company, compared with a year ago. Total revenue increased 14.2 percent to $218.9 million. Funds from operations, an indicator of net profit, were up 12.1 percent to $28.8 million.

Revenue per available room was up four percent to $144.40. Average daily rate was up 6.2 percent to $201.36. Occupancy was down two percent to 71.7 percent.

 Related story: Chicago ‘weakest market’ for nationwide hotel owner

One paroled, one convicted: The disparate paths of two 2023 River North garage robbers
One paroled, one convicted: The disparate paths of two 2023 River North garage robbers
Rental Bidding Wars: North Side seekers pay thousands over asking
Rental Bidding Wars: North Side seekers pay thousands over asking
Federal judge weighs dismissal of Beat Kitchen suit over ‘rigged’ Riverwalk bidding
Federal judge weighs dismissal of Beat Kitchen suit over ‘rigged’ Riverwalk bidding
Theater of the Mind: 15,000-square-foot sensory playground inhabits Reid Murdoch Building
Theater of the Mind: 15,000-square-foot sensory playground inhabits Reid Murdoch Building
The Assessor’s War: Kaegi vs. The Machine
The Assessor’s War: Kaegi vs. The Machine
City council resolution moves ‘Route 66’ starting point to Navy Pier
City council resolution moves ‘Route 66’ starting point to Navy Pier
Pews to penthouses: Church conversion anchors the rise of ‘Gold Coast West’
Pews to penthouses: Church conversion anchors the rise of ‘Gold Coast West’
From mansions to mail boat jumps, Lake Geneva still delivers
From mansions to mail boat jumps, Lake Geneva still delivers
Domestic violence protection is focus of new apartment lease
Domestic violence protection is focus of new apartment lease
Fed lowers rates but home buyers face tough times ahead
Fed lowers rates but home buyers face tough times ahead
ChicagoFilming.com