Hotels turn to day rates amid increasing competition

The Hoxton is among two dozen Chicago hotels offering the afternoon rates to compete with short-term rentals, co-working companies and the flood of new rooms hitting the market

Jan.January 27, 2020 11:45 AM
The Hoxton hotel at 200 N. Green St. (Credit: iStock)

The Hoxton hotel at 200 N. Green St. (Credit: iStock)

An increasing number of hotels across Chicago — including the boutique variety — are offering day-rate rooms, pegging them as a co-working spinoff complete with bed and bathroom.

The strategy — employed by about two dozen properties — comes at a time when new hotel development in Chicago has squeezed profits, as have Airbnb and other short-term rental companies, according to Crain’s. Fulton Market alone is projected to be home to about 1,500 hotel rooms in the next few years, raising questions about how much supply the market can absorb.

The Hoxton in Fulton Market offers half-price rooms from 10 a.m. to 4 p.m., and properties like Sofitel Chicago Magnificent Mile and Hyatt Centric Chicago hotel in Streeterville offer similar deals, Crain’s reported., a reservation platform, booked about 8,000 rooms in Chicago last year, four times more than 2018’s total, according to the report.

And following a strong 2018, revenue per available room at downtown hotels dipped to $150.82 in 2019, according to Crain’s, citing STR data.

Despite the increased competition, hotel development continues. The Chicago Planning Commission last week advanced North Park Ventures’ 476-key hotel project at 800 West Lake Street in Fulton Market.

[Crain’s] — Brianna Kelly

Related Articles

Governor of Illinois J. B. Pritzker (Credit: Joshua Lott/Getty Images)

State offers lifeline to devastated hospitality industry

Founder, President and CEO of Oxford Capital Group John Rutledge with Hotel Felix and Hotel Julian (Credit: Oxford Capital Group, Hotel Felix and Google Maps)

Oxford Capital designates 5 of its Chicago hotels for coronavirus housing program

Sterling Bay CEO Andy Gloor and a rendering of 345 N. Morgan St. (Credit: Sterling Bay, Cara)

Sterling Bay nabs construction loan for Google-leased office building

The 21c Museum Hotel at 55 E Ontario Street and the Hilton at 720 S. Michigan Avenue (Credit: Google Maps)

More hotels fall victim to coronavirus pandemic

Mayor Lori Lightfoot & Hotel One Sixty-Six Magnificent Mile at 166 E. Superior St. (Credit: KAMIL KRZACZYNSKI/AFP via Getty Images, Google Maps)

Chicago will foot bill for 2K hotel rooms to isolate those with coronavirus

Chicago Hotels Feel Impact Of Coronavirus

Chicago’s hotel occupancy dropped by a third. Next week will be worse: Analyst

From left: Park Hyatt Chicago at 800 N. Michigan Avenue & The Peninsula at 108 E. Superior Street (Credit: Google Maps and iStock)

Park Hyatt, Peninsula hotels shutter amid coronavirus outbreak

Richard Branson, Lionstone CEO Diego Lowenstein and 203 N. Wabash Avenue (Credit: Cindy Ord/Getty Images; Google Maps)

Richard Branson group snags $37M refi on Virgin Hotel Chicago