City’s bill mounts for Covid-related hotel housing but many rooms sit empty

For weeks now, Chicago has been paying for 875 hotel rooms to house frontline workers and people who have tested positive for or been exposed to the coronavirus.

The move by the city was meant to alleviate the pressure on hospitals, but just 488 of those rooms were occupied as of April 30, according to Crain’s. Now, Mayor Lori Lightfoot’s office said the city will not rent additional rooms and is “in the process of assessing our needs going forward,” according to the report.

So far, the bill for the rooms at five downtown hotels — including Hotel One Sixty-Six Magnificent Mile — totaled $1.6 million as of April 30, Crain’s noted, citing figures from the Chicago Office of Budget & Management. The cost per hotel room ranges from $130 to $175.

The decision comes as the rate of new cases of Covid-19 appears to be slowing in the city, and after Gov. J.B. Pritzker released a five-point plan to reopen the state’s economy, including retail shops and offices. The mayor said she will soon provide specifics on her own guidelines for loosening restrictions on city businesses.

Lightfoot announced the agreement with hotels in late March, hoping both to provide frontline workers with immediate housing, avoid hospitals getting overwhelmed with Covid-19 patients and provide a source of revenue for hotels that have been decimated by the virus.

At the time, there were 598 reported cases of Covid-19 in Chicago. That number has skyrocketed to more than 27,000 cases.

The city is paying upfront for the hotel rooms, and has said it will seek reimbursement from federal funds and other potential sources.

The occupancy rate at Chicago hotels remained at about 24 percent last week, according to the latest figures from hospitality data firm STR. [Crain’s] — Alexi Friedman