Tourism Industry Is At Risk

By Don Welsh, President and CEO, Choose Chicago

Chicago’s tourism industry is vital to the economic health of the city’s economy – but now we find future projected revenue at risk. This includes 7,400 good paying jobs tourism creates, $750 million in spending by tourists who come to our great city, and almost $30 million in tax revenue that these tourists generate.

The cause for this forecasted slowdown isn’t the economy or a lackluster tourism industry. Unfortunately, it’s a result of the continued state budget impasse which is having a ripple effect on working families and businesses.

Photo Credit:
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The State of Illinois is now in its fifth month without a budget and Choose Chicago’s statutorily mandated state funding remains frozen. This is our largest single source of revenue representing 40 percent of our annual operating budget. This funding has allowed a high-performing team to develop strategies that ultimately helped in welcoming a record 50.2 million visitors to Chicago, and delivered significant increases in local and state tax revenue.

For every $1 invested in attracting visitors, $25 is returned in state and local tax revenue. The time has come for our local and state leaders to release tourism funding so future jobs, revenue and growth is not lost.

More than $7 million in funding owed to Choose Chicago for July-December 2015 has been frozen. As a result, we have implemented significant changes.  Following a record summer tourism season, we were forced to eliminate 28 positions, close two more international offices and the official Visitor Information Center located within the Chicago Cultural Center.  Our summer media campaign was pulled out of the national market two months earlier than planned and plans for the annual winter campaign still remain on hold. As long as this budget impasse continues, the economic health of the city and state will be negatively impacted as a result of the reduced tourism efforts. As it stands today, this impact is being felt now – and likely headed into the spring of next year.

Think back to five years ago, when McCormick Place and Chicago were on the brink of becoming irrelevant from a tourism point of view. Public opinion was largely stacked against Chicago as difficult work rules and soaring costs forced many to consider moving their shows – and billions of dollars in revenues – to other cities. Immediately after the historic work rule reforms were implemented at McCormick Place, the experience for customers was transformed. Greater flexibility, significant cost savings, and a new spirit of partnership, especially with labor, positioned customers for the highest-attended and most successful shows ever.

As a result of Choose Chicago’s strategies and initiatives, Chicago’s visitor industry has grown at an exponential pace and with record-breaking results.

  • More than $11 billion in new and recommitted business as a result of the McCormick Place reforms.
  • Total visitation to Chicago has increased 15 percent since 2011 to 50.2 million domestic and overseas visitors. Chicago joins New York City and Orlando as the only three U.S. cites to exceed 50 million annual visitors.
  • Chicago’s hotel room demand has reached historic levels with 19 consecutive months of record demand, and though October of this year has outpaced national growth in five of six key performance indicators.
  • Tourism-related employment since 2011 has increased 6 percent to 136,000 good-paying and career-oriented jobs. More than 2,500 jobs were added in 2014, the fourth largest increase n the past ten years.
  • Tourism spending has increased by $2.1 billion to $14.1 billion since 2011.

Chicago has gained incredible momentum as a visitor industry, yet now the city faces a new challenge. Suspending statutorily mandated funding to Choose Chicago will undoubtedly deliver a negative blow to tourism-related employment and economic activity. Our leaders must remember that for every $1 dollar invested in Choose Chicago, $25 in state and local tax revenue is returned.

We’ve come so far, this is the time to hit the gas, not put on the brakes.

Don Welsh
President and CEO
Choose Chicago


This is the first in a series of semi-regular commentaries from people and organizations about what’s important to Chicagoland.  Today’s commentary comes from Don Welsh, President and CEO, of Choose Chicago. If you have questions or wish to respond, feel free to forward your thoughts to WLS Program Director Peter Bolger.