Chicago’s hotel tax is a mix of state, city, and special district levies, with the total effective rate currently at 17.39%. A new Tourism Improvement District (TID) surcharge for destination promotion potentially adding 1.5% for downtown hotels pending City Council approval.

Chicago is now close to securing an estimated $40 million in additional annual investment to grow visitation. This would significantly elevate the current $33 million annual budget managed by Choose Chicago.

Michael Jacobson, President & CEO of Illinois Hotel & Lodging Association commented, “After nearly 2.5 years of hard work behind the scenes, I am thrilled to see bold, forward-thinking leadership around Chicago’s tourism economy with the recent proposal to invest in our city’s global competitiveness. I am proud to share that we formally introduced a resolution to establish a Tourism Improvement District — including a modest 1.5% assessment on downtown hotel stays to fund enhanced marketing and convention-bid efforts. This will be a game-changer for our local visitor economy.

🌆 Economic Impact: Tourism already fuels billions in local spending, supports thousands of small businesses, and attracts millions of visitors who contribute to vibrant neighborhoods across our city. Strategic investment in promotion and conventions will only strengthen that foundation.

💼 Jobs & Opportunity: Hotels already employ hundreds of Chicagoans from all 77 neighborhoods across the city. Every additional convention or visitor means more jobs — from hospitality and hotel staff to restaurants, retail, theater, transportation, and entertainment. Growing tourism means growing opportunities for Chicago workers and jobseekers.

💰 Tax Revenue Growth: Increased travel and lodging revenue translates directly into higher hotel and local taxes — funding vital city services like schools, public safety, infrastructure, parks, and cultural institutions without increasing property taxes on residents. If it weren’t for the taxes generated by hotels, every Chicago household would have to pay $2,375 more in taxes each year!

🌍 Competitive Edge: Cities across the country are investing heavily in attracting business travelers, conferences, and global audiences. This proposal gives Chicago the tools to compete at that level and ensure we remain a top destination for conventions and leisure travel alike.”

Read more at Choose Chicago here.