Illinois hotels get $75 million in federal assistance

Industry still struggling to recover

click to enlarge Supporters of a $250 million allocation of federal funds to help Illinois hotels recover from the COVID-19 pandemic explain legislation to carry out the proposal at a March 8 Capitol news conference. They included, from left, state Rep. Kam Buckner, D-Chicago; Sen. Sara Feigenholtz, D-Chicago; Michael Jacobson, CEO of the Illinois Hotel & Lodging Association; Darin Dame, general manager of Springhill Suites by Marriott in Springfield; and Anwar Martin, general manager of DoubleTree by Hilton Hotel in Bloomington. - PHOTO BY LEE MILNER.
Photo by Lee Milner.
Supporters of a $250 million allocation of federal funds to help Illinois hotels recover from the COVID-19 pandemic explain legislation to carry out the proposal at a March 8 Capitol news conference. They included, from left, state Rep. Kam Buckner, D-Chicago; Sen. Sara Feigenholtz, D-Chicago; Michael Jacobson, CEO of the Illinois Hotel & Lodging Association; Darin Dame, general manager of Springhill Suites by Marriott in Springfield; and Anwar Martin, general manager of DoubleTree by Hilton Hotel in Bloomington.

Illinois' hotel industry received less than it requested from the General Assembly this year to recover from the COVID-19 pandemic. But an industry leader said the final $75 million infusion definitely will help.

"We're very pleased with where we ended up," said Michael Jacobson, president and chief executive officer of the Illinois Hotel & Lodging Association.

The industry asked the General Assembly to appropriate $250 million from the state's share of the federal American Rescue Plan Act to assist hotels devastated by reduced occupancy and convention business related to the pandemic.

The $250 million would have resulted in one-time grants to hotels of about $1,500 per room.

The final state budget for the fiscal year that begins July 1 included the lesser amount. The $75 million appropriation, which likely will average $400 to $500 per hotel room, still will help with cash flow and other expenses to allow hotels to return to full staffing and capacity, Jacobson said.

Jacobson said hotel industry officials realize state lawmakers had to balance a variety of interests vying for assistance in coping with financial struggles connected with the pandemic. When added to three previous financial assistance programs for Illinois hotels, the latest appropriation means the industry will receive more than $125 million, mostly from federal funds filtering through the state, he said.

"That's more than most states in the country," Jacobson said.

The three previous programs didn't include enough funding to reach the majority of the state's 1,500 hotels, he said.

The new program, funds for which haven't yet started to be distributed, will ensure that all hotels get something, he said.

Hotels that already received financial support will have that total subtracted from any future grants, Jacobson said.

Among those to benefit from the $75 million will be the largest convention hotels in the Chicago area – with 1,500 to 2,000 rooms apiece. Those hotels didn't qualify for assistance in previous rounds because their 2019 revenue totals were too high, Jacobson said.

Springfield hotels are looking forward to the new grant program, said Darin Dame, president of the Springfield Hotel and Lodging Association. He is general manager and a co-owner of the 80-room Springfield Suites by Marriott at 3921 S. MacArthur Blvd.

The hotel industry in Springfield, which includes about 4,000 hotel rooms, continues to recover along with the industry statewide, Dame said.

The busy summer season is imminent, and it's uncertain whether rising gasoline prices, ongoing staffing shortages, inflation and rising COVID-19 cases will interfere with the hotel industry's recovery, he said.

Central Illinois hotels are trying to recruit more workers and counter the incorrect notion that hotel jobs are low-paying and lack opportunities for advancement, Dame said.

The industry statewide isn't expected to experience a full recovery until late 2024 or sometime in 2025, Jacobson said.

Industry officials hope state and local leaders take a "reasonable approach to future increases" in COVID-19 cases and not overreact, he said. Measures such as indoor mask mandates and requiring proof of vaccination status can kill convention business and consumer spending and tourism, Jacobson said.

Surveys so far have indicated rising gas prices haven't yet caused people to change plans for road trips in Illinois this year, he said.

However, concerns about public safety – especially when it comes to crime in Chicago – could put a damper on tourism, he said.

Dean Olsen is a senior staff writer for Illinois Times. He can be reached at dolsen@illinoistimes.com or 217-679-7810.

About The Author

Dean Olsen

Dean Olsen is a senior staff writer for Illinois Times. He can be reached at:
dolsen@illinoistimes.com, 217-679-7810 or @DeanOlsenIT.

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