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Chicago hotel market hurt by bad weather and less to do
27-Apr-14 – There was more criticism last week about Chicago’s hotel market by executives of a real estate investment trust that owns 46 hotels nationwide. Bruce Riggins, chief financial officer of LaSalle Hotel Properties, says Chicago hotels in general had a weak first quarter due to severe winter weather and fewer events to bring people to the city. LaSalle’s chief executive officer says their two properties in Chicago – Hotel Chicago at Marina City and Westin Michigan Avenue – had the company’s “toughest quarter.”
Although the cost of transition from Hotel Sax to Hotel Chicago was anticipated, the weather was not. According to meteorologist Tom Skilling, the winter of 2013-14 was Chicago’s coldest in 30 years and its third snowiest since 1871. The LaSalle CEO had praise for HEI Hotels & Resorts, hired to operate the 353-room Hotel Chicago as part of the Marriott “Autograph Collection” brand. “HEI has done a great job for us running the other properties that they run for us, and we’re confident that they will be able to turn this around. We’re not there yet…but it’s obviously too soon to tell.” In March, Barnello said a high supply of hotel rooms has made Chicago its “weakest market” and LaSalle was “not expecting a big performance in Chicago in 2014.” Otherwise, it was a good first quarter for the Maryland-based company, compared with a year ago. Total revenue increased 14.2 percent to $218.9 million. Funds from operations, an indicator of net profit, were up 12.1 percent to $28.8 million. Revenue per available room was up four percent to $144.40. Average daily rate was up 6.2 percent to $201.36. Occupancy was down two percent to 71.7 percent.
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