Have bad times finally checked out?
Chicago's hospitality industry sees signs of slow recovery
Wendy Pashman's catering business held steady during the Great Recession by focusing on the luxury social scene when the corporate market faltered.
Her chefs prepared tandoori eggplant and mango lassis for Indian weddings; pot roast parfaits and gingersnap sweet potatoes for an "international comfort food" nuptial feast; and Israeli couscous and chop chae for a Korean-Jewish bar mitzvah.
Now, with signs of economic recovery cropping up, the Near West Side caterer is redoubling her push for more corporate customers. "There are clients who have called us who haven't had parties in a long time," said Pashman, president of Entertaining Company. "We also see budgets increasing, and holiday parties too."
Chicago's hospitality industry, which relies on locals as well as visitors, appears to be slowly thawing after more than a year in the deep freeze.
Hotel occupancy rates are climbing out of their 2009 troughs, a luxury hotel plan is being resurrected, the overhaul of McCormick Place is beginning to bear fruit and state officials report a rise in tourism tax receipts, indicating an uptick in visitors.
"Everyone's business is a little better — nothing gangbusters," said Maria Zec, general manager of the tony Peninsula Chicago, which held five Christmas tea buffets for children, rather than two, due to high demand. "We're all cautiously optimistic, but we have to get through January and February again, and that's always kind of tough."
The latter end of the recession hit Chicago hard. Travel volume fell 13 percent in 2009, compared with 4.3 percent for the nation, according to data from D.K. Shifflet & Associates, which provides research to Illinois tourism officials.
Business travel declined more dramatically than leisure travel nationwide, and that was hard on the Chicago area, said Jan Kostner, the state's deputy director of tourism.
But state hotel-motel tax receipts were up nearly 7 percent for the first nine months of 2010, compared with the same period in 2009. And while that is considerably below the 2008 peak, the upward movement is promising, Kostner said.
"I think retail sales being up for the holidays was a nice indicator that people want to get out, that they want to spend some money," she said. "I think 2011 (travel) will continue to increase, but it will be small, maybe 2 percent."
Elmhurst-based hotel consultant Ted Mandigo estimates Chicago's downtown hotels, which in 2010 started pulling out of their swoon, this year will see a 2 percent increase in occupancy rates to 72 percent. While still off the 2007 rate of 74.4 percent reported by Smith Travel Research, upward movement is welcome in an industry where an estimated 20 percent of properties are behind on mortgage payments or in default.
Plans to develop a luxury hotel in the former IBM building at 330 N. Wabash Ave. are being revived, in part because of the stronger travel outlook. Plans call for a 330-room Langham Hotel to open in 2012 in the lower floors of the Mies van der Rohe-designed building, across the street from Trump International Hotel & Tower.
"We do feel Chicago has bottomed out and is in for a multiyear growth spurt," said John Rutledge, managing member of Oxford OG Hospitality Chicago, the project's developer. "We are also encouraged by the recasting of (labor union) work rules at McCormick Place. That is a dramatic and important development for Chicago's competitiveness."
Still, a hospitality comeback is likely to be drawn out.
Nationally, the convention business grew in the third quarter of 2010, the first uptick since the first quarter of 2008, according to the Center for Exhibition Industry Research. And since last summer, many McCormick Place trade shows reported growth in attendance and exhibit space, according to Jack Johnson, acting chief executive of the Chicago Convention & Tourism Bureau, which books business into the complex.
The bureau has announced 13 new or renewed trade show contracts since a state law aimed at reviving the city's convention business took effect in May. And the bureau might soon announce new agreements for 2011 corporate meetings.
Still, McCormick Place's show schedule tends to be weaker in odd-numbered years, and much of the newly booked business will occur in later years. The center faces a long climb to levels seen in the early 2000s, and the incoming convention bureau chief, Don Welsh will be under pressure to land new contracts after he takes the helm in early February.
Across the country, business-travel spending is increasing slowly, as companies remain cost conscious, according to the National Business Travel Association, which projects spending will not return to peak levels until the end of 2012.
Such trends are being felt locally by entrepreneurs such as Holly Agra, president of Chicago's First Lady Cruises, a private charter/specialty cruise company. Her business experienced a drop-off in events hosted by financial institutions in 2009 after President Barack Obama objected to corporations spending on excessive travel after taking government bailout funds, she said.
Last year, some clients returned, but they watched their nickels. "Compared to 10 years ago, they are not spending on flowers or live bands or decor," Agra said.
Still, some people popped corks during the recent holidays. Sheila O'Grady, president of the Illinois Restaurant Association, said she chatted with a liquor supplier who couldn't keep up with robust demand for champagne during the holiday season.
"It's a sign that everyone is ready for the bad times to be over," she said. "People are thinking, 'It's a little better, so let's pop the champagne.'"
Chicago's hospitality industry sees signs of slow recovery
Wendy Pashman's catering business held steady during the Great Recession by focusing on the luxury social scene when the corporate market faltered.
Her chefs prepared tandoori eggplant and mango lassis for Indian weddings; pot roast parfaits and gingersnap sweet potatoes for an "international comfort food" nuptial feast; and Israeli couscous and chop chae for a Korean-Jewish bar mitzvah.
Now, with signs of economic recovery cropping up, the Near West Side caterer is redoubling her push for more corporate customers. "There are clients who have called us who haven't had parties in a long time," said Pashman, president of Entertaining Company. "We also see budgets increasing, and holiday parties too."
Chicago's hospitality industry, which relies on locals as well as visitors, appears to be slowly thawing after more than a year in the deep freeze.
Hotel occupancy rates are climbing out of their 2009 troughs, a luxury hotel plan is being resurrected, the overhaul of McCormick Place is beginning to bear fruit and state officials report a rise in tourism tax receipts, indicating an uptick in visitors.
"Everyone's business is a little better — nothing gangbusters," said Maria Zec, general manager of the tony Peninsula Chicago, which held five Christmas tea buffets for children, rather than two, due to high demand. "We're all cautiously optimistic, but we have to get through January and February again, and that's always kind of tough."
The latter end of the recession hit Chicago hard. Travel volume fell 13 percent in 2009, compared with 4.3 percent for the nation, according to data from D.K. Shifflet & Associates, which provides research to Illinois tourism officials.
Business travel declined more dramatically than leisure travel nationwide, and that was hard on the Chicago area, said Jan Kostner, the state's deputy director of tourism.
But state hotel-motel tax receipts were up nearly 7 percent for the first nine months of 2010, compared with the same period in 2009. And while that is considerably below the 2008 peak, the upward movement is promising, Kostner said.
"I think retail sales being up for the holidays was a nice indicator that people want to get out, that they want to spend some money," she said. "I think 2011 (travel) will continue to increase, but it will be small, maybe 2 percent."
Elmhurst-based hotel consultant Ted Mandigo estimates Chicago's downtown hotels, which in 2010 started pulling out of their swoon, this year will see a 2 percent increase in occupancy rates to 72 percent. While still off the 2007 rate of 74.4 percent reported by Smith Travel Research, upward movement is welcome in an industry where an estimated 20 percent of properties are behind on mortgage payments or in default.
Plans to develop a luxury hotel in the former IBM building at 330 N. Wabash Ave. are being revived, in part because of the stronger travel outlook. Plans call for a 330-room Langham Hotel to open in 2012 in the lower floors of the Mies van der Rohe-designed building, across the street from Trump International Hotel & Tower.
"We do feel Chicago has bottomed out and is in for a multiyear growth spurt," said John Rutledge, managing member of Oxford OG Hospitality Chicago, the project's developer. "We are also encouraged by the recasting of (labor union) work rules at McCormick Place. That is a dramatic and important development for Chicago's competitiveness."
Still, a hospitality comeback is likely to be drawn out.
Nationally, the convention business grew in the third quarter of 2010, the first uptick since the first quarter of 2008, according to the Center for Exhibition Industry Research. And since last summer, many McCormick Place trade shows reported growth in attendance and exhibit space, according to Jack Johnson, acting chief executive of the Chicago Convention & Tourism Bureau, which books business into the complex.
The bureau has announced 13 new or renewed trade show contracts since a state law aimed at reviving the city's convention business took effect in May. And the bureau might soon announce new agreements for 2011 corporate meetings.
Still, McCormick Place's show schedule tends to be weaker in odd-numbered years, and much of the newly booked business will occur in later years. The center faces a long climb to levels seen in the early 2000s, and the incoming convention bureau chief, Don Welsh will be under pressure to land new contracts after he takes the helm in early February.
Across the country, business-travel spending is increasing slowly, as companies remain cost conscious, according to the National Business Travel Association, which projects spending will not return to peak levels until the end of 2012.
Such trends are being felt locally by entrepreneurs such as Holly Agra, president of Chicago's First Lady Cruises, a private charter/specialty cruise company. Her business experienced a drop-off in events hosted by financial institutions in 2009 after President Barack Obama objected to corporations spending on excessive travel after taking government bailout funds, she said.
Last year, some clients returned, but they watched their nickels. "Compared to 10 years ago, they are not spending on flowers or live bands or decor," Agra said.
Still, some people popped corks during the recent holidays. Sheila O'Grady, president of the Illinois Restaurant Association, said she chatted with a liquor supplier who couldn't keep up with robust demand for champagne during the holiday season.
"It's a sign that everyone is ready for the bad times to be over," she said. "People are thinking, 'It's a little better, so let's pop the champagne.'"
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