By ALLY MAROTTI, MARY WISNIEWSKI and LORI RACKL
CHICAGO TRIBUNE | MAY 07, 2020 | 8:46 AM
Before Illinoisans were working from home, before restaurants had shut down and before the stay-at-home order was in place, the coronavirus pandemic was already ravaging the state’s convention business.
Now it appears the industry that sustained the pandemic’s first economic blows might be one of the last to recover.
Under Gov. J.B. Pritzker’s five-phase plan to reopen the state, conventions cannot be held until the final phase of recovery. To reach that phase, a vaccine must be developed, a treatment option must be readily available or no new cases must arise over a sustained period.
There’s no telling how long it might take to reach the fifth phase, and increases in cases or hospitalizations could hamper progress. As a result, organizations are unsure whether they should cancel events later this year that would bring tens of thousands of people to the Chicago area, staying in hotels, taking cabs and ride-share vehicles and using their expense accounts to dine in the best restaurants.
Pritzker’s plan, announced Tuesday, has put The Association for Packaging and Processing Technologies in an impossible situation, said President and CEO Jim Pittas.
The group’s annual Pack Expo is scheduled for Nov. 8-11 at McCormick Place, and last year drew about 71,000 people. Pittas said he doubts a vaccine will be available by then, and is unsure what would constitute a readily available treatment option.
Pittas said he is worried that canceling without a specific mandate from the city or state might make it harder to file an insurance claim. “Right now, we can’t plan for a show and we can’t cancel it. We’re right in between with no clear direction," he said. “We’re in no man’s land right now.”
Between July and December, McCormick Place is scheduled to host 67 events with an expected attendance of 781,168 people, said spokeswoman Cynthia McCafferty. Those meetings and conventions translate to 585,199 nights in hotel rooms and generate $922.7 million in economic impact, including spending on food and entertainment.
A mock patient room in Hall C of the McCormick Place coronavirus field hospital is shown April 17, 2020. (Tyler LaRiviere/Sun-Times)
McCormick Place had its first event cancellation related to the COVID-19 outbreak March 3. As of April 20, 65 events that would have drawn 656,668 attendees had been canceled or postponed at the facility, delivering an economic hit to the city of $897 million.
The economic ripple that follows an event cancellation weighs on Mark Watson, executive director of the Radiological Society of North America.
The Oak Brook-based society’s annual meeting is scheduled for Nov. 29-Dec. 4 at McCormick Place and in a normal year draws more than 50,000 attendees, Watson said.
“The biggest concern I have if we have to make the decision to not hold a physical meeting … (is) how many people this impacts throughout the city,” he said.
With convention and trade show business on an indefinite pause, the forecast for an already beleaguered hotel industry looks even bleaker.
“It will certainly prolong the recovery much longer than we even thought," said Michael Jacobson, CEO and president of the Illinois Hotel & Lodging Association, which represents about 500 of the state’s 1,500 hotels.
The pandemic has caused demand for hotel rooms to hit historic lows, prompting many properties to go dark.
Among hotels still open in the city’s central business district, the occupancy rate was a paltry 13.4% for the week ending May 2, according to figures released Wednesday by the hospitality industry data firm STR.
At least 131,000 out of 292,000 hospitality jobs tied to the state’s hotel industry have been lost to layoffs and furloughs, Jacobson added, calling it a “fairly conservative” estimate.
Hotel bookings that result from conventions, trade shows and other large meetings make up a significant piece of the reservation pie. So-called group travel, which includes overnight lodging reservations tied to conventions and big meetings held at hotels, accounts for 30% of room nights in the city, Jacobson said, citing data from Choose Chicago, whose job is to bring business and leisure travelers to the city.
But the economic impact of those overnight stays is even greater. Big conventions raise the rates for other people coming into the city, meaning group travel ultimately accounts for 50% of revenue in terms of average daily rate, Jacobson said.
He said he’s hopeful the timeline to restart convention business could move quicker based on scientific developments and new safety protocols. He’s concerned about being put in a position where other states are allowing conventions to take place while Illinois is not.
“Our biggest fear is that if we lose some of these conventions, we lose them for good,” he said. "Once a show leaves, it’s hard to convince them to come back to a host city.”
Chicago-based charter bus company Aries Charter Transportation also has taken a hit from the loss of convention center business, said sales and marketing manager Sam Trevino.
The company hasn’t had any private charters, group business or convention work since St. Patrick’s Day weekend, when the parade and river dyeing were canceled.
"That was really the last straw. That’s when everyone started putting their cancellations in,” he said. “It’s really a shame what’s going on.”
Aries lost about $850,000 from cancellations this year, about $150,000 of which was convention work, Trevino said. The company had to furlough half of its roughly 100 employees.
The company has about 100 motor coaches and mini-buses. It is still handling contracts at O’Hare International Airport — they are among the buses replacing the People Mover, which is down for renovation, and they also carry Transportation Security Administration employees around the airport.
In Rosemont, the Donald E. Stephens Convention Center is focused on working with show organizers to either cancel or reschedule, said Executive Director Christopher Stephens. But without a firm reopening date from the state, it’s impossible to be certain when an event can happen, he said.
“This changes everything, because we’re back to wait and see again," he said. "The only thing you can really hope for I guess is the vaccine or the highly effective treatment.”
Stephens said clients will have a lot of questions. The main one: How do you encourage people to participate if it’s unclear whether the event will happen?
The convention center has rescheduled about 10 events for the fall, another eight to next year, and has lost one or two completely. At its conference center, it has deferred about 35 to 40 corporate events, meetings, banquets and proms and lost one event.
Stephens said that if the center couldn’t do any more events this year, the financial impact would be “dramatic.” Even reaching phase four of Pritzker’s plan, which allows for gatherings up to 50 people, wouldn’t help much.
“Fifty people doesn’t allow you to do much," he said.