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Choose Chicago CEO blasts Preckwinkle's hotel tax

Wednesday, November 11, 2015
Crain's Chicago Business
by Greg Hinz

In an unusual public spat among local officials, the head of the city's convention and tourism agency is ripping Cook County Board President Tony Preckwinkle's plan to impose a 1 percent tax on hotel and motel rooms, after earlier boosting the county's sales tax by a penny on the dollar.

In an interview, Choose Chicago CEO Don Welsh said the hike "is the last thing we need," and he says it's already being exploited by competitors in other cities. (In case you're wondering, Welsh called me.)

Preckwinkle said the existing city hotel tax combined with the new county tax would still be lower than cities such as Montreal and Houston. "With all respect," Welsh said, "we don't compete against those cities," especially for conventions and trade shows.

Chicago competes against cities such as Atlanta, Los Angles and Orlando, Fla., and already had a tax higher than they do, Welsh said. And he cited a survey by a trade publication that shows the Windy City's combined taxes on hotel rooms is even higher than New York's and San Francisco's.

Preckwinkle apparently wasn't interested in hearing those facts, Welsh suggested, because she didn't bother to discuss or inform anyone in the hospitality industry before she announced her proposal.

"Before you make a decision like that, you have to think long and hard about the competitive effect on the the city," Welsh said. "We would have hoped we'd be able to get in a room with the president or her people and debate and talk about this and exchange data, instead of reading about it in the paper."

Welsh called on Preckwinkle to withdraw her plan but made it clear that, if she doesn't, "we will do what we can to talk about the implications" with Cook County Board members and others.

NO SIGNS OF BACKING OFF

Preckwinkle's office shows no inclination to back off the plan, which is expected to come for a vote in the board's Finance Committee at the end of the week.

"As the president said, we believe this to be a modest increase: $1/night additional on a motel room and $3-$4/night at a luxury hotel," her spokesman said in an email.

But Welsh said even that "is hurting," given Chicago's already lofty rates, with travel-industry publications writing about the city's rising rates.

It also comes at a bad time, with convention business down next year, several new hotels opening and Choose Chicago's promotions money caught up in the Springfield budget battle.

Welsh, who serves at the pleasure of Mayor Rahm Emanuel, insisted he did not clear his remarks to me with the mayor's office. "I'm just doing my job," he said.



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