Choice Hotels' Next Big Frontier: Chicago
A record 51 million tourists visited Chicago last year, putting the city well on pace for Mayor Rahm Emanuel's goal of 55 million visitors by 2020. At this rate, there won't be enough hotel rooms for the increase in tourism. Choice Hotels recognizes the demand is fast outstripping supply and announced plans for two new downtown hotels under its upscale Cambria Hotels & Suites brand.
Choice Hotels CEO Steve Joyce was in town last week for the announcement of the two new facilities: Cambria Hotel & Suites Chicago - City Center, in the offices above the Oriental Theatre; and Cambria Hotel & Suites Chicago - Magnificent Mile, in the existing MileNorth Hotel. He said opening a Cambria in Chicago has been in Choice's long-term plans for at least eight years, but the firm was never able to find an ideal site. When Steve heard that Murphy Asset Management originally planned to convert the Oriental's offices into apartments, he saw a golden opportunity to finally launch the Cambria brand in Chicago, instead. Steve says the 90-year-old building is a once-in-a lifetime historic rehab opportunity in the heart of the downtown theater district.
When the hotel is delivered next year, Cambria City Center will boast 198 rooms on 21 stories, and will feature amenities such as a contemporary bistro and 2,500 SF of meeting space. Steve says once his firm was able to sit down with Murphy Asset Management and show how serious Choice was in bringing Cambria to the Oriental, all Choice needed to do was put together an enticing package.
Murphy Asset Management CEO John Murphy already had second thoughts about adding to the crowded downtown multifamily pipeline and was eager to hear what Steve and Choice had to offer. John also did his own homework: in addition to the rising tourism numbers, he discovered there were 3.1 million unfulfilled downtown hotel reservations in 2014. With Chicago expected to have an undersupply of 20,000 hotel rooms by 2020, John saw converting the Oriental into a Cambria as a can't-miss opportunity. John adds that the ceiling heights in the building, which range from nine feet to 14 feet, will make for some of the most unique hotel rooms in downtown.
The Cambria Mag Mile repositioning is another matter. Steve says two things the site has in its favor are a rooftop bar and its location in the heart of Chicago's most popular shopping district. When Cambria Mag Mile opens next year, this 29-story, 215-room hotel will feature 3k SF of meeting space and upgraded rooms and common areas.
Snapped (from left): Choice Hotels SVP of upscale brands Janis Cannon; HOTELS magazine editor Jeff Weinstein; Ron Silva, CEO of Fillmore Capital Partners, which owns the MileNorth Hotel; Steve Joyce; John Murphy; and Choose Chicago interim CEO Marc Anderson. Ron says Fillmore has an existing relationship with Choice in other markets and was enticed to revamp the MileNorth as a Cambria because the hotel has had a rocky history (its two previous owners died) and hasn't performed up to expectations, given its location.
Steve says the two Cambria projects are just the beginning for Choice in Chicago. He believes there's untapped potential in submarkets like Schaumburg and both O'Hare and Midway, and that market conditions are ripe for Choice to capitalize.