Finance Chair Pat Dowell (3) is pictured during a City Council meeting on June 12, 2024. [Don Vincent/The Daily Line]

The City Council Committee on Finance on Friday will hold a hearing and vote on a proposal to create a local taxing district to help promote the city’s tourism and convention industry.

If the ordinance (O2026-0022544) from Ald. Jason Ervin (28) creating the proposed Chicago Tourism Improvement District is approved, the boundaries would be drawn downtown and in the West Loop. Hotels within the proposed district’s boundaries would be charged a 1.5 percent transaction charge annually on gross revenue earned from hotel stays to raise funds to reinvest into marketing Chicago’s tourism and hospitality industry on a national and international scale.   

The hotel industry, which is largely in support of the district’s formation, has estimated the transaction charge would raise about $42.7 million annually, and the funds would be controlled by a governing board made up of nine-to-11 hotels as well as the Choose Chicago board of directors, to which the hotel board would report.    

The charge would impact hotels with at least 100 rooms in the Central Business District, Illinois Medical District and near McCormick Place. The district would exist for a five-year minimum term after going into effect May 1.   

The state legislature passed a law in 2023 that enables municipalities to create the tourism districts.   

The finance committee held an initial discussion on these types of districts in January, when it voted to pass a measure (SR2025-0021936) setting the hearing date. During the discussion, alderpeople learned funding could also be used to offset certain costs that are typically borne by convention operators, which could be an incentive for those conventions to pick the city over others.  

“The reality is that tourism is a very competitive industry,” said Choose Chicago President and CEO Kristen Reynolds at the January finance meeting.   

Reynolds said other tourism and convention markets spend a lot more to market their cities than Chicago, even when the cities are smaller. She said Chicago should be proactive to retain and grow its market share.  

Other pieces of the hospitality and tourism sector support the district’s creation as well. The Hospitality Business Association of Chicago, Illinois Retail Merchants Association, Chicagoland Chamber of Commerce, Building Owners and Managers Association of Chicago, Chicago Federation of Labor, Mid-America Carpenters Regional Council, airlines like American, Southwest and United and museums such as the Art Institute, Field Museum, National Museum of Puerto Rican Arts and Culture and DuSable Black History Museum are all in support. 

A vote in the finance committee is slated to take place after the public hearing. Committee business will begin at 10 a.m. in council chambers.