Chicago is an incredible city. We say that a lot and we mean it every time. But we’d be doing you a disservice if we let you book your trip without flagging something that’s going to affect your wallet before you’ve even unpacked your bag.
In March 2026, the Chicago City Council unanimously voted to raise the hotel tax on downtown properties to 19% — making it the highest hotel tax of any major city in the United States. Here’s what that means for you and what you can do about it.
What Actually Happened
The City Council created a new Tourism Improvement District and voted to raise the combined hotel tax from 17.5% to 19%. The money goes to Choose Chicago, the city’s official tourism and convention agency, which will use it to fund marketing campaigns, attract major events, and cover bid fees for things like convention hosting.
The tax applies to hotels with 100 or more rooms in the downtown area and surrounding neighbourhoods. It doesn’t apply automatically — hotels have to opt in — but given that the revenue goes directly back into tourism promotion, most large downtown properties are expected to participate.
What Does 19% Actually Mean for Your Bill?
Put it this way. Book a downtown hotel room at $200 a night and you’re looking at $38 in tax on top of that. Stay for four nights and you’ve added over $150 to your trip before you’ve eaten a single meal or done a single thing. For a family booking a week in the city over summer, the tax alone could add several hundred dollars to the total cost.
Chicago was already not a cheap city to stay in. It now has the highest hotel tax in America, ahead of New York, Los Angeles, and Washington DC.
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Why Did They Do This?
The city’s argument is straightforward: Chicago is competing with Las Vegas, Orlando, and other convention powerhouses for major events, and it’s been doing so with one hand tied behind its back. Choose Chicago was operating on a budget of around $33 million annually. Las Vegas’s equivalent spends $457 million. Orlando’s spends $116 million.
Mayor Brandon Johnson said the money would attract more tourists by combating what he called “negative narratives” about the city and giving Choose Chicago the resources to compete for conventions and major events — including a bid to host the Democratic National Convention.
Critics have pointed out that making Chicago the most expensive city in America to stay in is a strange way to attract more visitors. That debate is ongoing.
What This Means If You’re Visiting
A few practical things to know before you book:
The tax applies to large downtown hotels — 100 rooms or more — that have opted in. Smaller boutique hotels, guesthouses, and properties outside the immediate downtown area may not be subject to the full rate. If you’re flexible on where you stay, it’s worth looking at options in neighbourhoods like Wicker Park, Logan Square, Lincoln Park, or Andersonville, where you’ll often find better value accommodation and a more local experience anyway.
Short-term rentals like Airbnb are a separate conversation — the tax as passed applies specifically to qualifying hotels, so rental properties may offer a way around the surcharge while also putting you in a neighbourhood rather than a hotel corridor.
Book early. Chicago is hosting FIFA World Cup matches in 2026, and demand for downtown accommodation is going to be significant. Prices were already expected to spike around those dates — the new tax rate on top of peak-season pricing is going to make late bookings very expensive indeed.
The Silver Lining
Here’s the thing. Chicago is still Chicago. The Art Institute, the Riverwalk, the architecture, the food, the neighbourhoods — none of that has changed. The lakefront is still free. Lincoln Park Zoo is still free. Cloud Gate is still free. The things that make Chicago genuinely great don’t cost anything, and no hotel tax changes that.
What the tax does change is how much thought you should put into where you’re staying. Spend a little time looking beyond the obvious downtown options and you’ll find better value, a more interesting experience, and very possibly a neighbourhood you’ll want to come back to.
Chicago is worth the trip. Just go in with your eyes open about what’s on the bill.
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