Destinations

Only 3% of Chicago’s Tourists Are International Visitors

Jun 13, 2014 6:13 am

Skift Take

It’s not the one-off, big things that will create more visitors. It’s many things that add up to a great vacation.

— Jason Clampet

Free Report: The State of Student Travel

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Michigan Avenue. Getty Images


Chicago may have peaked a little early as a tourist destination — by more than a century.

The city drew 12 million visitors, then about one-fifth of the U.S. population, to the 1893 World’s Columbian Exposition celebrating the 400th anniversary of Christopher Columbus’s arrival in America. The extravaganza in a boggy swamp near Lake Michigan was a defining moment for an ascendant metropolis.

Since then, the middle-America city has struggled to compete for tourists, especially from overseas. Chicago ranks ninth for non-U.S.-resident visits, well behind New York and Los Angeles, as well as smaller locales such as Miami.

“There was never a focus, for decades, from Chicago on the international market,” said Don Welsh, chief executive officer of Choose Chicago, the city’s tourism agency. “It was so focused on the convention business and the regional business.”

As poet Carl Sandburg wrote in 1914, Chicago was “Hog Butcher for the World, Tool Maker, Stacker of Wheat.” Those jobs are gone. That’s why Chicago Mayor Rahm Emanuel, counting on his ties to Washington and Hollywood, is trying to boost tourism by courting two new museums offering jarring contrasts – – one featuring Luke Skywalker and Princess Leia, the other Barack Obama and his wife, Michelle.

Emanuel’s push for Obama’s presidential library and a museum for filmmaker George Lucas, 70, is fresh evidence of travelers’ growing importance to cities around the globe. International tourism in the U.S. alone grew to $200 billion in 2012 from $150 billion in 2009, according to the World Bank.

Job Growth

The timing of Emanuel’s campaign couldn’t be more urgent. Job creation in the metropolitan area grew by just 0.8 percent in the year ending in February, compared with 2.1 percent in Los Angeles and 1.3 percent in New York, according to the U.S. Bureau of Labor Statistics.

Even more pressing, ballooning pension liabilities threaten Chicago’s solvency. With 2.7 million people, it has the lowest credit rating among the nation’s 10 largest cities. Where the Columbian Expo was about international prestige and answering Paris’s four-year-old Eiffel Tower with a 264-foot Ferris Wheel, this is about making money. And fast.

Moving up another notch in international-visitor rankings equals $1 billion in new revenue, Emanuel, 54, has said. Visitors from outside the U.S. spend on average $4,500 per trip at hotels, restaurants and other businesses — almost eight times what domestic tourists shell out on a typical vacation or business trip, according to U.S. travel-industry figures.

Moving Up

In Chicago, about 26,000 jobs can be attributed to the city inching up in 2012 to 9th from 10th in foreign visitors, Emanuel said during a June 4 interview on “Chicago Tonight,” a public television show. Still, there’s no chest-thumping, not with New York, Miami, Los Angles, Orlando, San Francisco, Las Vegas, Honolulu and Washington ahead of it.

Chicago can’t change one apparent disadvantage: Seven of the eight higher-ranked cities are on or near a coast. That underscores the ambition of the mayor’s stated goal: advance to the top five U.S. cities for international visitors by 2020.

“We were lagging on convention and tourism,” Emanuel said in the June 4 interview. “We’ve made reforms, been smarter, more efficient. And now more people are going to work in the tourism and convention industry and the visitor industry because of it.”

Drawing visitors means overcoming an identity shaped by political corruption and crime, from Prohibition-era mobster Al Capone to worldwide headlines about Chicago’s more than 500 murders in 2012.

U.S. Visitors

In 2013, Chicago set a record for arrivals, with 48.4 million, up 4.3 percent from 2012, according to Choose Chicago. Yet virtually all of them — 97 percent — were U.S. residents. Non-U.S. visitors totaled 1.4 million, up 3.9 percent from 2012, with the biggest growth from Asia and South America.

The pursuit of tourists didn’t begin with Emanuel, Obama’s White House chief of staff from 2009 to 2010. Former Mayor Richard M. Daley pushed for the redevelopment of what was then a lakefront eyesore, creating Navy Pier, a destination that now draws 9 million a year and is the top attraction in the state of Illinois. Daley was also the chief promoter of the downtown’s outdoor centerpiece, Millennium Park, which marks its 10th anniversary this year.

Prior to Emanuel taking office in 2011, the city had little international promotional presence. It now has 10 global sales and marketing offices in such places as London, Sao Paulo, Mexico City, Toronto, Beijing and Tokyo.

‘Star Wars’

The question is whether attractions built around the Obamas — proposals for the library are due June 16 — and the “Star Wars” creations of Lucas can help lift Chicago into the ranks of those cities.

Chicago’s location in the center of the U.S. has long made it popular for convention organizers who have helped fill downtown’s 37,000 hotel rooms. Business travelers also come to interact with the 31 Fortune 500 corporate headquarters in the metropolitan area, including global giants Boeing Co., McDonald’s Corp. and United Continental Holdings Inc. They don’t necessarily come to have fun, though.

The mayor’s latest push is a nighttime light show to be built to spotlight a still-under-construction promenade along the formerly filthy Chicago River. He’d like the Lucas museum located on what’s now a parking lot near Soldier Field, where the Chicago Bears play National Football League games.

“This is an incredible opportunity to expand your educational, cultural offerings as a city, to your residents and people who want to come,” Emanuel said.

Tourism Trade

Chicago isn’t the only U.S. city pushing to expand tourism. The effort goes all the way up to the White House because of the importance to the economy. In 2013, the travel and tourism industry accounted for 8 million jobs, including 1.3 million supported by international tourists, according to a White House report last month. The industry contributed 27 percent of services exports, accounting for a trade surplus of $57 billion.

Chicago, New York and Honolulu — all cities where Obama spent parts of his life — are competing to host his presidential library, which will open after he leaves office. The institution could draw almost twice the 425,000 annual visitors as the Ronald Reagan Presidential Library and Museum in Simi Valley, California, according to an estimate by economics-research firm Anderson Economic Group of East Lansing, Michigan.

Library Frontrunner

The group’s report, released in mid-May, was commissioned by the University of Chicago, the frontrunner in the competition for the library, given that the Obamas’ home is in the neighborhood and both previously worked there.

The annual economic impact to Chicago would be $220 million, the report says. It would create an estimated 1,900 permanent jobs, increasing annual local earnings by $56 million.

Even that $220 million in economic activity, though, would translate into a mere $5 million to various tax-revenue streams for Chicago. So the Lucas museum — more of a longshot with San Francisco, near where the California native lives, and Los Angeles also bidding — could be more financially important.

The billionaire filmmaker is looking for a home for his assemblage of art and design, from 20th century illustrations by Norman Rockwell to “Star Wars” memorabilia like the senate gown of Queen Amidala and Darth Vader’s costume. He and his wife, Mellody Hobson, a Chicagoan and Obama family friend, live part-time in the city and have met Emanuel.

Star Wars, especially, has held its popularity from generation to generation, and the franchise’s value could continue to grow with plans to release the first of the long- promised final trilogy in the series in 2015.

While Choose Chicago’s Welsh called both the Obama library and estimated $300 million Lucas museum “iconic” attractions, he said the latter would probably be a bigger international draw.

“I believe Lucas would appeal to a more general audience,” Welsh said. “It could be one of the biggest drivers of new business we have seen in the city.”

To contact the reporters on this story: John McCormick in Chicago at jmccormick16@bloomberg.net; Tim Jones in Chicago at tjones58@bloomberg.net. To contact the editors responsible for this story: James Hertling at jhertling@bloomberg.net.

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