Palmer House Hilton reopens

Danielle Braff

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The Palmer House Hilton is reopening.Palmer House Hilton.

The famous Chicago hotel closed for a year, but announced reopening plans.

(Chicago) By Danielle Braff

Socially distanced, masked Chicagoans gathered around the Palmer House Hilton during the pandemic to say final “goodbyes” to the hotel that’s hosted Judy Garland, Frank Sinatra, Ella Fitzgerald and more. They peeked into the lobby where the original chocolate fudge brownie was created and served, and they took photos in front of the building which housed the first hotel elevator.

But it wasn’t time for the Palmer House Hilton to leave Chicago just yet. They announced that they are actually planning on reopening their doors on June 17. Yes, the Palmer House Hilton has survived the pandemic. 

“Reopening a grand hotel of this stature is no easy task,” says Dean Lane, the area general manager of the Palmer House. “In the months leading up to reopening day, the team at Palmer House vacuumed over 4 miles of carpet, changed 10,000 light bulbs, and for the first time, filled 14,600 gallons of water into our new swimming pool.” 

They’ve come through larger hurdles than a few repairs, cleaning and the creation of a swimming pool to get here, however.

Around since 1871, the Palmer House was first destroyed by the Great Chicago fire. It was rebuilt by Potter Palmer for $1.7 just 2 years later, re-opening in 1873. 

And then came the pandemic. The Cook County Circuit Court accusted the owner of the Palmer House Hilton of defaulting on the $333.2 million mortgage in August 2020, and the hotel went into foreclosure. The suit said the owner, an affiliate of Thor Equities, owned $337.8 million which included the principal, the interest and the penalties. There was an additional $94.4 million mezzanine loan (a higher-interest debt). 

Lane says the foreclosure, however, is part of a litigation process regarding property financing that’s affecting an increasing number of commercial real estate groups throughout the globe resulting from the pandemic.

“The appointing of a receiver is part of a legal process, and doesn not impact the operating status of the hotel,” he says. He declined to respond to questions regarding how the hotel got the funds to renovate and reopen the hotel.

Still, Lane says the reopening of the hotel had always been based on the loosening of the Covid guidelines with the city and the state, along with the return of business levels. Since Chicago moved into Phase 5 with a full reopening on June 11, they decided the time was right.

In addition to the new indoor pool, Lane says the Palmer House Hilton will be celebrating its 150th anniversary this year, and plan on celebrating via multiple events throughout 2021. 

“When the hotel is faced with adversity, we will continue to always rise like a mythological phoenix,” Lane says. “The challenges of the pandemic are now transitioning into triumph for us.” 

Chicago’s hotel sector is crawling out of the basement in terms of occupancy driven by leisure travel, but there’s still a long way to go: years, not months, says Jon Peck, principal of Peck Hotel Consulting, a Chicago-based hotel consulting firm. 

According to data from STR, which offers industry hospitality data, hotel occupancies in downtown Chicago are at about 20 percent, based on Chicago’s open hotels. About ⅓ of the more than 300,000 rooms in Chicago aren’t counted because they are currently closed. 

As demand picks up, the other persistent challenge for hoteliers in Chicago and throughout most of the country is staffing. Just as hotels recover from the demand shock, they are (in many cases) unable to find the staff they need to care for their customers, Peck says.

“Government and the private sector need to work on common sense solutions to resolve this sooner, rather than later,” he says.

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I'm a lifestyle writer with a focus on trends, fashion, parenting and business. My stories have appeared in the New York Times, Washington Post, Chicago Tribune and more. I live just outside Chicago with my husband, daughter, two cats and a dog. I love to travel to exotic locations and to read memoirs.

Chicago, IL
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