A Spanish firm has opened a 390-room hotel near Chicago’s Magnificent Mile shopping district, a project that began when few major hospitality projects were breaking ground nationally less than two years into the pandemic.
Riu Hotels & Resorts said the opening of its Riu Plaza Chicago hotel marks the company’s fifth urban hotel in the United States and 11th worldwide. The 28-story hotel at 150 E. Ontario St. is just steps from the city’s best-known shopping corridor on North Michigan Avenue.
Based in Mallorca, Spain, Riu is known for huge, upscale hotels that are popular among international travelers.
The firm owned by Spain’s Riu family took the optimistic move of buying the Chicago land for just over $28 million in late 2021 as the hospitality industry’s occupancy was far below pre-pandemic levels. The family showed further conviction in the Chicago project by funding about $150 million in cash at a time when construction loans for hotel projects were scarce.
Riu now has a Toronto hotel under construction, and the firm recently acquired a site for a third New York hotel. Existing hotels are in cities including Berlin, London, Miami, Dublin and San Francisco.
Founded in 1953, Riu is now owned by the family’s third generation. Just over a year into the pandemic, Riu also bought the 49% stake in its real estate the company didn’t already own, paying $817 million to hotel firm TUI.
The Chicago hotel includes a 27th-floor bar, called The Rooftop, which Riu said in a statement will open in September. The hotel also has a restaurant, lobby bar and gym.
The Rooftop’s glass balcony will resemble the one at Hotel Riu Plaza Espana in Madrid, the statement said.
The Riu Plaza Chicago is opening in a significantly improved environment, with the volume of U.S. hotels under construction reaching its highest level in 16 months during June, according to CoStar data.
In downtown Chicago, there are three hotels with a combined 601 rooms under construction, according to CoStar’s hospitality analytics firm, STR. There are 12 hotels with a combined 2,806 rooms in final planning and another seven hotels with a combined 1,974 rooms in planning, according to STR.
Downtown Chicago hotels had 62.4% occupancy in June, up from 60.3% a year earlier. Revenue per available room was $138.44 in June, up from $134.30 a year earlier.
Other projects that were completed in the city while the Riu Plaza Chicago was under construction included the 280-room citizenM within the 47-story tower at 300 N. Michigan Ave. and the 192-room St. Regis Chicago within the 101-story, Jeanne Gang-designed skyscraper at 363 E. Wacker Drive.
Chicago developer Prime Group, led by Mike Reschke, was hired by Riu to develop the hotel, with construction starting in early 2022.
The project was among several big projects undertaken by Reschke’s firm since the onset of the health crisis, including a deal to redevelop and eventually sell the Helmut Jahn-designed James R. Thompson Center to Google, which eventually plans to occupy the glassy structure with thousands of Chicago employees.
Reschke also is involved in a deal to buy the historic Jewelers Building at 35 E. Wacker Drive and possibly convert part of the 40-story tower to a hotel, as well as a project with a different partner to redevelop the former Conrad Hotel at 101 E. Erie St. to a Marriott Residence Inn.