Timeshares in center cities for City Break tourism: Chicago

City break tourism is a form of cultural heritage tourism where people visit cities to experience their urban-ness.  These tourists tend to stay longer and spend more money and are less inclined to be there to attend sports events etc.

Who knew?  Hilton Grand Vacations, a timeshare company, has a set of city properties that aren't resorts or vacation destinations (like Park City, Utah or Sedona, Arizona).  They have one in Chicago according to Crain's Chicago Business, "Timeshares take off in Streeterville as interest in downtown slowly recovers."

HGV bought the six-story block of 122 rooms on the top floors of the 26-story hotel in 2019. Crain’s reported at the time that Hilton was paying $54.5 million and would renovate the 122 rooms into 78 studios and one-bedrooms. 

The building is a few blocks’ walk from North Michigan Avenue in one direction and Ohio Street Beach and Navy Pier in another. All around are restaurants, cultural amenities like the Museum of Contemporary Art and the Chicago Children’s Museum, and riverwalks on the north and south sides of the river. It is, in other words, a prime location for out-of-towners to stay when they want to take in the best of the city.

While the downtown condo market slowly recovers from the pounding it took in the early 2020s, a different form of ownership has quietly bloomed in Streeterville. Hilton Grand Vacations Club has sold nearly 2,900 timeshares for its Chicago location, the top six stories of a Doubletree Hotel on Ohio Street, according to Chicago Cityscape, which tracks construction and sales in the city. The shares sold for a combined total of about $126.6 million, which amounts to a significant investment in vacation stays downtown.

Timeshares, where owners buy shares that give them a specified amount of time in the property each year, is very different from condo ownership, where the owner has full-time ownership of the real estate. Compared to a condo, a timeshare demands a far smaller investment. Shares at the Hilton Grand Vacation Club Chicago Magnificent Mile, 300 E. Ohio St., sell for between $20,500 and $70,000, according to the sale documents, while the lowest-priced Streeterville condos listed for sale are in the $150,000 range and the average is $566,000.

Photo: Benjamin B. Braun, Pittsburgh Post-Gazette.

Similarly, the converted into apartments train station in Pittsburgh, the Pennsylvanian, is now making some of its room "short term stays" a la AirBnb ("A different track: Part of Downtown’s Pennsylvanian to be available for short-term stays," Pittsburgh Post-Gazette).

So long as it's managed and not to many units are taken off the traditional rental market, I think this is a great way to experience the city, the urban experience, if you don't have much experience with it.  I imagine if the was fully rented, the management wouldn't be doing short term rentals.

Years ago, we stayed at a bed and breakfast in Petersburg, probably 2008. It was across the street from a luggage factory that had been abandoned for decades but was being redeveloped into housing.  

I suggested to the proprietors that they approach the company and create an option for short term stays so people could get a sense for if they wanted to live there.

It turns out this many years later, the project still hasn't been done ("Waukeshaw bags former Petersburg luggage factory for $3M," Richmond BizSense).  But the building stock looks really cool, still.

Visitor accommodations planning.  In past entries, I've argued that cities need to create accommodations plans with a wide range of types of housing and price points, to maximize visitation and tourist spend.