Hotel & Hospitality Tax Appeals

Hotel & Hospitality Property Tax Appeals

Hotels, motels, and hospitality properties face unique assessment challenges in Cook County. Fluctuating occupancy, seasonal revenue, and the impact of market disruptions mean that mass-appraisal models almost always overstate your property’s value. We specialize in building income-based appeals that reflect your property’s actual performance — not what the Assessor assumes.

Why Hotel Assessments Are Almost Always Inflated

The Cook County Assessor values hotels using broad market assumptions that rarely match the reality of your specific property. Common issues include:

• Occupancy overestimates: The Assessor often assumes stabilized occupancy of 70–80%, even for properties running well below that.
• Revenue per available room (RevPAR) assumptions: Generic market-wide ADR and RevPAR figures don’t account for your property’s competitive position, condition, or brand tier.
• Capitalization rate errors: The cap rates used in mass appraisal are frequently lower than what the market actually demands for hospitality assets, inflating the implied value.
• Deferred maintenance and renovation costs: Properties undergoing PIP (Property Improvement Plan) work or in need of capital investment are assessed as if they were in stabilized condition.

Our Approach to Hotel Appeals

We build hotel appeals using the same institutional-grade methodology that major hospitality REITs and lenders rely on:

• Income analysis using your actual P&L, STR reports, and market-specific RevPAR data.
• Comparable sales from CoStar, Real Capital Analytics, and proprietary transaction databases.
• Capitalization rate research drawn from CBRE, JLL, and HVS market reports.
• Management and franchise fee adjustments that the Assessor’s model ignores.

Get a Free Assessment Review

If you own or manage a hotel property in Cook County or we will analyze your assessment at no cost and tell you whether there’s an opportunity to reduce your tax burden. No upfront fees. Contingency-based representation.

Call 312.648.6184 or request your free review online.

Explore More Property Tax Appeal Services

• Office Building Appeals
• Retail Property Appeals
• How Cook County Appeals Work
• Cook County Tax Incentives

Frequently Asked Questions

How are hotels assessed in Cook County?

Hotels are valued using the income approach on stabilized NOI — revenue per available room (RevPAR) times rooms times 365, less departmental and undistributed expenses, less fixed expenses including property taxes. The income must be adjusted to remove intangible business value (franchise fees, management fees, going-concern premium). Assessors often fail to separate intangibles, which inflates the real estate assessment.

What is “business value” and why does it matter?

Only the real estate portion of a hotel’s total value is assessable. The hotel’s revenue includes business components — brand affiliation, management expertise, franchise rights, workforce, going-concern — that are taxable as income but not as real estate. Illinois appellate courts have repeatedly affirmed that hotel assessments must exclude intangible business value. Many Cook County hotel assessments don’t.

How did COVID affect hotel assessments?

Chicago hotels saw occupancy collapse from 75%+ to sub-40% through 2020–2022. Full-service urban hotels haven’t fully recovered — many remain at 2019 RevPAR in nominal dollars, meaning real (inflation-adjusted) performance is materially worse. Assessments anchored to 2019 market peak need to be re-benchmarked to current operating reality, and the Board of Review has been receptive to documented post-COVID performance adjustments.

Can I appeal a limited-service hotel differently than full-service?

Yes. Limited-service properties (Hampton Inn, Fairfield Inn, Holiday Inn Express) have lower food and beverage revenue, leaner operating models, and different market comps. Full-service hotels (Marriott, Hilton, Hyatt) have meaningful F&B, banquet, and meeting-room revenue that must be separated from room revenue for the real estate valuation. Same principles, different execution.

What market cap rate applies to Chicago hotels?

Cap rates for Chicago-area hotels currently range 8.5%–11.5% depending on service level, submarket, brand, and age. Assessors often apply 7.5%–8.5%. The spread is massive in terms of resulting value: a 9.5% cap instead of 7.75% on a $5M NOI hotel is roughly $12M vs. $15M — a 20% reduction in assessed value.

What if my hotel is in receivership or bankruptcy?

Operational distress, foreclosure, receiver-run status, or bankruptcy is directly relevant to market value. A buyer of a distressed hotel pays dramatically less than a buyer of a stabilized asset — sometimes 30–50% less. The Assessor and Board of Review must consider current condition, and distressed-sale comparables are valid evidence in appeal. Documented distress is one of the strongest arguments available.