Officials in the city of Chicago have increased by one percentage point the amount of tax City Hall takes from every hotel night recorded.

With budget deficits topping political agendas around the world, Chicago coffers will now claim 4.5 per cent of the cost of every night spent in the city.

In total the change will see the total hotel tax reach 16.39 per cent.

The city expects the tax hike to generate about $14 million to help shrink budget deficits.