Downtown Milwaukee continues to see hotel development proposals following the boost from last summer’s Republican National Convention — even as the city’s largest hotel is reducing its room count.
Meanwhile, the May opening of the expanded Baird Center is drawing more conventions. That could eventually spur construction of a new hotel with upwards of 500 rooms.
Those dynamics, along with one downtown hotel in bankruptcy court and two others sold through foreclosure, create differing views of downtown’s hospitality business.
Greg Marcus, whose Marcus Corp. owns the Hilton Milwaukee, Pfister Hotel and Saint Kate — The Arts Hotel, says it’s premature to consider a new large hotel focused on hosting conventions and other large events.
Peggy Williams-Smith, Visit Milwaukee president and CEO, agrees downtown isn’t yet ready for a new convention-focused hotel. But her publicly funded nonprofit travel promotion group is taking steps that some day might spur such a development.
Here’s what to know.
Downtown hotels had a decent 2024
Milwaukee-area hotels finished 2024 with a collective occupancy rate of 55.8%, a dip from 56.5% in 2023, according to real estate data provider CoStar.
The average daily room rate was $135.01, up from $129.20 in 2023.
Revenue per available room — perhaps the most important hotel industry performance measure — was $75.29, compared to $73.05. That’s a 3% increase.
Narrowing the focus to downtown hotels shows revenue per available room of $102.28, compared to $95.61 — a 7% increase.
Downtown occupancy was 59.1%, and the average daily rate was $173.05, according to CoStar.
How Milwaukee compares to its peers
Milwaukee-area hotels had slower revenue per available room growth, relative to some peer metro areas, compared to 2019 − before the COVID-19 pandemic devastated the hotel industry.
The 2019 mark for the Milwaukee area was $72.55 revenue per available room, increasing 4% to $75.29 in 2024.
Other Midwest metro areas with comparable populations saw the following revenue per available room increases during that same period: Cincinnati, 7%; Indianapolis, 19%; Kansas City, 22%; Cleveland, 26%.
Milwaukee’s hotel industry lags, Marcus says
Milwaukee has added around 1,400 hotel rooms since 2016 — even as its hotel business lags other Midwestern cities, Marcus said.
Baird Center’s publicly funded $456 million expansion doubled its space — giving Milwaukee the ability to host more conventions, said Marcus, whose company operates Marcus Hotels & Resorts Inc.
That’s a key to helping local hotels become healthier, he said. Any talk of developing a new convention center-oriented hotel should be sidelined until that business recovers, Marcus said.
Marcus announced in December a $40 million renovation at the 729-room Hilton Milwaukee, 509 W. Wisconsin Ave., the city’s largest hotel.
That project includes mothballing nearly 25% of its guest rooms over the next year or so.
That decision was tied to hotel industry market conditions, projected room supply and demand, and the risks associated with a possible competing new large hotel that would require “significant public subsidy,” Marcus said.
Business travel changes hurt demand
Changes in business travel patterns have hurt demand for hotel rooms, Marcus said. He cited more remote meetings, fewer people sent to off-site meetings, and employees traveling less frequently.
Meanwhile, leisure travel has slowed and conventions continue to recover from the pandemic, he said.
Corporate travel has lagged other travel segments, said hotel industry consultant Greg Hanis, president of Hospitality Marketers International Inc.
Also, the Republican National Convention, which drew around 50,000 visitors, did little to boost occupancy at Milwaukee-area hotels, Hanis said. That’s because it happened in July — when most hotels are usually busy with vacationers, he said.
Still, the average daily rate for area hotels was 33% higher in July compared to July 2023, according to the CoStar data.
Meanwhile, Visit Milwaukee is seeing increased Baird Center bookings over the next few years − helped in part by the RNC’s visibility, Williams-Smith said.
Marriott in Chapter 11, other hotels foreclosed
Financial problems at some downtown hotels surfaced before the RNC.
The 205-room Marriott Hotel, 625 N. Milwaukee St., filed for Chapter 11 bankruptcy protection in April.
The Marriott, whose operator didn’t respond to an interview request, is reorganizing its finances under bankruptcy court supervision. It has liabilities of $51.3 million and assets totaling $28 million, according to court records.
The 132-room Cambria Hotel, 503-521 N. Plankinton Ave., was sold in a December 2023 foreclosure auction. And the 138-room Hampton Inn & Suites, 176 W. Wisconsin Ave., was taken over by its lender in August 2023 before being sold two months later.
The 100-room Iron Horse Hotel, at 500 W. Florida St. in Walker’s Point, reorganized under Chapter 11 protection and had its bankruptcy terminated in October, according to court records.
More downtown hotels are coming
More downtown hotel developments are coming.
Construction is to start by late second quarter on a seven-story, 160-room Tempo by Hilton, 308 W. Kilbourn Ave. That site is a parking lot at the Journal Commons mixed-use development.
That project’s revised design was approved in January by the Historic Preservation Commission.
Development firm HKS Holdings LLC and its architect, Kahler Slater, replaced the hotel’s indoor parking structure with off-site parking — cutting construction costs.
Also, a seven-story, 156-room Moxy Hotel, proposed for 430 W. State St., is to undergo Plan Commission review on Feb. 17.
That site, owned by a Milwaukee Bucks affiliate, is off North Phillips Avenue between the FPC Live concert venue under construction and Fiserv Forum.
The proposed operator, Middleton-based NCG Hospitality, also runs The Trade hotel, which opened in 2023 at 420 W. Juneau Ave. That’s north of Fiserv Forum on a Deer District parcel owned by a Bucks affiliate.
The main difference between The Trade and Moxy: the latter focuses on guests attracted by concerts and sports events, says Andy Inman, NCG Hospitality chief development officer.
Convention center hotel could be next to Hilton
Downtown has two convention center-oriented hotels: the Hilton and the 481-room Hyatt Regency Milwaukee, 333 W. Kilbourn Ave.
If a third such hotel is developed, it could be on a city-owned parking lot in the 400 block of West Wisconsin Avenue — just east of the Hilton.
The Milwaukee Redevelopment Authority is seeking development proposals for that site. Part of it was converted last June into Vel R. Phillips Plaza.
Marcus’ view is that many of downtown’s newer hotel rooms have been subsidized — even though city tax incremental financing hasn’t been used.
He cites The Trade and proposed Moxy being on sites given to the Milwaukee Bucks as part of Fiserv Forum’s public financing.
Also, Marcus points to hotels partly financed through the federal government’s EB-5 program. It grants visas to foreign nationals in exchange for investments which create jobs.
Marcus said downtown hotels that used EB-5 cash include the Marriott, Westin, Kimpton Journeyman, Springhill Suites, Aloft, and Brewhouse Inn. Those total just under 1,000 rooms added from 2009 through 2017.
Also, the Tempo by Hilton plans were disclosed through a project brochure on the website of First Pathway Partners. That Milwaukee firm helps developers obtain EB-5 investors.
Marcus said he’s not opposed to all subsidies. But they should be used wisely, he said.
Indeed, the Hilton in May was added to the National Register of Historic Places. That makes it eligible for federal and state historic preservation tax credits which can pay for 40% of qualified remodeling costs.
New large hotel might eventually surface
A large convention center hotel — something with upwards of 500 rooms — could eventually surface as the expanded Baird Center continues to increase its bookings.
“I don’t think we’re ready yet,” said Williams-Smith, of Visit Milwaukee. “But I do know we have to look to the future.”
Visit Milwaukee is starting to prepare for an updated strategic plan focusing on 2026 through 2029, she said.
“I want to make sure the health of existing hotels are at the forefront of what we need to do,” Williams-Smith said.
She was disappointed with Marcus’ decision to close 175 rooms at the Hilton’s newer west wing.
Fewer hotel rooms make it more challenging to land larger conventions, Williams-Smith said.
“I hope eventually he’ll see the need to reopen that wing,” she said.
Tom Daykin can be emailed at tdaykin@jrn.com and followed on Instagram,Bluesky, X and Facebook.
This article originally appeared on Milwaukee Journal Sentinel: Milwaukee has more hotels coming after RNC. But Hilton is cutting rooms and Marriott is in Chapter 11
Reporting by Tom Daykin, Milwaukee Journal Sentinel / Milwaukee Journal Sentinel
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