As a Wisconsin Center District committee is set to meet today to provide final analysis and recommendations for the idea of building a 650-room convention headquarters hotel to support the Baird Center, a hotel industry analyst who reviewed detailed market data from CoStar for downtown Milwaukee says a massive increase in demand would be necessary to support that hotel, other hotels planned downtown and existing hotel inventory downtown.
The new analysis from Hospitality Marketers International Inc., which has offices in New Berlin and Fort Myers, Florida, revealed that if a 650-room convention headquarters was built in downtown Milwaukee, the downtown market would need to fill more than 275,000 additional hotel rooms annually to achieve a 70% occupancy level, the industry standard for a healthy hotel market.
The figure includes both the rooms the new property would need to fill and the demand required across the broader market to bring annual downtown hotel occupancy up to 70%. Last year, downtown Milwaukee’s top 15 hotels had an occupancy rate of about 60%, according to Hospitality Marketers International president Greg Hanis. Adding new hotel room supply to the downtown market, especially with a huge 650-room hotel, would further strain the market, he said.
The addition of a 650-room hotel downtown would lower the market’s annual occupancy rate to about 50%, based on current demand, Hanis said. And that doesn’t account for the addition of other new hotels planned for the downtown area, including the 156-room AC Hotel by Marriott planned in Deer District and another hotel planned in the Third Ward.
The 650-room convention hotel would need 166,000 occupied rooms a year to achieve 70% occupancy and the rest of the downtown market needs another 108,000 occupied rooms a year to improve its occupancy rate to 70%, Hanis said.
Given current development costs, Hospitality Marketers International’s analysis noted that a 650-room convention center hotel would likely need to operate at one of the highest price points in the downtown Milwaukee market — potentially exceeding a $300 average daily rate (ADR) — to be financially viable. The cost to build a 650-room convention headquarters hotel for the Baird Center has been estimated at up to $455 million.
When asked if he thought downtown Milwaukee could support a 650-room hotel with a $300 ADR, Hanis said, “my honest opinion to you, no, Milwaukee is not that strong of a market. But that’s what’s going to be needed to support it.”
The ADR for the top 15 downtown hotels in 2025 was $183.65, Hanis said.
“That’s not a real strong ADR,” Hanis said. A healthy ADR for the market would be at least $225, he said.
With lodging demand in downtown Milwaukee growing only 2.2% annually from 2023 to 2025, the market’s current growth rate doesn’t support large-scale expansion of downtown hotel supply, Hanis said. Downtown hotels have had lower demand from business travelers since the COVID-19 pandemic and the reduction of offices downtown, which has particularly reduced hotel occupancy on weeknights, Hanis said.
Greg Hanis
While much of the discussion about the idea of building a large convention headquarters hotel to support the Baird Center has focused on cost, funding sources and location, not enough attention has been paid to the demand side, Hanis said.
“You got a proposal on the table for a 650-room hotel. . . before you even look at the financing of it, the market itself can’t support it,” he said.
The recommendation to build the hotel came from a study of the idea, commissioned by the Wisconsin Center District. The 116-report, prepared by Chicago-consulting firm Hunden Partners and released to the public in January, said that Milwaukee’s $456 million expansion of the Baird Center in 2024 has left the city with abundant meeting space, but not enough hotel rooms nearby, particularly in the upscale and luxury space.
Hunden estimates the city will forfeit at least 330,000 hotel room nights annually between 2024 and 2027, with roughly 18% of that loss tied directly to insufficient hotel supply. Compared with peer convention markets, Milwaukee is hundreds of rooms short both in large headquarters hotels and in walkable proximity to the Baird Center, Hunden says.
Hunden also evaluated six potential downtown sites for a new convention headquarters hotel, and said the current site of the Miller High Life Theatre was the most viable.
Gary Witt, chief executive officer of Pabst Theater Group, which has a contract to book shows at Miller High Life Theatre for the Wisconsin Center District, the owner of the building, has criticized the idea of demolishing the theater to build a hotel there and has accused the Hunden study of fulfilling a predetermined outcome preferred by WCD president and CEO Marty Brooks, who spearheaded the Baird Center expansion.
Other criticism of the Hunden study recommendations has come from major downtown Milwaukee hotel owners, including Milwaukee-based The Marcus Corp.
At a March WCD Highest and Best Use Analysis Committee meeting, a special committee formed to weigh the convention hotel idea, Marcus Corp. chief financial officer Chad Paris said the proposal “seems to be guided by an ambition of growth at any cost.” Paris warned that if the ambition isn’t tempered, it will create long-term harm to existing downtown hotels.
Marcus Hotels & Resorts chief commercial officer Andrew Flack echoed sentiments that Milwaukee’s hotel market is not strong enough to support the development of a huge convention hotel, stating that Milwaukee has a hotel demand problem — not a supply problem. Flack said at the March meeting that there are more than 300 nights a year where the city’s hotel rooms are “nowhere near full,” and less than 30 nights annually where rooms are nearly sold out.
However, Visit Milwaukee president and CEO Peggy Williams-Smith said at a meeting of the committee that the idea of a convention center hotel should be viewed as part of a long-term strategy rather than an immediate project. It would take several years to plan and build a new convention headquarters hotel, and market conditions could change by then. Williams-Smith noted that the recently expanded Baird Center was intended as a long-term investment in the city’s convention industry.
But Hanis said the Baird Center expansion may have created a convention center overbuilt “for what the city can support with (its) hotel operations.”
“They should have looked at the hotel demand need and determined what is actually feasible for us to accommodate in Milwaukee,” Hanis said.
Officials for the Wisconsin Center District, Visit Milwaukee and The Marcus Corp. declined to comment for this report, and referred to their previous statements on the issue.
