Leaders from three prominent companies in Milwaukee’s hospitality and entertainment industries say a study recommending a new convention center hotel in Milwaukee is flawed and its recommendation would hurt the city’s already struggling hotel market.

Executives from Marcus Corp., Jackson Street Holdings and The Pabst Theater Group raised concerns Thursday at the third meeting of a Wisconsin Center District special board committee reviewing the study.

Prepared by consulting firm Hunden Partners, the study suggests a roughly 650-room hotel could help Milwaukee attract larger conventions and boost activity at the expanded Baird Center. Experts have estimated the project could cost around $500 million.

Representatives from Marcus Corp. said the report overlooks the current condition of Milwaukee’s hotel market and is focused on “growth at any cost.”

Downtown hotel occupancy was around 62% last year, well below the roughly 70% rate considered healthy for the industry, according to Marcus Corp. chief financial officer Chad Paris. Adding hundreds of new rooms would likely oversupply the market rather than create new demand, he said.

“This is not a case of ‘if you build it, they will come,’” Paris said. “If you build it, you’ll dilute the market with oversupply and likely see the failure of other hotels.”

Marcus owns several major downtown hotels that serve the convention center, including the Hilton Milwaukee, the Pfister Hotel and Saint Kate – The Arts Hotel.

Paris said the company has already adjusted its investment strategy because of weaker demand. Marcus recently completed a $42 million renovation of the Hilton’s historic main building but chose not to remodel the hotel’s newer 175-room addition. Instead, that portion was converted into a separate limited-service property called The Marc.

Marcus Hotels & Resorts chief commercial officer Andrew Flack also criticized the Hunden study’s analysis, arguing that it compares Milwaukee with convention destinations that have far different tourism and business dynamics.

The report examined markets such as Austin, Charlotte and Nashville, which Flack said are not realistic competitors for Milwaukee.

The study estimates Milwaukee will miss out on roughly 73,800 hotel room nights annually between 2024 and 2027 because the city’s hotel package lags its competitors. But Flack said even capturing all of that demand would fill only about 31% of a new 650-room property.

Flack also noted that virtually every convention center hotel built in the country over the past two decades has required public subsidies. Using hotel tax revenue to support such a project would mean existing hotels are effectively funding a competitor.

Asked if he had comments after the Marcus presentation, Jackson Street Holdings president Mark Flaherty simply said, “I agree.” Jackson Street Holdings owns The Westin Milwaukee, Milwaukee Marriott Downtown and SpringHill Suites.

Pabst Theater Group CEO Gary Witt also questioned the study’s credibility and raised concerns about its neutrality.

Witt argued that transportation is a bigger obstacle to attracting large conventions. He said Milwaukee needs stronger connections to Chicago and more direct flights through Milwaukee Mitchell International Airport, which has fewer direct flights than all of the cities included in Hunden’s competitive set.

“We have to embrace the philosophy, like it or not, that O’Hare is our airport,” Witt said. “That’s your answer. I don’t know why the concert guy had to figure it out for you.”

Witt also said Wisconsin Center District CEO Marty Brooks had a say in the study’s conclusions. Witt said that before the study was announced, Brooks told him the goal was to replace the UW-Milwaukee Panther Arena.

Brooks has denied Witt’s claim. The final Hunden report did not recommend removing the arena. Instead, it identified the Miller High Life Theatre — another Wisconsin Center District-owned venue where the Pabst Theater Group promotes concerts — as the preferred site for a future convention hotel.

Further, Witt said that, during a focus group for the study, a rendering showed a hotel on the Panther Arena site.

“If I’m lying, I’m telling Marty Brooks to sue me today,” he said during the meeting.

While critics have raised concerns about the feasibility of a new convention center hotel, tourism officials say hotel capacity remains a significant challenge for Milwaukee’s convention business.

At the committee’s last meeting, Visit Milwaukee president and CEO Peggy Williams-Smith told district officials the recently expanded Baird Center was intended as a long-term investment in the city’s convention industry. But meeting planners frequently bypass Milwaukee because large groups must spread attendees across several hotels.

Still, Williams-Smith said the idea of a convention center hotel should be viewed as part of a long-term strategy rather than an immediate project.

The Wisconsin Center District committee reviewing the Hunden study is expected to present its findings to the full board in May.