Downtown Milwaukee’s hotel market would need to fill an additional 108,000 room nights a year to reach the industry-standard 70% occupancy rate, according to Greg Hanis, president of New-Berlin based hotel industry consulting firm Hospitality Marketers International. Currently, the city’s 15 largest downtown hotels average closer to 60% occupancy – a level that makes new development harder to justify.

That’s notable considering a few hotels are planned in the downtown area, another long-planned project has been scrapped and civic leaders have examined and debated the need for a huge new convention hotel downtown.

Hanis said the diagnosis of Milwaukee’s downtown hotel market challenges isn’t the result of a single factor.

In addition to soft demand for rooms, financial hurdles, including rising development costs, higher interest rates and lending and equity requirements, have made it more difficult to build new hotels downtown. Hanis said a decline in business travel has hurt the downtown hotel market and is tied to office closures, especially since the COVID-19 pandemic, and the conversion of office buildings into apartments and student housing.

“You can’t build additional hotel rooms until you figure out where you’re going to get more demand,” Hanis said.

He added that more residential buildings downtown will benefit businesses, but they “don’t sell hotel rooms.”

And across the broader Milwaukee region, the gap is even wider.

Hanis said with the broader metro Milwaukee hotel market at a 59% annual occupancy rate, the area would need to sell nearly 1,100 more rooms every night – or 2.6 million more rooms per year – to reach the 70% benchmark.

Doug Nysse, hotel industry expert and director of project and development services at Colliers, echoed sentiments that the financing climate is a major barrier to building new hotels because existing hotels are often worth less than the cost to build new ones, he said.

Seasonal events in the city such as festivals and conferences do boost hotel room sales, Nysse said.

Data from CoStar also shows that the downtown hotel market is slowly rebounding from the impacts of the pandemic, with average daily rate climbing from $106 in 2020 to $167 in 2025, but key metrics including occupancy, average daily rate and revenue per available room are still below pre-pandemic levels.

Weekday business travel has eroded, and without a strong base of office workers and corporate activity downtown, weekday occupancy remains too soft to support new hotel construction, Hanis said.

Downtown Milwaukee hotel market performance

Credit: CoStar

Convention hotel need examined

The Wisconsin Center District commissioned a study by Chicago-based Hunden Partners which recommended construction of a 650-room convention hotel to support the $456 million expansion of WCD’s Baird Center.

Had a hotel of that size been built, the downtown market would need a huge demand increase, filling an additional 275,000 room nights annually to achieve a 70% occupancy rate for the downtown area, Hanis says.

The project has not moved forward after a WCD special committee, created to evaluate the idea, concluded that a larger, exploratory committee was needed to dive deeper into various questions the committee was unable to conclusively address, including market strength concerns, location and financing options.

Additionally, Milwaukee-based HKS Holdings LLC, which planned to develop a 158-room Hilton Tempo hotel within the former Milwaukee Journal Sentinel complex, dropped the project due to high construction costs and other financial difficulties.

That project had taken several years to iron out, and according to Nysse, delays can be fatal in development.

“Time kills deals,” he said.

Some other downtown hotel projects are still in the works including a 156-room AC Hotel by Marriott hotel in Deer District and a 60-room TRYP by Wyndham boutique hotel in the Haymarket neighborhood just north of downtown.

Moving forward, Hanis argues that Milwaukee must focus on generating new lodging demand – not just adding rooms. That could include attracting companies and boosting downtown office activity, he said.

Notable downtown Milwaukee hotel projects:

AC Hotel by Marriott
Address: 430 W. State St.
Size: 156 rooms
Height: 7 stories
Developer: North Central Group Hospitality
Project cost: $50 million

TRYP by Wyndham hotel
Address: 419 W. Vliet St.
Size: 60 rooms
Height: 3 stories
Developer: Scott Crawford Inc.
Project cost: $16 million

Third Ward building redevelopment
Brand: To be determined
Address: 224 E. Chicago St.
Size: 83,260 square feet
Height: 3 stories
Developer: North Central Group Hospitality