A new high-rise convention center hotel would be beneficial to the Baird Center, two hotel industry experts said, but the real challenge will lie in whether the project can be financed and whether Milwaukee can generate enough year-round demand to sustain it.

A study commissioned by the Wisconsin Center District that was released last month argues that downtown Milwaukee needs a large convention headquarters hotel to remain competitive with peer cities and identified the Miller High Life Theatre site at 500 W. Kilbourn Ave. as the most viable location for a 650-room hotel with additional meeting and retail space. The report argues that the $456 million expansion of the Baird Center has left the city with abundant meeting space but too few nearby hotel rooms, particularly in the upscale and luxury categories.

Greg Hanis, hotel industry analyst and president of Hospitality Marketers International Inc., said he has long believed Milwaukee needs another headquarters hotel to fully leverage the expanded convention center.

“There’s no question it would help the Baird Center’s marketability,” Hanis said. “If you put the property there, you will be the number one hotel in Milwaukee.”

The issue, however, is cost, he said.

Hanis estimates the hotel portion alone would likely exceed $200 million in development costs and would need to command an average daily room (ADR) rate of around $300 to justify that investment. According to a report on downtown Milwaukee’s hotel market from CoStar, the market’s ADR in 2025 was $167.

“When you look at the numbers, this project would never, never, never pencil out,” Hanis said. “The only way to make it work is with a substantial public subsidy.”

Currently, the WCD and the author of the report, Chicago-based consultant Hunden Partners, have not outlined a framework for how the recommended hotel should be financed.

The City of Milwaukee’s longstanding tax increment financing policy has prohibited the use of TIF for hotel development, which is the most common subsidy for hotel developments like this in other markets.

Other potential incentives could include hotel occupancy tax rebates, sales tax rebates or having the WCD fund for the building’s meeting space, according to Doug Nysse, hospitality industry advisor and director of project and development services with Colliers.

Without a defined incentive framework, the project is “not viable whatsoever,” said Nysee.

“To motivate a developer, this deal would probably need one-quarter to one-third equity, one-third to one-half incentives that can effectively be treated as equity, and about one-third debt,” he said.

Even if a financing structure can be assembled, both analysts said the hotel’s long-term success would depend on whether the Baird Center can generate enough consistent convention business to fill it.

Hanis said a 650-room headquarters hotel would likely become the city’s premier property, potentially operating under a major upper-upscale or luxury brand, such as JW Marriott. A new building could offer larger room layouts, upgraded mechanical systems and more modern amenities than much of downtown’s existing hotel inventory, though he noted that recent renovations at the Hilton Milwaukee have narrowed the quality gap between it and any potential new competitor.

At the proposed size, the hotel would need a near-constant rotation of large events.

“You almost have to have 52 large conventions,” Hanis said, “so that you would have a large convention coming in and out of that hotel at least once a week.”

Absent that steady group base, the hotel would be forced to compete directly with existing downtown properties for corporate travelers and tourists, according to Hanis. According to CoStar, downtown Milwaukee’s hotel occupancy for 2025 was 62%, compared to 70% in 2019. Business travel remains below pre-pandemic levels nationally, and Hanis said some travelers have recently gravitated toward smaller, lifestyle-oriented hotels such as The Trade and the Moxy, which is expected to begin construction this year in Deer District.

“If you don’t have those major conventions in there, that 650-room hotel on a non-convention week is going to compete with all the other hotels in town,” Hanis said. “It’s an interesting matrix.”

“In order for this hotel to be successful — and for the other existing hotels to be more successful — the Baird Center has to generate additional incremental room nights,” he said. “It can’t just reshuffle the deck.”

Nysse also said the study does not fully address seasonality, one of Milwaukee’s longstanding convention challenges. The city performs relatively well from spring through early fall, when convention activity overlaps with peak tourism season. Winter months, however, are more difficult to fill.

“I don’t know that this hotel will increase demand in the off months,” Nysse said. “And that’s going to be an issue.”

Timing is another uncertainty. Even if political support and financing fell into place quickly, a project of this scale likely would not open until the early to mid-2030s, Nysse said. By then, the city’s hotel market would need to have fully recovered to pre-pandemic occupancy levels, which have plateaued in many markets.

The WCD has not yet shared its long-term plan for the study’s recommendation, but has formed a special committee to conduct a more comprehensive review of the study before the board’s May meeting. That committee is scheduled to meet for the first time on Feb. 20.