A convention destination needs many things, but the two most important are a large convention center and an adequate amount of hotel rooms, preferably anchored by a big convention headquarters hotel.
Last year construction was completed for a $456 million expansion of Milwaukee’s downtown convention center, the Baird Center. The project doubled the size of the convention center to 1.3 million square feet.
The convention center opened in 1998, and a second phase opened in 2000. A third phase was discussed for many years before it was finally built as officials determined that a larger facility was needed to compete with other cities to attract conventions.
Now with a larger convention center, officials from Visit Milwaukee and the Wisconsin Center District say convention bookings in Milwaukee have been picking up for coming years.
While the convention center has now been expanded, after many years of discussion, there has also long been discussion about the need for a larger convention headquarters hotel in Milwaukee. Downtown Milwaukee has added several hotels in recent years, but they’ve generally had about 150 to 200 rooms, far less than what a convention headquarters hotel is expected to have.
Currently, there are two hotels connected to the Baird Center via skywalk: the 481-room Hyatt Regency and the Hilton Milwaukee.
The Marcus Corp., which owns the Hilton Milwaukee, recently announced plans for a $40 million renovation of the hotel. That’s the good news. The bad news is the 175-room west tower of the hotel, built in 2000, will be shut down, reducing the hotel’s room count from 729 to 554.
Marcus Corp. CEO Greg Marcus says the downtown hotel market isn’t healthy, pointing to several bankruptcies at downtown-area hotels in recent years and revenue per available room (RevPAR) lower than in most peer cities.
Occupancy rates for downtown hotels have improved the past two years but haven’t returned to pre-pandemic levels and RevPAR is only slightly higher than pre-pandemic levels, while costs are now much higher.
With so much invested in expanding the Baird Center, it’s disappointing to see the Hilton shrinking in size. That doesn’t help Milwaukee’s efforts to attract conventions.
Ideally, a new convention hotel – one larger than the Hyatt or the Hilton – would be built just south of the Baird Center, adjacent to the new Vel R. Phillips Plaza. It’s needed to maximize the investment in the convention center.
Such a development would likely need to be subsidized. Other cities have done this, but Milwaukee officials have been reluctant, and competing hotel operators, including Marcus, certainly would be opposed.
The city needs to attract a major convention hotel, but there also needs to be enough demand to support it. It would help if lower-performing hotels were redeveloped for other uses, reducing overall supply and pushing more demand toward downtown’s premier hotels. n
