Competition Will Heat Up for Downtown Hotels

Last updated on May 13th, 2019 at 02:37 pm

Is downtown Milwaukee on the verge of a hotel building boom? At least 10 projects are in various stages of development that would bring new hotels to or near downtown. However, many in the hotel industry are skeptical that the downtown market could support so many additional hotels, and many doubt all of the proposed hotels will be built. "(Downtown Milwaukee) is not going to support all of them," said Greg Hanis, president of Pewaukee-based Hospitality Marketers International Inc. "In reality, the downtown market can probably support two to five additional hotels over a period of five years. Of course, it depends on their size, their location and how they are marketed. If they all come on line at the same time, there’s no way the market can support them all."


The occupancy rates for major downtown hotels is approaching 70 percent, Hanis said, and the downtown as a whole is being revitalized by condominium developments and the addition of Manpower’s corporate headquarters. That revitalization has apparently sparked the attention of hotel developers. "Downtown Milwaukee is doing very well right now," Hanis said. "It’s probably doing the best it has in a long time, as far as occupancy and rates are concerned. Downtown is really an exciting place to be right now." According to Hendersonville, Tenn.-based Smith Travel Research, the occupancy rate for all of downtown Milwaukee’s hotels was at 61.2 percent last year.

The proposed new downtown hotel developments are:

— Phil Hugh, a Fort Myers, Fla.-based developer, plans to build a $20 million, nine-story building with 120 extended-stay hotel rooms, 18 residential condominiums and 10,000 square feet of first-floor retail space at the southeast corner of Juneau Avenue and Water Street. The hotel would be just north of Bar Louie, which will open soon in the former Brew City Barbeque building at 1114 N. Water St.

— Chicago-based RSC & Associates plans to build a 140-room hotel and a 125-room hotel between Broadway, Ogden Avenue, Lyon Street and Jefferson Street in the Park East corridor.

— Weas Development Co. plans to develop a 150-room Renaissance ClubSport by Marriott hotel at the southeast corner of Broadway and St. Paul Avenue in the Historic Third Ward.

— Charlotte-based Ghazi Co. has proposed a 32-story building, which would include a hotel, for a city-owned lot at Fourth Street and Wisconsin Avenue.

— Two developers have proposed developments for a Milwaukee County-owned property between Third and Fourth streets and Juneau and McKinley avenues next to the Sydney Hih property in the Park East corridor. Both proposals would include a hotel. Mequon-based Ruvin Development Inc. wants to include a 20-story building with a 175-room luxury hotel in its proposed development. Milwaukee-based Rana Enterprises has proposed a three-phase development that would include an 18-story, 200-room luxury hotel in the final phase. The Milwaukee County Board will select which of the developers will be able to buy the site.

— U.S. Bank and JBK Properties want to include a 214-room hotel in the 42-story building they plan to construct just southeast of the U.S. Bank building at 777 E. Wisconsin Ave. However, that project is on hold until the developers can land an anchor office tenant.

— Badger Pacific Equity Partners is seriously considering plans to develop an upscale boutique hotel in a building the group purchased recently at 625 N. Milwaukee St., said Craig Stoehr, co-founder and managing partner of the group. The hotel would have about 80 rooms. The hotel would have a large bar and restaurant on the first floor. "We’re talking with one of the top Chicago restaurant and bar operators about coming up to Milwaukee," Stoehr said. "So far there has been a lot of interest."

— On the city’s East Side, New Vision Development Co. LLC and Land Acquisitions & Investment LLC plan to build a 14-story building with a 76-room boutique hotel, 90,000 square feet of commercial space and 15 condominiums, on two parking lots south of Thomas Avenue and between Farwell and Murray avenues. This would be the only hotel on the city’s east side and would target visitors to the University of Wisconsin-Milwaukee and Columbia St. Mary’s hospital.

— Dixon Development plans to build a 100-room, Harley-Davidson themed boutique hotel in a former Coakley Bros. Inc. warehouse at 500 W. Florida St. in the Fifth Ward. That hotel would be targeted toward visitors to the Harley-Davidson museum, which is under construction in the Menomonee River Valley.

Managers for hotels that are already operating in downtown Milwaukee are preparing for the increased competition. Several downtown hotels are making improvements to stay competitive. Many downtown hotel managers doubt all of the proposed hotels will be built, saying the market cannot fill that many additional rooms. "I can’t imagine that all of them will be built," said Denise Bjerke, general manager of Hotel Metro, 411 E. Mason St.


"I think the city could support one more hotel," said Herb Rackliff, general manager of the Hyatt Regency, 333 W. Kilbourn Ave. "I think the only way the city could support (several new downtown hotels) would be to expand the convention center."

A larger convention center would be able to attract more and larger conventions, which would help fill more downtown hotel rooms, Rackliff said. However, a convention center expansion would require a tax increase, probably for rental cars, hotel rooms or for food and beverage sales at bars and restaurants. "I think one or two, at best, will be built," Rackliff said.

"We clearly like what’s happening in Milwaukee," said John Rutledge, chairman and chief executive officer of Chicago-based Oxford Capital Group LLC. His firm is putting the finishing touches on its conversion of the Howard Johnson Inn & Suites at 176 W. Wisconsin Ave. into a Hampton Inn. "We do not believe downtown Milwaukee justifies much, if any, ground-up hotel construction. My guess is a majority of them will not be built."


Downtown Milwaukee’s hotels are busy during the summer, but struggle from September through April, Bjerke said.

"I can count the number of nights on one hand when we have actually filled all of our 64 rooms," she said. "During the summer, the business is great, but it’s not like every hotel in the city is full." "You don’t build a church for Easter Sunday," Rutledge said. "Some of these upper Midwest markets, including Milwaukee, are highly seasonal." One hotel general manager, who would not speak on the record, said there is not enough demand to support new downtown hotels without hurting existing hotels.


However, others think downtown can support more hotels. "It seems like the area (hotel rooms) are sold out a lot," said Noonie Aguilar, assistant general manager of the Courtyard by Marriott, 300 W. Michigan St. "I definitely think (downtown Milwaukee) could use more hotel rooms." Doug Neilson, president and chief executive officer of Visit Milwaukee, said downtown can support all of the proposed new hotels. The city is becoming more attractive to visitors, and the addition of the new Discovery World museum later this year and the Harley-Davidson museum in 2008 will attract even more visitors to fill up downtown hotels, he said.


"You’re talking about the evolution of Milwaukee as a destination," he said. "(Downtown Milwaukee) is going to be a different place in two years." Additional hotel rooms could help the Midwest Airlines Center attract more conventions. Citing a lack of hotel rooms near the convention center, organizers of the Gen Con gaming convention decided to move the event from Milwaukee to Indianapolis in 2003. Stoehr said his market analysis indicates that downtown Milwaukee can support either an additional upscale hotel similar to the Pfister or Hotel Metro, or a limited service hotel similar to Residence Inn by Marriott.


"We only have two upscale hotels in Milwaukee," he said. "We think there’s room for more." To succeed in downtown Milwaukee, hotels must have an aggressive marketing plan and they must differentiate themselves from the competition with high-quality food and beverage operations or a unique design, Stoehr said. "You can’t just open up and expect demand to fill your rooms," he said.


Several existing hotels in the downtown area are making improvements:

— The Park East Hotel at 916 E. State St. changed its name recently to Comfort Inn and Suites Downtown Lakeshore to take advantage of the Comfort Inn’s national reservation system. The hotel also recently completed an interior remodeling project that added new carpet in the rooms, hallways and the lobby, new furniture in the rooms, new wallpaper in the hallways and lobby and a new tile countertop for the front desk.

— Hotel Metro, 411 E. Mason St., recently added a 1,200-square-foot addition which added a rooftop relaxation spa, a multi-purpose room and an outdoor garden with a reflecting pool. The amenities added in the project include a fitness center, a saltwater hot tub, a sauna, a massage room, a multi-purpose room and an outdoor sun deck.

— Oxford Capital spent about $7 million to convert the Howard Johnson Inn & Suites at 176 W. Wisconsin Ave. into a Hampton Inn. The project added a swimming pool and included a new lobby area, new guest rooms and a facelift for the building’s exterior. "We are dramatically upgrading an existing property," Rutledge said.

— Courtyard by Marriott recently completed a $1.6 million renovation, adding new mattresses and bedding, new carpeting and wallpaper and rebuilt the lobby, public spaces and meetings rooms, Aguilar said.

— The Hyatt Regency is in the middle of a four-phase renovation project that has already replaced the beds in the guest rooms and renovated the hotel ballroom. All of the guest bathrooms will be renovated by this fall and later the hotel will renovate other meeting rooms, Rackliff said.

— Marcus Hotels is planning improvements at the Pfister Hotel, 424 E. Wisconsin Ave., and at Wyndham Milwaukee Center Hotel, 139 E. Kilbourn Ave. "There are a number of exciting changes in process at the Pfister Hotel and Wyndham Milwaukee Center," said Marcus spokeswoman Megan Coulomb. "In addition to room renovations at the Pfister, a brand new upscale restaurant and new spa are currently under construction. A cutting-edge new restaurant, new bar and new nightclub highlight a top-to-bottom renovation at the Wyndham. In addition, all rooms and meeting spaces at the Wyndham will also be updated. Renovations at both hotels are targeted for completion by the end of the year. Full details on all of the enhancements at both Marcus Hotels properties will be released later this summer."

— Just west of downtown, Rick Wiegand, the owner of the Ambassador Hotel, 2308 W. Wisconsin Ave., completed a $12 million renovation of the hotel last year.

"It’s not like there are any real dog properties downtown," Bjerke said. "The weak hotels that are downtown are changing."

Even if the several new hotels are built, lower-priced hotels will continue to survive downtown, because they serve a market niche, Bjerke said. "I think there’s still going to be a need for the lower-rate hotels," she said.


Milwaukee restaurateur "Johnny V" Vassallo recently opened a second Monsoon Wok & Lounge location at 17800 W. Bluemound Road in Brookfield. The first Monsoon is located at 811 N. Jefferson St. on Cathedral Square in downtown Milwaukee. The restaurant features Asian-fusion cusine. Vassallo also plans to open a second location for Mo’s Irish Pub, on the site of a former Ground Round restaurant at the northwest corner of Highway 100 and Bluemound Road in Wauwatosa. The first Mo’s Irish Pub is at 142 W. Wisconsin Ave. in downtown Milwaukee. Vassallo also owns Moceans, Mo’s Cucina and Mocha in downtown Milwaukee and Mo’s A Place for Steaks in downtown Milwaukee and Indianapolis.

Hales Corners

Julie and Jerry Ziemer plan to convert their home at 10265 W. Forest Home Ave. into a bed and breakfast inn. The 1,484-square-foot bungalow-style home was built in 1914. The inn will eventually have four guest rooms. It will be called the Lawson House Bed and Breakfast.

Elkhart Lake

Judy Salzwedel, the owner of Victorian Village Resort, plans to build a two-story, 12,000-square-foot mixed-use building along South Lake Street on green space near the resort. The building would have four retail spaces on the first floor and four residences on the second floor.


Germantown Development LLC, which is affiliated with Helsan Development Co. LLC, recently purchased a vacant, 28,000-square-foot building on Mequon Road, about one mile east of the Highway 41/45 interchange. The building has 2,000 square feet of office space. The rest of the building is warehouse space. Germantown Development plans to renovate the building’s warehouse space into climate controlled storage units.

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