Downtown Milwaukee hotels felt the continued effects of COVID-19 in July, during what is normally the busiest month of the year for the market.
Hotels were lightly occupied and operators made little money on the rooms they had open for bookings versus the same period of 2019. That's according to industry data provided by Hendersonville, Tennessee-based STR Inc.
The STR data showed that occupancy for each week in July ranged from 33.5% to 36.9%. Occupancy showed continued improvement over June's numbers
. But, they were still down on an annual basis by greater than 50%, reaching as high as a 63.6% decline in the week ending July 25.
Milwaukee occupancy rates also lagged behind national averages for the month, said Greg Hanis, president of New Berlin-based Hospitality Marketers International Inc.
He noted occupancy of downtown hotels averaged 35.1% in July, which was 28.2% lower than the national occupancy rate of 48.9%.
"It's a slow recovery," Hanis said. "(Occupancy) is up from June, but it's still significantly down from where it was in comparison to the national numbers."
July offered a similar story for downtown hotels' revenue per available room, another key industry metric. Revenue per available room started at $34.69 for the week ending July 4, and mostly increased each week to finish the month at $37.90. This was an improvement from June, but still way down (by 69.7% up to 80.7%) each week versus 2019 and below the national average of $48.96 for the entire month.
Average daily room rates, meanwhile, compared well to national averages. The rate each week ranged from $99.60 up to $108.23, which were close to or slightly better than the average daily rate observed nationally for July of about $100, Hanis noted. They were down from the previous year between 27.4% and 47%.
Hanis said July is historically the "highest occupancy month of the year" for the downtown Milwaukee market, but it especially suffered from the cancellation of major events such as Summerfest, Milwaukee Brewers games and conventions like the Northwestern Mutual Life Insurance Co. annual meeting
. He said many hotels in the downtown market tailor to that type of business.
"All of those hotels are designed for conventions, and there are just no conventions being held," he said.
Hanis said he expects the market to endure a rough August, due in no small part to the massively scaled-down
Democratic National Convention.
Leisure travel has been the primary source of hotel demand in recent months, both in Milwaukee and nationally, Hanis said. That type of travel usually shrinks in the fall months of September through November, which means the market will have to begin relying more on corporate and group travel, he said.