Boom of New Hotels in Milwaukee Area as Demand May Not Be Keeping Pace

Aug 31, 2017

Many of us might be thinking of a getaway for the upcoming Labor Day weekend, but for people from elsewhere, Milwaukee is a destination.  And when they get here, they’ll be coming to a place that has seen a dramatic increase in the number of hotels and hotel rooms available.

Reporter Corri Hess covered the story for BizTimes Milwaukee, and she listed off some of the hotels the have recently opened or are in the works: Kimpton Journeyman Hotel in the Third Ward; Westin Milwaukee; Potawatomi Hotel and Casino's planned second tower; and a Hyatt hotel proposed for the Brewery complex.

She says that Brookfield is also expecting four new hotels, while West Milwaukee, State Fair Park, Glendale, Racine and Kenosha are also expecting or contemplating new ones.

But this may be more than southeastern Wisconsin needs. "It's definitely not dire," she explains, "but it's starting to show some signs that we're getting oversaturated. We're at the point where we have too much supply for the demand, or we're getting there."

She says that this has been a change in trend. "All of [our recent] stories had been 'additional rooms have not impacted demand,'" she notes. "Looking at the last six months of data, it's starting to show that it has impacted demand, both in the downtown market and in the western suburbs."

As for prices, she says "room rates are steady and going up. The average daily room rate in Milwaukee has gone up almost five percent in the last six months. In the western suburbs, it's up almost eight percent."

"The analysts say they're not sure how long that [rate escalation] will hold," she says.

She said an industry analyst who she spoke to in her reporting said "we need a moratorium. Take maybe three years, see how the market shakes out, and see how the hotels are doing," she details. "Also [he suggested] to see if the older hotels need to be turned into something else, maybe apartments, or an office."