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Analyst says Milwaukee could be adding too many hotel rooms

Posted at 10:46 PM, Aug 09, 2018
and last updated 2018-08-10 08:30:40-04

More hotel rooms are coming to Downtown Milwaukee and one expert says there might be too many soon.

TODAY'S TMJ4 partner The Milwaukee Business Journal reported Thursday that hotels with a combined 300 rooms will be built near Johnson Controls on East Michigan and North Jefferson. Those rooms will be added to the hundreds of others already on the way. 

"Business travel during the week, leisure during the weekends and that’s enough to keep them confident enough to keep them building," said Business Journal reporter Sean Ryan.

The Journal estimates 464 hotel rooms opened in the last six months, and nearly 1,000 more are on the way. 

Milwaukee is still in the running for the 2020 Democratic National Convention. Hotel availability will be on the checklist of organizers when they visit Milwaukee during the selection process, but the DNC isn't likely a driver of development right now says Market Analyst Greg Hanis of Hospitality Markets International.

"You don’t build a church for Easter Sunday, you don’t build a hotel for just one major event," he said. "If it’s just for the DNC there's got to be other demand that’s going to be coming into the market to absorb all of these hotel rooms."

In fact, even at the current rate of building Hanis believes a saturation point could be near.

"Simple math says the hotels are going to struggle to try to find the demand to fill their rooms," says Hanis.

When too many rooms are available Hanis says hotels will likely compete in rate wars, in turn driving down revenue. He says the only winner there is the consumer with lower prices.  

Members of the Democratic National Committee are expected to visit Milwaukee sometime in August. A selection announcement is likely to happen before the end of 2018. Miami Beach and Houston are in the running for the DNC as well.