The month of May showed improvement for hotels in Milwaukee’s central business district, though there is still a long way to go to reach normal levels of business, according to industry data.
The data, provided by Hendersonville, Tennessee-based STR Inc., shows that hotel occupancy for the downtown Milwaukee hotels slowly increased over the course of the month.
For the first full week of the month, May 3-9, occupancy was 13.5%. That number increased each week to reach 18.1% for the week of May 24-30, according to the STR data. This is an increase of nearly 34.1%.
The average daily rate for hotel rooms in the market stood at $73.34 the first week of May, and climbed 8.4% by the end of the month to $79.47. Revenue per available room, another measurement of hotel performance, improved 45.2% over the month from $9.93 to $14.42.
Greg Hanis, hotel industry analyst and president of New Berlin-based Hospitality Marketers International Inc., said the data shows a clear, but slow improvement.
“It’s going in the right direction, it’s just not going there very fast,” he said.
But the numbers are still far below what they were in 2019. According to STR, the downtown Milwaukee hotel occupancy rate at the beginning of May was down 82.9% versus the same period last year. Occupancy in the final week was down 74% from the year prior.
Moreover, the downtown market lags behind the national average by these measures. Hanis said occupancy at the beginning of the month was 17.5% nationally, and more than doubled by the end of the month to 36.6%.
“It puts into perspective as to how Milwaukee is rebounding versus the country,” he said.
Hanis said Milwaukee-area hotels will suffer this summer, normally the busiest time of year, due to cancellations of major events such as Summerfest and the State Fair, or greatly scaled back events including the Democratic National Convention.
“So the strong months we typically look at — June, July and August — in Milwaukee, are just not going to have the typical demand generators,” he said.
Hospitality has been hit especially hard due to the COVID-19 coronavirus pandemic. But demand could pick up in that time by way of “social travelers,” those staying in hotels for leisure activity and not business, Hanis said.
He said the industry expects branded hotels and more affordable hotels will be the primary beneficiaries of these returning guests. The assumption is that guests will trust large brands such as Holiday Inn and Hilton for sanitation procedures, Hanis said.
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