Hotels in the downtown Milwaukee area finished the summer months with a whimper as the COVID-19 pandemic took away a massive chunk of business during what is normally the market's busiest season.
Industry data provided by Hendersonville, Tennessee-based
STR Inc. shows hotel room occupancy for the downtown market started off at 36.7% the week of Aug. 2. This was basically in line with the summertime high of 36.9%
reached in July. Occupancy generally went downhill from there, ending at 31.8% the week of Aug. 23.
The average daily rate for hotel rooms started the month at $108.93, ticked upward but then finished the month at a low of $104.77. Revenue per available room, another industry indicator, ranged between $33 and $40 for all but one week of the month.
As has been the story the last several months, the downtown Milwaukee hotel market has lagged behind national averages for these industry metrics. Greg Hanis, president of New Berlin-based
Hospitality Marketers International Inc., said the national average for occupancy to start the month was nearly 50%, and decreased slightly to finish the month at 48.2%.
The gulf between the downtown Milwaukee hotel market and national occupancy rates grew over the course of August. Milwaukee was behind nationally by 26.5% for the first full week, and behind 34% the last full week, Hanis said.
"(The data) is basically showing me that Milwaukee hotels in August did not improve very much compared to national numbers," he said. "In fact, they actually got worse over the course of the month."
The downtown Milwaukee hotel market generally performed better in the category of revenue per available room. It was up 8% from the national average in the first week of August, and up 6.5% the last full week. Revenue per available room started the month 20.7% back from the national average, and finished behind by 29.6%.
The market's otherwise downward slide saw a slight bump the week of Aug. 16, when the Democratic National Convention took place. Occupancy for the week was 35.1%, while the average daily rate was $166.89 and revenue per available room was $58.60.
Even so, this was hardly the expectation for the DNC by the hotel industry at the beginning of the year. Once anticipated to bring 50,000 visitors and generate $200 million in economic impact, the DNC ended up being a shell of what it was supposed to be due to the pandemic. Most convention activities took place remotely, and Democratic presidential candidate Joe Biden didn't even visit the city to accept his formal nomination.
Hanis said downtown Milwaukee hotels suffered from a lack of major events this summer, such as Brewers games and festivals like Summerfest. Those events draw in more leisure travelers. Heading into the fall season, the market typically looks less to leisure and more to business travelers for demand, he said.
"Fall is traditionally the last chance for the hotels to make something out of 2020," Hanis said, "and I just don’t see it happening."
