Hotels See Signs of Economic Recovery

The hotel industry nationwide has been battered by the recession, and Brookfield’s 13 hotels are no exceptions.

Hotels large and small have struggled to fill rooms, but local business leaders say signs of a turnaround are abundant.

In 2010, Brookfield's revenue per available room, the industry’s key economic measure — rose 9 percent. The average daily rate fell 2.2 percent in 2010, but considering it was down a whopping 12 percent in 2009, local hoteliers are relatively pleased.

Only one month in 2010 saw Brookfield hotel revenue drop year over year — February, which fell 42 percent — while August through October saw double-digit gains each month.

“Many of the hotels are very optimistic about 2011 and extremely optimistic about 2012,” said Nancy Justman, executive director of the Brookfield Convention and Visitors Bureau. “For Brookfield, most people are looking at small gains in occupancy and are hoping to bring the average daily rate up to 2008 and 2007 figures.”

Brookfield residents are impacted by the hotels' success or failure, because the inns pay room taxes based on their sales. 

The city saw its room tax revenue drop from $2.6 million in 2008 to less than $2 million in 2009. Last year it rose to nearly $2.1 million. 

The city hotels also pay about $1.6 million in property taxes annually, based on their property values, said Robert Scott, city finance director. That's about 5% of the property taxes collected from all Brookfield businesses.

"They're important," Scott said. 

Attracting more visitors

The convention bureau is making a concerted effort to draw more overnight visitors to Brookfield, which is of critical importance to local hoteliers. For the past two years, the supply of rooms in the Milwaukee market has badly outstripped demand.

In any given month, there are at least 100,000 more guestrooms available in the area than there are overnight guests, according to data from Smith Travel Research.

The city and town of Brookfield have a combined 13 hotels and 2,106 rooms. Business travelers comprise the bulk of hotel guests during the week, while weekend guests are primarily regional tourists and families drawn to local events like sports tournaments.

The CVB is bidding on sports events to relocate to the area for just that reason, Justman said. Two such events debuted last year — the Town of Brookfield hosted the inaugural Gus Macker 3 On 3 Basketball Tournament in July and will host it again this year; and the International Cycling Classic will pass through Brookfield in July for the second straight year. The CVB is eying several other soccer and baseball events.

The major players

One of the heavyweights in the Brookfield hotel market is the 203-room Brookfield Suites Hotel & Convention Center, the former Embassy Suites property that went independent in 2006. Matt Drusch, director of sales and marketing for the hotel, said that being the area’s only major unbranded property is a mixed blessing.

Unlike its nationally branded competitors — the 386-room Sheraton Milwaukee Brookfield Hotel chief among them — Brookfield Suites is free of corporate standards “that restrict the ability to think independently based on the market in which the hotel resides,” Drusch said. Specifically, the hotel plans to invest heavily in local and regional advertising, tailoring its message to focus on its individuality.

On the other hand, that advantage can seem like a curse during a downturn, like the one that has plagued the hotel industry at large since late 2008. Besides name recognition, major brands can drive consumers to hotels through loyalty programs that reward frequent guests with free or discounted nights — something independents like Brookfield Suites cannot offer.

“Everybody is price-driven to a certain extent,” Drusch said. “But we still do see our fair share of clients who just want a really nice hotel.”

Just across Moorland Road is the 104-room Residence Inn by Marriott Milwaukee-Brookfield, an upscale extended-stay property that has dramatically bucked the downturn.

The Residence Inn, which relies heavily on business travelers staying for weeks at a time, had one of its most profitable years ever in 2010, said general manager Mark Ostendorf. Between May and November, the hotel ran a staggering 94-percent occupancy average.

The Marriott affiliation has no doubt helped, Ostendorf said, but he added that the commitment of owners the Wimmer Brothers to reinvest in the property is paying off. The Residence Inn this week is debuting a new fiber-optics system that makes it one of the first hotels in the area to offer a full slate of high-definition TV channels.

“We want to be on the cutting edge. Fiber optics in the hotel industry will be the norm in two or three years, so we just moved that up a bit,” Ostendorf said.

Pricing wars are precarious

Ostendorf and Drusch agreed that lowering room rates was a losing proposition in the long run, because as past recessions have proven, bringing rates back up once the economy is back on track is easier said than done.

“With the competition’s mindset to reduce rates to increase occupancy, the ability to increase average daily rate will be hard-fought and will most likely see marginal growth estimating at 3 percent from 2010,” Drusch said.

Price wars are bad news for hoteliers, but they most definitely are good news for consumers, and Brookfield residents thinking about an early Valentine’s Day staycation this weekend have some decently priced local hotel options.

DoubleTree Hotel Milwaukee/Brookfield, at 18155 W. Bluemound Rd., has rooms available Saturday night for just $69. Rooms at the Sheraton, 375 S. Moorland Rd., are going for $84, while a night at Residence Inn, 950 S. Pinehurst Ct., is $89. Brookfield Suites, 1200 S. Moorland Rd., will cost $95 for a one-night stay.