In February, the 138-room hotel at 176 W. Wisconsin Ave. quietly began reopening in phases; as of last week, all of its rooms are available for booking, said Tiffany Avgoulas, the hotel’s new general manager.

The hotel shut down in May 2023 and was later acquired by its lender in a deed in lieu of foreclosure action. Then, in October, the property was purchased for $6 million by an affiliate of Lisle, Illinois-based E.M.A. Hospitality, the hotel’s new operator.

Over the past few months, all rooms have gotten a “full refresh,” including a deep cleaning and polishing as well as new TVs, linens and mattresses. New carpeting was recently installed in the hotel’s lobby area, said Avgoulas.

In addition, E.M.A. Hospitality hired an entirely new team for the hotel, now fully staffed at 24 employees. Avgoulas was brought on in December as director of fails — a position that oversees a property’s turnaround and reopening — and was promoted to GM just a couple weeks ago. She said the hiring effort has presented its challenges, but “we’re getting there slowly but surely.”

Capturing demand

With summer’s peak season right around the corner, the Hampton Inn is well-positioned to benefit from the influx of visitors expected from numerous large-scale events in coming months, including the 2024 Republican National Convention, which has the entire property booked during its July 15-18 run. Outside of that, the hotel is sold out from roughly mid-June through August, said Avgoulas. 

“We have such a prime location, it’s great that we’re able to be this successful this early on (in the reopening),” she said.

Prior to its closure last year, the Hampton Inn’s sixth-floor ballroom was a popular spot for weddings and other events; it was previously operated by Clai Green, who owns two other event venues in the city. Currently, the space remains closed but the plan is to remodel and reopen it for event rentals sometime in the future, said Avgoulas, although the timeline is yet to be determined. 

“We’re just focusing on our guests and the rooms and getting all of that fully squared away,” she added.

Troubling trend

The Hampton Inn & Suites is one of a few hotels in the city that have experienced financial difficulties in the past year — a sign of the lingering impact of the COVID-19 pandemic and following interest rate hikes on the hospitality industry.

Most recently, the Milwaukee Marriott Downtown at 625 N. Milwaukee St. filed for Chapter 11 bankruptcy protection in order to restructure debt obligations.

In September, the 102-room Iron Horse Hotel in Walker’s Point was sent to auction to resolve its Chapter 11 bankruptcy. In December, the hotel reached a deal with its lender to resolve its Chapter 11 bankruptcy and foreclosure.

In July, a foreclosure lawsuit was filed by Atlanta-based hospitality lender Access Point Financial LLC against the owner of the Cambria Hotel in downtown Milwaukee, an affiliate of Chicago-based Murphy Development Group. A $17.5 million foreclosure judgement was entered in November. In January, the hotel was acquired by its lender in a transaction valued at $11.1 million.

Hotel industry analysts like Greg Hanis have warned of this trend for months.

The Federal Reserve’s moves to raise interest rates to combat inflation have put pressure on hotel operators. Before the pandemic, many hoteliers signed five- to seven-year commercial loans with interest rates closer to 3%; those rates have risen to 8% or even 10%, Hanis told BizTimes last year.

“When you start adding on five, six, seven points of interest to a $10 million loan, it is a big hit,” Hanis said in August.

And even though summer 2024 is expected to bring visitors and tourism spending in numbers unlike anything this city has seen before, there could be more hotel foreclosures on the horizon.

“There are hotels right now that are operating, they’re doing fine, but they have this cloud in the background,” Hanis added.