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 Demand for More then the 8,000 Hotel Rooms Now Available in the Madison, Wisconsin Area
By Barry Adams, The Wisconsin State JournalMcClatchy-Tribune Business News

Mar. 25, 2007 - The salt-water fish tank needed to be filled late last week at the Holiday Inn Hotel at the American Center, but officials say they will open on schedule Friday and provide another option for the growing hotel market in Dane County.

"We'll be open," said Steph Sabo, vice president of sales and marketing for the 139-room, five-story hotel designed to cater to corporate travelers. "It's amazing how things come together in the last week."

The Far East Side hotel, owned by veteran hotel builders John and Ann Stauffacher, is one of at least three hotels that will open in Dane County this year.

Plus, more are planned and others are being conceptualized, primarily on the east and west sides of the metro area. Some are hoping for another Downtown hotel.

Badgers football games, a growing technology industry, a world-class university, the hub of state government and a healthy local economy are helping to create the demand for more than just the 8,000 rooms now available throughout the greater Madison area.

More demand next year

And next year the demand for rooms will grow even more in addition to the thousands who attend state high school athletic competitions in February and March or attend World Dairy Expo in October.

In June of 2008, more than 8,300 competitors will take part in the AAU Taekwondo National Championships at the Alliant Center. In October of 2008, 6,000 people will converge at Monona Terrace for the Wisconsin State Music Association conference. "There's always a continued need for rooms," said Tom Farley, marketing director for the Greater Madison Convention & Visitors Bureau. "You've got a greater mix now in the community for all those types of different travelers."

The county's largest hotel, the 356-room Madison Concourse Hotel, 1 W. Dayton St., is located Downtown.

The $31.2 million, 13-floor, 236-room Hilton adjacent to Monona Terrace opened in 2001.

Last month, Marcus Hotels and Resorts of Milwaukee, which owns the Madison Hilton, said it would form a joint venture with Waterton Tactical Real Estate Fund I of Chicago to buy and renovate the 237-room Sheraton Madison Hotel at 706 John Nolen Drive. The multimillion-dollar project, scheduled for completion late this year, will likely include improvements to the exterior and "significant" upgrades to the lobby, public space and to all guest rooms.

Another hotel Downtown?

One possibility being discussed is converting the state Department of Administration building at 101 W. Wilson St. into a hotel. The 10-story building, which is home to 600 employees and overlooks Lake Monona, is being sold by the state.

"Right now, we use a combination of hotels, so one more hotel Downtown would really put us in an area where we can compete with some bigger cities," Farley said. "It's the hotel space that makes it."

Room tax revenue in Madison has increased every year since it was enacted in 1970. The only exception was in 2001, when the aftermath of the terrorists attacks impacted travel worldwide.

In January of this year, the room tax rate was increased from 8 to 9 percent, a move expected to generate an additional $900,000. About half of the new revenue will go towards increased marketing efforts to attract tourists, said Dean Brasser, the city's comptroller.

Middleton, Far West Side

In Middleton, room tax revenue has more than doubled since 1997 and is projected to surpass $775,000 this year. Over the last five years, hotel openings have included a Residence Inn, Hilton Garden Inn and Staybridge Suites. In July, a 135-room Courtyard by Marriott will open.

"It's nice for Middleton, but the people who stay here are spending money all over the county and that speaks well for business growth," said Van Nutt, executive director of the Middleton Chamber of Commerce. "As long as everyone's happy with their occupancy rate, I think we could see a few more."

On Madison's Far West Side, two hotels are planned near the Princeton Club, which overlooks the Beltline at High Point Road. Raymond Management Co. of Madison, which is also developing the Middleton Courtyard, has received city approval for a four-story, 119-room Homewood Suites and a four-story, 132-room Hampton Inn. Both would be built in the 400 block of Commerce Drive and are joint ventures with The North Central Group, which, after the Courtyard opens, will operate eight hotels totaling more than 1,000 rooms in Dane County.

"I think there's been a pent-up demand for hotel rooms on the West Side of Madison for some time," said Bob King, Raymond's corporate director of sales and marketing. "We're very bullish on Madison."

King's company is also looking at Downtown and the suburbs for hotel opportunities.

Verona, Fitchburg

"If the right opportunity came along, we would have a look at it," King said. "We're encouraged by what we see in Verona. We would like to be in Verona."

That city, southwest of Madison, is home to Epic Systems, a medical software company that, when completed, will be home to more than 2,500 employees. The company is building a training center adjacent to an auditorium capable of holding 5,000 people, many of whom will be forced to find lodging outside of Verona.

In Fitchburg, where technology firms are on the rise and the 284-acre Green Tech Village is under development on the city's east side, an 80-room Candlewood Suites -- an extended stay-style hotel -- will open this summer and become the city's third major hotel, joining a Quality Inn & Suites at Hatchery Hill and the Country Inn & Suites on Nesbitt Road.

Since enacting a room tax in 2001, room tax revenues in Fitchburg have grown from $57,344 to $164,801 in 2006.

"There has been some preliminary interest for some future possible hotel sites," said Michael Zimmerman, the city's economic development coordinator. "The bread and butter of our hotels is the business traveler."

Holiday Inn

Corporate customers are the targets for the Holiday Inn at the American Center. The development on the north side of Interstate 39-90-94 and west of Highway 151 is home to American Family Insurance, Alliant Energy and is just a 10-minute drive from the Dane County Regional Airport.

The $16 million project includes a "retro design with a contemporary flare," alarm clocks with MP3 docking stations and a fifth-floor executive level.

The hotel, one of the Holiday Inn chain's first "Next Generation" facilities and the 28th built by the Stauffachers, also has a 24-hour business center, 3,000 square feet of meeting space and a restaurant and bar with flat-screen televisions in each booth. The hotel is also just south of a large retail and commercial development planned on Sun Prairie's west side.

"We wanted to be at the center of where business is growing," Sabo said. "We're so fortunate to have so many amazing companies."

Farley is among those who would like to see another hotel built Downtown so attendees would not have to commute to hotels in other parts of the area. Another hotel would help attract more and larger conventions to the Alliant Center and Monona Terrace.


Copyright (c) 2007, The Wisconsin State Journal

Distributed by McClatchy-Tribune Business News. For reprints, email, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. NYSE:MAR, NYSE:LNT,

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