Watertown Mayor Emily McFarland told common council members Tuesday another hotel could be coming to the city.

“The news was good,” she said of a hotel feasibility study. “We have a need for a hotel. We are actively talking to a hotel developer so we hope this study will further conversations.”

There was no discussion on the study by common council members.

McFarland said the study was posted on the city website for developers to have access to it.

Patek Hospitality Consultants Inc. of Sussex completed the study for Watertown on the potential market demand and the estimated annual operating results for a proposed 61-room, limited-service hotel affiliated with a major hotel brand.

The study, which was conducted in September 2020, was released Tuesday. It reported a new hotel could open in January 2023 and feature a multi-function lobby, king- and double-queen guest rooms, and an indoor pool, fitness room, and a small meeting space.

There are currently five lodging properties in Watertown. There is the 79-room Holiday Inn Express, the 45-room Super 8, the 38-room Heritage Inn Hotel and two bed and breakfasts: the Jesse Stone House and Katherine Holle House. There are six hotels with 568 rooms located in Watertown, Johnson Creek, Fort Atkinson and Oconomowoc.

Patek Hospitality Consultants, Inc. used statistics from Smith Travel Research, which tracks room supply and demand characteristics in markets across the country. STR also maintains an up-to-date inventory of all hotels and receives actual operating statistics from a large sample in each market.

The study reported the Holiday Inn Express was purchased in October 2019 together with the Comfort Suites and Days Inn properties in Johnson Creek. Minkin Management, a property management company based in West Milwaukee, manages the three properties.The Holiday Inn Express will be undergoing a renovation to enlarge the breakfast area, which will result in the loss of some meeting space square footage. In January 2021, the Holiday Inn Express will be converted to a Best Western as the franchise license was not renewed by IHG, the parent company of Holiday Inn Express.

Patek Hospitality Consultants Inc. said while compiling the study it found the Days Inn in Johnson Creek was closed for renovation. Due to the pandemic, it is unclear when the renovations to these two properties will happen, but the conversion to Best Western will take place, according to the study.

“Our opinion is that a new hotel in Watertown would directly compete with the Holiday Inn Express/Best Western but would not compete with the Super 8 or the Heritage Inn due to their market orientation toward the price conscious traveler, lower rate structure, and economy facilities/amenities offered,” the study reported.

The STR reported the six competitive hotels showed occupancy of 60.2%, ADR (average daily rate) of $108.20, and RevPAR (revenue per available room) of $65.10 for the year-end 2019. Year-to-date through August 2020, the occupancy was 36.7%, ADR was $95.51, and revenue per available room was $35.02.

The study recommends the proposed hotel be developed either downtown (if the size of the site and parking can be configured) or along the Church Street (Business Highway 26) commercial corridor, preferably with frontage on Church Street.

Based on the rate structures at the competitive facilities and their locations, quality levels, chain affiliations, services and facilities offered in comparison to the proposed hotel, Patek Hospitality Consultants Inc. estimated the proposed limited-service hotel will be able to achieve an average room rate of $95 in 2020 dollars.

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