The fate of the Hilton Minneapolis
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The Hilton Minneapolis. Photo: Raymond Boyd/Getty Images
The Minneapolis tourism industry will be keeping a close eye on what happens to the downtown Hilton hotel as it heads toward a scheduled auction next month.
Why it matters: The Hilton is Minnesota's largest hotel, with 826 rooms. It's the type of hotel that event planners love because guests can eat, sleep and meet in one place. It's also the type of place that brings lots of people to the city and region.
Catch up quick: The hotel's current owners defaulted on their debt during the pandemic.
- After failed modification discussions, a Hennepin County judge ordered a foreclosure auction, which will take place on Jan. 13, per the Minneapolis/St. Paul Business Journal.
What they're saying: Douglas Greene — managing director of Haberhill, one of the two Hilton Minneapolis owners — blamed Minnesota's "unnecessary" pandemic shutdowns for the hotel's financial situation.
- He told Axios that if Minneapolis is concerned about the future of the hotel, officials and industry types should have been louder back in 2020 and 2021.
- "What's going to happen to this hotel is much less certain when a lender takes it back than when somebody in the (hotel) business owns it," he said.
Between the lines: If the hotel goes to auction, there's no telling who will buy it. Plus, Hilton's management contract expires in four years, and hotel brands expect owners to make upgrades.
The intrigue: Who buys the hotel and what they do with it will give us an idea of how much investors believe in the future of downtown Minneapolis.
- The Minneapolis Hilton was a profitable hotel before the pandemic. In 2019 it had a 74% occupancy and operating income of close to $20 million on $61.5 million in revenue, according to loan details provided to Axios by analytics firm Trepp.
- But in 2020, downtown occupancy plummeted. Since then, it's been slowly rebounding, but occupancy rates were only 55% in October 2022, down from 75% in October 2019, per STR.
What we're watching: City council member Michael Rainville told Axios that "as of now, "nobody is concerned we're going to lose the biggest hotel in the state of Minnesota."
- In fact, he said, with hospitality making a comeback, talks are reigniting about building a new large-scale downtown hotel. "Sites are being looked at," he added.