HELP! I am a little confused!

"We have the loveliest hotel," Mike said. "I think it's a brothel." When I came across this little excerpt I stopped when I read the word "brothel". I gave Hemingway the benefit of the doubt thinking that maybe the word has a duplicitous meaning. However, after looking it up on dictionary.com I came to realize that the only definition for the word was indeed what I thought it was. So, by using explication, I read the context around the mentioning of such a place and came up with nothing. The only think I have to offer is that maybe Mike is drunk and is just being sarcastic when he is comparing his hotel to a brothel? Bret did seem rather offended when he said this and simply dismissed his comment and told him to get his hair cut. So, with that being said, if anyone has any advice to offer, I would love it=].