Survey: Minnesota tourism sees higher revenue this summer, but challenges remain

A recent Minnesota tourism and hospitality industry survey found businesses saw increased revenue this summer compared to last year, but still face ongoing hardships, according to Explore Minnesota.

The tourism and hospitality industry was one of the hardest hit during the COVID-19 pandemic amid shutdowns and other restrictions. Tourism Economics reported that the pandemic-related travel downturn has cost Minnesota $10 billion in travel spending losses since January 2020.

However, as restrictions loosened following the rollout of the vaccine in 2021, the industry saw a boost this summer. According to a release from Explore Minnesota, from May to August, three quarters of survey respondents reported higher business revenue, but some fared better than others, and customer traffic was mixed. The survey -- conducted by partnership by Explore Minnesota, Hospitality Minnesota and the Federal Reserve Bank of Minneapolis -- went out to restaurants, attractions, and lodging businesses throughout the state.

Results showed that 71% of businesses reported higher summer revenue versus 2020, and 45% reported higher summer revenue than in 2019. Additionally, 63% of businesses in the food and drink sector reported higher revenue in summer 2021 compared to 2020, and 42% reported higher revenue versus summer 2019.

The survey also found that regionally, southern Minnesota and Twin Cities metro businesses reported the lowest customer traffic.

Overnight lodging accommodations across all Minnesota regions reported somewhat or significantly higher revenue compared to last summer. Revenue was higher for 92% of businesses in the northwest; 90% higher in central; 89% higher in northeast; 81% higher in Twin Cities metro; and 64% higher in southern Minnesota.

As of August 2021, 34% of businesses have met or surpassed pre-pandemic business levels, and another 41% of businesses expect to be at that level by 2022.

Meanwhile, 81% of respondents reported tight labor availability, which has been felt nationwide. According to the U.S. Bureau of Labor Statistics, the U.S. leisure and hospitality industry is the hardest hit sector, still down 1.7 million jobs (10.3%) since Feb. 2020.

However, many businesses are cautiously optimistic that recovery will continue this fall. Sixty percent of businesses expect higher revenue and customer demand this fall versus 2020.