Minnesota Tourism 2014 Pre-Summer Survey Provides Positive Summer Outlook
Release Date: Jun 03, 2014
Minnesota Tourism 2014 Pre-Summer Survey Provides Positive Summer Outlook
- Overview: A recent Explore Minnesota Tourism (EMT) survey revealed that Minnesota lodging and camping properties have generally positive expectations for the upcoming 2014 summer season. Sizable portions of respondents expect both occupancy and revenue to be up this summer, compared with last summer. The late arrival of spring for a second consecutive year posed challenges for resort and campground business levels, but did not keep other Minnesota lodging properties from maintaining the level of business they achieved during spring 2013. Comments in survey responses were generally optimistic, especially regarding steadily improving economic conditions. However, some respondents noted lingering concerns about economic conditions, including jobs and wages of their customers, or pointed to hardships inflicted by back-to-back sub-par spring seasons and increasing operational costs. Results build on overall positive results from similar surveys conducted over the past few years.
- Expectations for Summer 2014 (June through August): Survey responses pointed toward higher expectations for summer 2014 occupancy and revenue, when compared with summer 2013. Positive expectations outnumbered negative expectations by nearly 3-to-1 for occupancy, and by nearly 3.5-to-1 for revenue. (Note: For this and other questions about year-over-year changes, only the direction and not the degree of change was ascertained.
A weighted average 38% of respondents expected upcoming summer occupancy to be up, 48% expected it to be the same, and 13% expected it to be down from last summer. This outlook is slightly more positive than the 2013 summer outlook provided by results from a similar pre-summer survey a year ago. Occupancy expectations for summer 2014 were similar across Minnesota’s three northern tourism regions (i.e., Northeast, Central and Northwest), but were more positive for the Southern region and especially for the Minneapolis-St. Paul (i.e., Metro) area.
Expectations for summer 2014 revenue were even more positive than occupancy expectations. A weighted average 46% of respondents expected upcoming summer revenue to be up, 40% expected it to be the same, and 14% expected it to be down from last summer. These revenue expectations likely reflect price increases noted by some respondents in open-ended comments. Respondents are allowing themselves to charge customers more as they feel more confident that improved economic conditions support doing so.
In addition to citing better economic conditions, respondents also attributed their positive business expectations to increased advertising and promotional efforts, improved websites, positive online reviews, and word of mouth from previous guests. More respondents attributed higher summer expectations to more weddings compared to other years. And, as was the case last year, numerous respondents are booking summer travel that is making up for outdoor recreational opportunities lost to the cold spring weather. Despite the pervasive optimism, comments made it clear that not all businesses are thriving, including some who noted that customers continue to struggle personally with jobs and finances despite improvement in the overall economy.
- Spring 2014 Business Levels: Overall, respondents reported lower occupancy in spring (i.e., April and May) 2014 compared with the same months of 2013, but similar levels of revenue for spring of both years. A weighted average 26% of respondents reported that spring 2014 occupancy was up, 37% reported it to be the same, and 37% reported it to be down from a year earlier. For spring revenue, 31% of respondents reported that it was up, 39% reported it to be the same, and 30% reported it to be down from spring 2013 levels. Again, room rate increases were likely reflected in the more positive spring revenue results, as compared with spring occupancy results.
Resorts were much more likely to experience occupancy and revenue declines this spring than were any other type of accommodation. That said, campgrounds joined resorts as the only other accommodation type for which more respondents reported occupancy and revenue declines this spring than reported occupancy and revenue increases. By contrast, among responding hotel/motels and B&B/historic inns, whose business is much less weather-dependent, the number that reported spring occupancy to be up was equal to the number reporting spring occupancy to be down this spring. Respondents from the Metro region reported substantially better spring business levels than respondents from all other regions, followed by respondents from the Southern region as the only other region where more respondents reported spring occupancy and revenue increases this spring than reported occupancy and revenue decreases.
Recent Minnesota reports from Smith Travel Research, Inc. (STR) align with overall results for spring business levels on the EMT pre-summer survey. STR results show a decline in Minnesota’s lodging occupancy rate for the month of April (i.e., the most recent month reported), but room revenue as flat compared with April 2013. Despite the downturn in April, all six of Minnesota’s lodging performance metrics maintained positive year-to-date growth through the end of April, reflecting stronger lodging performance through the first quarter of the year.
The late arrival of spring had a negative impact on business for nearly half (49%) of respondents. This was similar to, but not as negative as, the 61% of respondents a year ago who reported a negative business impact from the late arrival of spring in 2013. A relatively small portion (9%) of respondents reported a positive impact and 44% said the late spring did not impact their spring business. Some resort respondents cited problems related to late ice out, especially as it impacted the walleye fishing opener, but this survey did not elicit as many “ice out” comments as did the pre-summer 2013 survey. A few respondents voiced concerns about longtime visitors getting out of the habit of taking spring Minnesota vacations in the wake of back-to-back cold and snowy spring seasons, perhaps substituting getaways to warm weather destinations instead.
- Financial Health: Even more positive than a year ago, nearly 80% of survey respondents were positive about the financial health of their business. A weighted average 24.5% of respondents rated their business as “growing” and 54.8% rated it as “stable, but positive.” On the negative side, 13% of respondents rated their business as “stable but negative” and 4% rated it as “declining.” Three percent of respondents said they didn’t know. Over 70% of respondents in each region and accommodation type rated their current business health as positive (i.e., either “growing” or “stable but positive”), with the highest positive levels represented by respondents from the Metro region.
- General Comments: Recurring themes from other recent surveys emerged in respondents’ comments, including increased incidence of shorter stays, last-minute bookings and customers looking for deals. Customer expectations for amenities are continually increasing, including for comfort and technology in a wilderness setting. Numerous respondents noted continued high levels of repeat customers, and an increased emphasis on cultivating positive word of mouth and online recognition. Others noted challenges associated with customers who are apt to visit a new place each year, sometimes combined with a willingness to go and stay where a better deal can be found. More positive than negative comments reflected on the new look and feel of Explore Minnesota’s recently redesigned website.
- Survey Invitation Lists, and Response Rates: Explore Minnesota Tourism (EMT) conducted an informal, unscientific online survey in May 2014, soliciting responses by email from 1,763 accommodations (indoor lodging properties and campgrounds) throughout Minnesota that have provided EMT with an email address. A total of 245 responses were received for a 14% response rate. Ninety-eight percent of the respondents (240) completed the entire survey. Results reported here reflect self-reported data from all survey respondents.
- Responses by Accommodation Type: The distribution of survey responses by type of property over-represented resorts (42% of total responses, 35% of total distribution) and B&B/historic inns (18% of responses, 8% of distribution), and under-represented hotel/motels (24% of responses, 38% of distribution) and campgrounds (8% of responses, 14% of distribution). Eight percent of respondents checked "other, including vacation home rental" as their accommodation type. Vacation home rentals were among 5% of the total survey distribution list that was not represented by a specific accommodation category on the survey.
- Rebalancing by Accommodation Type: Results for most survey questions were rebalanced to minimize the distortion caused by substantial overrepresented or underrepresentation of respondents in some accommodation types. Weighted average results reflect Minnesota’s distribution of properties by accommodation type (found above under “responses by accommodation type”).
- Responses by Region: The distribution of survey responses across Minnesota’s five tourism regions overrepresented the Northeast region (29% of responses, 23% of total distribution) and the Central region (26% of responses, 23% of distribution). By contrast, survey responses underrepresented the Southern region (14% of responses, 19% of distribution) and the Minneapolis-St. Paul (13% of responses, 16% of distribution) and Southern regions (14% of responses, 19% of distribution). Representation of survey responses was approximately equal to the actual regional distribution of properties for the Northwest region (18% of responses, 19% of distribution).
Summary statistics for the survey can be viewed online at Results for Survey Questions.