Lodging Properties: High Expectations for Summer, Mixed Report for Winter
Release Date: Mar 21, 2013
Minnesota’s lodging industry continues to strengthen, including moderate occupancy and revenue growth this winter according to recent reports from Smith Travel Research, Inc. Furthermore, results from a mid-winter Explore Minnesota Tourism (EMT) survey of lodging properties revealed a rosy outlook for the 2013 spring and summer seasons, with positive expectations for occupancy and revenue outnumbering negative expectations by a margin of four to one. However, the same survey provided mixed results on winter business levels for the 2012-13 winter compared with the previous winter. Results showed winter occupancy to be down, but revenue to be up slightly overall among respondents. Nearly three quarters (73%) of respondents rated their business’ current financial health as positive, including 21% “growing” and 52% “stable, but positive.” The survey was conducted in late January 2013, so respondents were only able to reflect on a portion of the winter season as they responded. The mid-season timing of the survey was an intentional effort to get an early idea of winter business levels; however, it is likely that some responses would have changed if the survey had been postponed until after the end of the season, especially given Minnesota’s generally snowier conditions as the winter progressed.
Among other results, a variety of types of snow-related and other types of guests are important to winter business at Minnesota lodging properties, with four of six categories of guests receiving average ratings between 3.5 and 3.9 on a scale where 5 is extremely important. Respondents were split nearly in half on the question of whether or not snow and/or lake ice conditions this winter impacted their business, but the majority of those who were impacted (31% overall) were impacted negatively. Overall, a sizable majority of respondents depend to some degree on good snow and/or lake ice conditions for recreational use by guests. Some responses to open-ended questions reflected continued concerns about economic and job insecurity among customers, while others noted benefits from the slow but continuing economic recovery. Responses noted poor snow conditions for both the 2011-12 winter season and the 2012-13 winter season up through the end of January when the survey was conducted, but colder winter temperatures through January 2013 compared with the previous winter. The full report and summary statistics can be viewed online.