Minnesota Tourism 2013 Summer Business Survey Reveals Continued Moderate Growth
Release Date: Sep 10, 2013
Minnesota Tourism 2013 Summer Business Survey Reveals Continued Moderate Growth
- Overview: Results from a recent Explore Minnesota Tourism (EMT) survey of Minnesota lodging and camping properties showed Minnesota accommodations with their fourth consecutive summer of modest growth and recovery. Overall, the informal survey indicated that summer 2013 business levels were up compared to a year earlier for both occupancy and revenue. However, results varied by accommodation type. Hotels, motels, B&Bs and historic inns did overall quite well, but resorts and campgrounds, which focus on outdoor activities, were negatively impacted by a cold and wet start to summer. Each of the past few summers has shown an increase over the previous summer in the portion of properties reporting positive financial health. Respondents are generally positive about the upcoming fall season. Open-ended responses noted a more upbeat attitude among customers, with less concern about the economy and job losses. Many recession-associated trends persist, but respondents noted that guests seem less constrained with their spending.
- Summer 2013 (June through August) Occupancy and Revenue: Overall, survey results indicated higher occupancy rates for summer 2013 compared to summer 2012. (Note: For this and other survey questions about year over year changes, only the direction but not the degree of change was ascertained.) A weighted average 40% of respondents reported that summer 2013 occupancy was up, 28% reported that it was the same and 32% reported that it was down from 2012 levels. (Note: Percentages may not total 100% due to rounding. Also, see the “rebalancing by accommodation type” section below for an explanation of weighted averages.) Occupancy results varied by accommodation type. Hotel/motels and B&B/historic inns fared quite well, with overall positive occupancy results (i.e., more respondents reported that occupancy was up than reported that occupancy was down). On the other hand, resorts and campgrounds got a slow start to the season, attributable in large part to the late arrival of summer in Minnesota. Fortunately, more favorable July and August weather allowed many weather-sensitive businesses to finish the summer stronger. Many resorts (36%) reported that summer occupancy was up for the summer, but an equal portion (35%) reported that occupancy was down and 28% reported that it was the same as in 2012. Only 15% of campgrounds reported that occupancy was up. B&B/historic inns had the largest portion of respondents reporting occupancy to be up (59%). Occupancy results for hotel/motels were 48% up, 20% same and 31% down.
On a regional basis, the Metro region had the largest portion of respondents reporting occupancy to be up for summer 2013 (53%). Among Minnesota’s other four tourism regions, Southern and Northeast reported overall positive occupancy results, with 46% and 44%, respectively, reporting that occupancy was up. The Central and Northwest regions had similar portions of respondents reporting that occupancy was up as reporting that occupancy was down.
Overall, a weighted average 49% of respondents reported that summer 2013 revenue was up, while 20% reported that revenue was the same and 31% reported that it was down compared with summer 2012. Revenue results were generally more positive than occupancy, reflecting a continuing trend of increases in rates supported by gradually increasing demand for lodging. Revenue results for the two biggest accommodation groups were: hotel/motels 61% up, 11% same, 28% down; and resorts 39% up, 24% same and 37% down. Campgrounds and the Northwest region were the only accommodation type and region, respectively, that did not have overall positive revenue results.
Well over half of respondents (55%, weighted average) reported that the late arrival of summer this year impacted their summer business in a negative way, while only 7% reported a positive impact and 39% reported no impact. Campgrounds (86%) and resorts (61%) had the highest incidence of negative impacts. On a regional basis, the Metro region was the exception as the only region with less than half (19%) of respondents reporting a negative impact from the late arrival of summer. Comments cited early summer cancellations due to cool, wet weather, along with a general lack of interest in summer travel until after the weather improved in July and August. Respondents cited negative impacts related to fishing, camping and golfing.
- Expectations for Fall (September and October 2013): Respondents expect fall 2013 business to be somewhat better than fall 2012 levels. Weighted average expectations for fall 2013 occupancy compared with fall 2012 occupancy were as follows: up 26%; same 53%; and down 21%. Relative to their responses about summer 2013 occupancy levels, responses about fall 2013 occupancy expectations shifted toward the middle (i.e., toward “same”), with more “same” responses for fall 2013 occupancy expectations (53%) than for summer 2013 occupancy results (28%). Weighted average expectations results for fall 2013 revenue compared with fall 2012 revenue were as follows: up 31%; same 46%; and down 23%. Expectations for fall 2013 revenue saw the same shift toward the middle (i.e., toward “same”) that was seen from summer 2013 occupancy results to fall 2013 occupancy expectations. Resorts and the Central region were the only accommodation type and region, respectively, that did not have overall positive results for expectations for both fall occupancy and fall revenue.
- Financial Health: More than four out of five (82%, weighted average) respondents rated their business’ current financial health as positive, similar to 80% a year ago, and up from 74% in 2011 and 69% in 2010. The 82% positive responses included 23% “growing” and 59% “stable, but positive.” One in six (17%) respondents rated their financial health as negative, including 8% “stable, but negative” and 9% “declining.” One percent responded that they don’t know. At least 73% of respondents from each accommodation type and tourism region rated their financial health as positive.
- Trends, and Other Comments: Other open-ended questions asked about new and recurring trends in customer comments, and things that impacted summer business or are likely to impact fall business, or anything else. Negative impacts from the late arrival of summer got a lot of attention here. Otherwise, unlike other post-recession surveys, numerous responses reflected a more upbeat attitude among customers, with less concern about the economy and losing jobs. Customers are not as restrained in spending on travel. Themes of short stays and last-minute travel appeared among comments. However, along with comments about a continuing trend of customers looking for deals, numerous respondents noted that they were not asked about deals, discounts or their best rate as often this summer. A number of respondents noted that more guests are expecting Internet access and other amenities, and a generally higher level of service from their accommodations. Some commented that they have finally been able to raise rates and increase revenue after years of discounts.
- Survey Invitation Lists, and Response Rates: Explore Minnesota Tourism (EMT) conducted an informal online survey in late August 2013, soliciting responses by e-mail from 1,697 accommodations (indoor lodging properties and campgrounds) throughout Minnesota that have provided EMT with an e-mail address. Of this number, 1,692 of the e-mails were successfully delivered. A total of 234 responses were received for a 14% response rate. All respondents qualified to take the survey based on their response that they were open during the summer 2013 season (question 2). Of the 234 respondents, 224 (95.7%) progressed through the entire online questionnaire. Results reported here reflect self-reported data from all respondents.
- Responses by Accommodation Type: The distribution of survey responses by type of accommodation over-represented resorts (46% of total responses, compared with 35% of Minnesota’s distribution of accommodations) and B&B/historic inns (12% of responses, 8% of distribution), and under-represented hotel/motels (24% of responses, 38% of distribution) and campgrounds (12% of responses, 14% of distribution). Six percent of respondents checked "other" accommodation type, compared with 5% of the total distribution represented by other lodging categories that include vacation home rentals and vacation property management companies.
- Rebalancing by Accommodation Type: Results for most survey questions were rebalanced to minimize the distortion caused by substantial over- or under-representation 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: Two of Minnesota’s five tourism regions were over-represented by survey respondents – Northeast, with 31% of responses compared with 23% of Minnesota’s total distribution of accommodations); and Central, with 30% of responses and 23% of distribution. Three regions were under-represented – the Minneapolis-Saint Paul Area (i.e., Metro), with 7% of responses compared with 16% of distribution; Northwest, with 17% of responses and 20% of distribution; and Southern, with 16% of responses and 19% of distribution.
- Summary statistics for the survey can be viewed online at Results for Survey Questions.