For Immediate Release
State of Minnesota
Minnesota Tourism and Hospitality Industry Survey Confirms Significant Hospitality Business Losses Statewide
Late 2020 Results Confirm Significant Hospitality Business Losses Statewide
ST. PAUL, Minn. (Jan. 14, 2021) – According to a recent Minnesota tourism and hospitality industry survey addressing late 2020 business impact, nearly two thirds of all respondents reported business to be significantly lower compared to 2019. More than three quarters of respondents noted overall negative financial health and stressed the urgent need for conditions to improve.
The survey, conducted in partnership by Explore Minnesota, Hospitality Minnesota and the Federal Reserve Bank of Minneapolis, yielded a total of 681 responses from a cross-section of tourism and hospitality businesses across the state, including food and drink, attraction and entertainment and lodging (motels, resorts, B&Bs, campgrounds and vacation home rentals). The survey was conducted Dec. 8-15, addressing business impact between Sept. and early December.
Many Minnesota tourism and hospitality businesses stated that it's imperative for conditions to improve, with nearly one third of respondents signaling that they can remain solvent under current conditions for no more than 3 months and another quarter anticipating only 4-6 months of solvency.
"The pandemic has hit our industry harder than any other. This survey reaffirms the struggles we've been hearing from Minnesota tourism and hospitality businesses across the state," said John Edman, Explore Minnesota tourism director. "With business travel, conventions and events canceled, along with bar and restaurant limitations, the decline in revenue will be difficult to replace."
It's no surprise that food and drink establishments were hit the hardest, with 93% of related business reporting negative financial health, including 66% declining. Geographically, the Twin Cities metro area and southern Minnesota regions reported the worst business levels, followed by central Minnesota, then northeast and northwest Minnesota which reported similar levels. On a hopeful note, six in ten respondents have already met pre-pandemic levels or expect business to return to pre-pandemic levels before the end of 2021.
In comparison to dismal fall business levels, respondents' expectations for winter business activity were even lower.
"This continues to be a devastating time for the hospitality industry that provides one-in-ten jobs in Minnesota. It will be a very long recovery for many businesses so it's critical we do everything we can to support them or Minnesota's way of life will shift dramatically," said Liz Rammer, Hospitality Minnesota president and CEO.
According to Tourism Economics, the pandemic-related travel downturn has cost Minnesota more than $7 billion in travel spending losses mid-March through Dec.
"This survey is further evidence that the economy is not out of the woods yet, particularly for sectors like hospitality and tourism that depend on events, crowds, and consumer foot traffic," said Ron Wirtz, Minneapolis Fed regional outreach director. "The start of COVID vaccinations is great news, but full rollout will take time, and many businesses are really struggling to get to the other side of this pandemic."
Complete Minnesota tourism and hospitality industry survey results can be viewed at mn.gov/tourism-industry/research/reports.
About Explore Minnesota
As the state's tourism promotion office, Explore Minnesota works to inspire consumers and facilitate travel to and within Minnesota while pursuing an entrepreneurial approach and leveraging the state's tourism investment with increased involvement by the private sector. A council of tourism industry representatives connects Explore Minnesota with tourism businesses and organizations throughout the state. Tourism is a key sector of the state's economy, historically generating $1.0 billion in state sales tax on $16.0 billion in leisure and hospitality sales and employing nearly 273,000 workers in Minnesota's leisure and hospitality businesses.
Visit exploreminnesota.com, and share your sights with @exploreminn on Twitter, or @exploreminnesota on Instagram and Facebook, using #OnlyinMN.
About Federal Reserve Bank of Minneapolis
The Federal Reserve Bank of Minneapolis is one of 12 regional Reserve Banks that, with the Board of Governors in Washington, D.C., make up the Federal Reserve System, the nation's central bank. The Federal Reserve Bank of Minneapolis is responsible for the Ninth Federal Reserve District, which includes Montana, North and South Dakota, Minnesota, northwestern Wisconsin, and the Upper Peninsula of Michigan. The Federal Reserve Bank of Minneapolis participates in setting national monetary policy, supervises numerous banking organizations, and provides a variety of payments services to financial institutions and the U.S. government.
About Hospitality Minnesota
Hospitality Minnesota is the voice for hospitality in Minnesota, serving more than 2,000 hospitality businesses across the state and advocating for the interests of business owners and their employees and providing opportunities for education and training to strengthen and rebuild the hospitality industry in Minnesota. On April 1, 2020, the lodging, restaurant/foodservice, resort and campground associations merged to become Hospitality Minnesota.