50% of Minnesota tourism businesses experienced summer slump

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MINNEAPOLIS — New numbers show tourism slumped this summer in Minnesota.

In a survey by the Federal Reserve, Hospitality Minnesota and Explore Minnesota Tourism, half of the 266 respondents from the hospitality and tourism industry said that business was slower than in 2023.

"We did see an overall decline in occupancy," said Aliah Vanchelli, the general manager of Appeldoorn's Sunset Bay Resort on Lake Mille Lacs.

The summer told a different story at Sugar Lake Lodge near Grand Rapids.

"Honestly it was incredible," said owner Abby Oxborough. "One of the better summers we've had."

Oxborough says family reunions are what boosted her business. That's a segment of customers that Vanchelli says she's also focusing on.

"Everybody's kind of being a little bit tighter in how much they're spending and what they're spending on, and I think that quality time is the push [to get them here]," Oxborough said.

Businesses in the survey cited the high cost of living as one of the reasons why customers stayed away this summer.

Inflation has slowed down considerably, but 60% of the respondents said their own expenses going up was also a top challenge.

"We've seen the uptick in charges for food, transportation, alcohol," Vanchelli said.

Oxborough says Sugar Lake's wages are at an all-time high.

It was also a rainy summer, which didn't help.

Despite all this, the survey found two-thirds of businesses were either optimistic or neutral about the outlook over the next six months.

"There's always that [question] with an election and what the economy's going to look like, are people going to want to vacation?" Oxborough said. "We don't know."

Vanchelli says Appeldoorn's has added new amenities and thinks business is going to be excellent next year.