Survey shows Minnesota’s tourism industry still adjusting to post-pandemic changes

The COVID-19 pandemic likely isn’t at the forefront of many people’s minds these days but the impacts from it are still being felt in a wide variety of ways.

A new survey from Explore Minnesota, Hospitality Minnesota and the Federal Reserve Bank of Minneapolis shows the state’s tourism and hospitality industry is among those still adjusting to the changes in the post-pandemic world.

The results of the survey, released Thursday, show that while the majority of tourism and hospitality businesses in Minnesota say they’re financially stable or growing, the returns have been uneven and there are still plenty of challenges and concerns moving forward.

For example, the businesses reported that industry challenges this summer have been less severe than last year. Yet, the 69% of businesses that said they’re growing or in a stable, positive financial position is the lowest percentage in the survey since the spring of 2021, when the pandemic was still a major issue.

And while more than half of the bars and restaurants (52%) and entertainment businesses (51%) reported higher summer 2023 revenue than last summer, allied and other businesses along with hotels reported mostly flat revenue this summer compared to summer 2022.

Some of the comments recorded in the survey show that consumer changes since the pandemic waned are still causing businesses to adjust, although many have already altered their approaches to attracting and retaining customers and staff.

One company reported “significant declines in delivery and carryout business especially in the Mpls and StP” while also noting increases in on-site dining, which makes sense with a lack of restrictions and improved confidence from consumers that they don’t have to risk getting sick. But another restaurant reported that people “don’t stay as long” and they focus more on finding good deals than spending more.

Another business agreed that “Buyers are more price sensitive this year” but said they’re “still willing to spend money on experiences.” That was somewhat echoed by another business that wrote its consumers are more focused on activities and events than typical marketing approaches.

And at least one company reported staffing issues, something that has plagued many businesses throughout the year. The survey noted that three-quarters of hospitality and tourism businesses in the state have raised their wages in an effort to attract or retain workers while nearly half have increased scheduled flexibility, by far the two highest actions taken. Other popular attempts have included bonuses and perks, lower experience requirements and improved hiring processes.

Adding everything up, businesses were pretty split in their outlook for the rest of the year, with about a third of respondents pessimistic, another third neutral and a little more than a third remaining optimistic.

“We are remaining optimistic about the stability of our leisure and hospitality industry in Minnesota,” said Lauren Bennett McGinty, Executive Director of Explore Minnesota. “While we are seeing a direct impact from inflation and other external factors, we are also hearing growing interest in travel around the state and country. We are hopeful that it will point to more of these businesses return to prepandemic levels in the coming year.”

To see the full report, click here.