Two sets of graphs are provided to illustrate changes in lodging performance through the 3rd quarter of 2009. In the first set of graphs, 2009 versus 2008 year-to-date change is shown for Minnesota, Minnesota areas, the U.S. and the 7-state West North Central region. Minnesota tracks more closely with the U.S. than with the 7-state region on nearly every measure (i.e., year over year changes in occupancy, supply, demand, revenue, room rates and revenue per available room – RevPAR). Lodging in the Minneapolis-St Paul MSA (i.e., "metro region"), including all areas within it, has suffered more than the rest of the state over this time period. The Minnesota South Area is the only greater Minnesota area with decreases in both occupancy (-12.5%) and demand (-8.8%) that are at levels similar to those found in the metro region (-12.3% occupancy change and -7.4% demand change) through the 3rd quarter. However, unlike the metro region, the Minnesota South Area has not experienced a substantial decrease in room rates, and in fact has a 1.1% room rate increase compared with a decline of 11.1% for the metro region. The three graphs on the right illustrate a clear metro/greater MN divide on lodging financial performance measures.

The Minneapolis area had, by far, the biggest increase in room supply (8.8%) through the 3rd quarter of 2009, followed by the Minnesota South Area (4.2%) and Rochester (3.8%). Along with Minneapolis, Bloomington went through a similar lodging expansion in 2008. However, unlike Bloomington, the Minneapolis expansion continued into 2009. Even though other areas within the metro region suffered similar revenue decreases through the 3rd quarter of 2009, the Minneapolis room supply increase is reflected in the greatest decreases in average room rate (-14.6%) and RevPAR (-27.3%) of any area. These Minneapolis decreases compare with a statewide room rate decrease of 7.3% and RevPAR decrease of 16.4%. It is important to keep in mind that all of these measures are impacted by the RNC during the 2008 time period being compared against. The impact is most notable when looking at monthly changes for September, discussed below, and is minimized when looking at the full 9-month period.

The second set of graphs illustrates changes in statewide lodging performance on a month-by-month basis through September 2009. Here, we gain the perspective of change over time but lose the perspective of different geographic areas of the state. Monthly occupancy and demand decreases were similar from January through July, before moderating somewhat in August and September. On the other hand, downward pressure has led to a gradual decrease in room rates over the 9-month period. August and (especially) September rate decreases reflect the impact of the RNC on higher prices during these months in 2008. We’re getting far enough into the economic downturn that year-over-year comparisons are starting to reflect lower bases from a year ago.

A quick rundown of Minnesota year-to-date (through 3rd quarter) measures for 2009 compared to year-to-date measures for 2008 helps illustrate what a difference a year can make. The 2009 numbers can be found on the "Minnesota" lines of the first set of attached graphs:

Year-to-date (YTD) MN occupancy change: -9.8% for 2009 (compared to 2008) versus -2.5% for 2008 (compared to 2007)

YTD MN supply change: +2.7% for 2009 versus +2.2% for 2008
YTD MN demand change: -7.4% for 2009 versus -0.4% for 2008
YTD MN revenue change: -14.2% for 2009 versus +4.5% for 2008
YTD MN room rate change: -7.3% for 2009 versus +4.9% for 2008
YTD MN RevPAR change: -16.4% for 2009 versus +2.2% for 2008

Click on the accompanying graphs of Minnesota lodging performance to enlarge them.

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