Outlook Is Good for Summer Tourism
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Minnesota tourism businesses generally have a positive outlook for this summer travel season, based on responses to a phone survey by Explore Minnesota Tourism of a statewide sample of 46 lodging businesses. Occupancy levels are expected to be fairly stable this summer, with two-thirds of respondents expecting occupancy this summer to be the same as last year or higher. Almost half expected some increase in revenues.
Those who expect a downturn in business this summer cited a variety of factors, including shorter stays, high gas prices, the economy in general, and conditions specific to their local area or business such as increased competition.
This reflects recent travel trends both in Minnesota and nationally. The majority of the reporting Minnesota businesses expect Memorial Day weekend occupancy to be similar to last year’s. The Travel Industry Association is forecasting that leisure travel this summer will increase by just over 1% nationally.
Tourism businesses have a mixed outlook on the possible impact of high gas prices this summer: Some think it will cause a slight downturn in business while others don’t expect to see much impact. The high gas prices of the past few years have not led to a reduction in travel in Minnesota or nationwide; overall, consumers have not reduced their gas consumption. However, consumers do modify their travel behavior in response to higher gas prices. They may travel closer to home, stay fewer nights, and spend less in shops and restaurants during their stay. These trends were reported by some Minnesota tourism businesses last summer.
Explore Minnesota Tourism Budget
As part of the Economic Development Budget bill, the Minnesota Legislature has included direct funding of $9.7 million annually for Explore Minnesota Tourism (including $250,000 each year for the Minnesota Film Board). In addition, there is a $500,000 annual incentive fund for Explore Minnesota Tourism, $650,000 annual funding for the Film Board Snowbate Program, $75,000 annual increase in administrative funds for the Film Board and a $150,000 appropriation to the St. Louis County Heritage/Arts Center. Other legislation passed during the session includes modifications in shoreland regulations for Minnesota resorts; a statewide smoking ban; Travel Green Program analysis; and legislation supporting Mall of America Phase II; Many of these bills are awaiting signature by the Governor.
Posted: November 15th, 2007
