Minnesota Hospitality Businesses Face Revenue Challenges This Summer

MINNEAPOLIS (WJON News) -- A majority of Minnesota's hospitality businesses are wary about the summer tourism season.

Hospitality Minnesota and the Federal Reserve Bank of Minneapolis have released the results of a recent survey. They received 119 responses from across the state in May.

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Over half reported lower revenue and profits compared to last spring.

A central Minnesota resort owner wrote,

"Consumers seem to be holding their discretionary spending close to their chests in light of inflationary pressures and alarming concerns about the future."

Half of the businesses expected their profits to be lower than last summer, and only about 15 percent expected growth. Nearly 60 percent reported that their wholesale prices increased five percent or more since the same time last year. Only a third increased their retail prices by the same amount. Some businesses pointed to tariffs as the driver behind the wholesale price increase.

Another significant challenge was Minnesota's new paid leave policy that was implemented in January. Over 60 percent of respondents said their administrative time and operating costs had increased as a result. Roughly 40 percent saw employee absences increase.

A resort owner in northeast Minnesota wrote,

"Between the price of gas and the cold shoulder Canadians are giving us, I'm not optimistic on this season's potential."

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