It's a sunny forecast for Minnesota's tourism industry
Gas prices are more than a dollar per gallon higher than they were at this time last year. But people in northern Minnesota who rely on tourism for their living don't seem too worried about it.
Resorts and other businesses are gearing up for this Memorial Day weekend, the traditional start of the summer tourist season, with more energy this year. After several slow seasons, there are signs the tourism industry is making a comeback.
The increased activity can be seen at places like Two Inlets Resort, which sits on the edge of tranquil Two Inlets Lake, about 17 miles north of Park Rapids.
"We're pretty much ready to go for the season," owner Bob Bateman said.
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Bateman said the resort, which has been in his wife's family since the 1970s, has 1,000 feet of lakeshore and 13 cabins. He said business was down about five percent during the recession, but this year, he anticipates a 5 percent increase in revenue over 2010.
Bateman still has a few vacancies this summer, but he expects to fill them as people make last-minute vacation plans.
"This season looks really good," he said. "Last season was down, as was the season before, but the forecast looks good."
Tourism in Minnesota showed signs of recovery even before the start of the season. Lodging revenue in the state last month was up nearly 12 percent over the same period last year, according to a report from Smith Travel Research, Inc., a proprietary lodging industry research firm.
That's slightly higher than the national average. Minnesota lodging is still not back to pre-recession performance levels, but if the recovery continues at its current pace, state tourism officials say it should be close to 2008 levels by the end of the year.
Higher prices at the gas pump might be a factor for some people making vacation plans this season. But Bateman isn't worried that will hurt his business. Most of his guests made their reservations months ago, and more than half of them come from places nearby, like Fargo or the Twin Cities.
"The vacation is the last thing that people give up, has been my experience," he said. "Times have to be pretty tough for them to give that up."
State tourism officials say the summer forecast calls for a second year of continued moderate growth in tourism following recession lows in 2009. But gas prices may still be the wildcard, especially for restaurants and retailers who rely on discretionary spending.
In downtown Park Rapids, where six new businesses have opened since last year, there are only a couple of vacant storefronts. Cynthia Jones, who owns a specialty gift shop, said she doesn't expect higher gas prices to significantly affect business.
Jones, chairman of the downtown business association, figures people in Minnesota will vacation in tourist towns like Park Rapids rather than travel to other states.
Park Rapids businesses made big changes during the recession, like focusing on customer service, lowering prices and offering a range of products to satisfy every budget.
Many downtown businesses are better positioned than they were before the recession, Jones said.
"We've also really worked a lot harder in the last few years because of the economy to niche market, to not compete against each other, but as a town," she said.
Jones said area businesses hope customers will see Park Rapids as a destination to shop.
They have reason to be optimistic.
Katie Magozzi, director of the Chamber of Commerce in Park Rapids, said more Canadians are visiting Minnesota because of the strong Canadian dollar. She said the recreational vehicle market has also bounced back after taking a big hit during the recession.
Magozzi said she thinks that, after several years of bad economic times, there's a lot of pent up demand for affordable vacations.
"Right now I think people have pretty much had it with the belt tightening," she said. "Indications are that it's going to be a very strong season, and certainly every visitor dollar that's spent goes around at least five times in our communities, so we know that that will have a positive impact."
It hasn't all been good news for tourism. The sale of fishing licenses is down 15 percent from this time last year. State Department of Natural Resources officials say the drop is mostly likely due to cool, wet weather patterns this spring.
