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Some resort owners say high gas prices are good for business

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Eddy's Resort on Lake Mille Lacs
Northern Minnesota resort owners say that the rise in fuel prices has not impacted their business, and some predict it will help their business.
Tim Post

Pain at the pump isn't a new term for the people involved in Northeast Minnesota tourism.  It's easy to forget, but high gas prices were a big concern each of the last two summers.   

And so far, escalating gas prices have done little to slow the flood of traffic that pours north out of the Twin Cities every Friday afternoon from May to September.  

Some of those cars end parked beside motels or lakes near Iron Range communities like Biwabik, Tower and Ely.  Cheyenne Denny is with the Iron Range Convention and Visitors Bureau.

"Typically our visitors come from the Twin Cities area, and the trend has been with the rising gas prices that people are traveling closer to home, so they're not traveling out of state," Denny said. "They're starting to look in-state for tourist destinations.  So, it really hasn't affected us in the past, and I really don't think it'll affect us with the upcoming busy tourist season."

Denny thinks the Iron Range has attractive advantages over other parts of the state.

"For example, our all terrain vehicle park.  That is quite busy because of the fact that there are less and less places to ride," she said.

Like the Iron Range, Duluth banks primarily on visitors from the Twin Cities. Gene Shaw, with Visit Duluth, said the extra money shelled out for a trip to Duluth from the Twin Cities doesn't amount to that much.

"You're looking at a cost increase from a trip from Minneapolis up here to maybe be in the neighborhood of $10 to $30.  We don't believe that will be enough of an impact to stop anybody," Shaw said.

Shaw said Duluth can make up for any tourism drop-off with new events, such as an air show and a summer visit by three tall ships. Regardless of gas prices, Shaw said, people want to travel.

"People still are going to go someplace and do something.  They have to get away," Shaw explained.

And, he said, it won't hurt that those government checks will arrive just before the tourist season.  For some some families that could be more than $2,000.

High gas prices could be a good thing for northern Minnesota resorts, according to Lee Kerfoot who runs the Gunflint Lodge, a historic and somewhat high-end resort on the upper reach of the Gunflint Trail.  

Kerfoot said his Twin Cities customers might dump an expensive flight somewhere out-of-state for time spent in the wilderness closer to home.

"And so people are going to say 'you know what?  These airline tickets are $400 or $500 apiece, and there's four of us.  There's no way.  And, we're going to drive up north and we're going go to a a resort, and we're going to save money doing it actually.  It's going to be a lot cheaper'," said Kerfoot.

Kerfoot said the people who stay in resorts already pay a premium for the room and board, nice meals and amenities.  The price of gasoline isn't that big a part of the total package.  

"They watch their money very carefully, but they're not quite as price-sensitive as, say, someone who goes on camping vacations, where they bring their car and they camp out of their car.  They're quite a bit more price sensitive.  And then, fortunately the people who come up and rent cabins, and especially our cabins, they tend to be a little bit better insulated against gas prices," explained Kerfoot.

As long as people are willing to drive north from the Twin Cities, the region's tourism industry should be ok. 

But it's possible there is price per gallon that would bring travel to a halt - maybe five, six, or ten dollars a gallon.  But, so far , according to the people who cater to visitors, that cut-off price hasn't been hit.