EXPLORE MINNESOTA TOURISM COUNCIL

Tuesday, March 4, 2008
James J. Hill Room
Department of Employment & Economic Development
Saint Paul, MN 55101

Present: Maureen Bausch, Rob Buntz, Bonnie Carlson, Gabe Castenada, Butch Eggen, Randy Gutzmann, Nancy Hanson, Deb Lloyd, Lisa Paxton, Ingrid Schneider, Dave Siegel, Kathy Silverthorn, Representative Dean Simpson, John Valliere

EMT Staff Present: John Edman, Leann Kispert, Peggy Lindquist, Michele Peters, Colleen Tollefson, Char Vaughan

Guests: Doug Killian, Maureen Scallen

Welcome and Introductions: Chair John Edman thanked the Council members and guests for attending. Attendees were asked to introduce themselves and provide an update on the winter season.

• Representative Simpson reports that the session is off to a fast pace. May 19 is the scheduled session end date. Heard bill last week on vacation home rentals. Need to be careful where we go with it. EMT should include additional projects they are taking on (i.e. Travel Green, Vacation Home Rentals) when proposing budgets. EMT will be called to do more projects.
• Bloomington hotels doing well. Figures are two months behind in reporting. Figure Skating competition held in Saint Paul in January was a boost. Economy is a concern. Smith Travel Research is predicting a good summer.
• Brainerd area saw more snow this winter than in the past eight years. Mixed results reported. Had some good events in the area. There is a concern of the perception of the economy. This summer, Brainerd will host an “Oxpedition” - similar to Peanuts characters located around Saint Paul, but Brainerd will have Babe statutes throughout the Brainerd Lakes region.
• The federal government recently announced travel restrictions. State government typically follows.
• Cross country skiing has been excellent this winter.
• Northeastern Minnesota saw great snow. Not a lot of motorized use, but skiing holds its own.
• Positive feedback from Golf Show. In April, an economic study of golf will be released.
• Travel in the North Shore area is up.
• Minnesota business air travel is flat; this is optimistic because most domestic travel is soft.
• Received many positive comments from visitors here for the U.S. Figure Skating Competition - metro area is clean and friendly. Hotel rates and occupancy rates are up. Republican National Convention will be coming this summer. There are a lot of preliminary meetings and site tours, which is also big business.
• Mall of America reports that January was slow, which is typical. February was good. Nickelodeon Universe opens March 15, this is a $30 million investment. Anticipate a lot of national and local media coverage. Prom time is also a big time for MOA. Looking for a good summer with RNC in town. International visitors continue at a strong pace.
• Tour Minnesota Association has seen a 400% increase in members updating their websites.
• Consumers will continue to save their money to spend at local celebrations.
• Red Wing area saw results from events in the Twin Cities over the winter. Treasure Island Casino has added an additional 250 hotel rooms. An air show is scheduled in Red Wing, as well as a hot air balloon rally this summer. Very optimistic for summer in Southern Minnesota.
• Does not feel as though the consumer will give up their vacation time in spite of the economy.
• Hospitality Minnesota reports that lodging is doing ok. Restaurants are being hit hard because of the economy

Minutes from December 4th Meeting: Rob Buntz motioned to approve the minutes as submitted. John Valliere seconded the motion. All council members in attendance voted to approve the minutes as submitted.

New Members: A special thank you to the following members for their service and dedication to the Council: Patricia Beckel, Rob Buntz, Gabe Castaneda, Sandy Lexvold, Tom Masloski and Greg Ortale.

The following new members were just appointed and will be invited to the June meeting:

• Ted Siefert, Goodhue County, representing counties
• Charles Skinner, Lutsen Eagle Ridge Resort, representing lodging
• Sam Thompson, Metro Connections, representing tour operators
• Chuck Dougherty, Water Street Inn, representing bed and breakfasts
• Mark Novotony, Congress of Minnesota Resorts, representing resorts
• Brad Jones, Rochester CVB, representing convention facilities

The following members have been reappointed:

• Fred Bobich, Ruttger’s Sugar Lake Lodge, representing chambers
• Nancy Hanson, MN Recreational Trail Users Assn., representing trails
• Julie Lunning, Saint Cloud CVB, representing MACVB
• Kathy Silverthorn, Red Wing CVB, representing Southern MN
• John Valliere, Explore Minnesota Golf Alliance, representing golf

Seasons of Fun - Leann Kispert: When the Council met in September, they suggested that EMT create some type of big promotion/partnership giveaway to drive leads, online and industry traffic, as well as continue awareness. The Seasons of Fun promotion is a result of that direction. This is the largest promotion EMT has undertaken.

There are three promotional periods:

• April 7 - June: Summer of Fun
• August & September: Autumn of Fun
• January & February 2009: Winter of Fun

There are weekly giveaways including destination and attraction prizes, as well as a Grand Prize of a two-year car lease for each season.

Partners include:

• Luther Auto Group
• Dairy Queen
• Arctic Cat
• Erik’s Bikes & Board
• Golf Galaxy

Partners provide approximately $800-900,000 in promotional and media value and prize support.

Television ads will begin to run after March 23 They are 30-second spots rotated with EMT branded campaign. Video banner ads will utilize 30-second television ads. A direct mail will be sent in early April. An E-mail blast will go in mid-April. Dairy Queen will tag their 30-second radio spots, as well as tray liners promoting campaign.

Additional marketing promotion:

Participated in a small promotion with KQRS radio in January. This promotion drove an additional 40,000 visitors to the web.

Legislative Update: EMT received a base budget increase last legislative session. This year, state budget proposal includes $1billion in state cuts. EMT has not yet been asked to submit budget cuts, but it is anticipated. There is a statewide hiring freeze; EMT submitted appeal to fill vacant positions through transfers. Minnesota Film Board requested legislation for $500,000 in carry forward money returned to them. There is a bill on vacation home rental, which is directed to EMT to research.

Colleen Tollefson attended a hearing on Labor Day school start. The resolution passed by this Council was presented to the Committee. One bill did not move forward; the other did but most likely will not continue. This topic can come up again at any point.

John Edman attended the National Council of State Tourism Directors (NCSTD) Spring Meeting in February. Approximately 32 other state tourism directors were in attendance. Of these states, approximately half of them have seen a decrease in funding. Approximately ¼ of the states have seen an increase - through dedicated funding, lodging tax, casino funds. The remaining ¼ budgets have remained the same. With the increase in EMT’s budget, Minnesota’s budget dropped to 30th.

Hospitality Minnesota is hosting Hospitality and Tourism Day at the Capitol on Tuesday, March 11.

There has been a bill introduced to increase the penalty a hotel property can charge patrons for smoking in a non-smoking room.

Hospitality Minnesota is working to seek exemptions for resorts and campgrounds in the change in plumbing codes for hotels.

Need to pay attention to discussions being held to add sales tax to clothing.

Minnesota ranks sixth highest in the nation for tourism tax. Minneapolis is the 8th highest tourism-taxed city.

SF 3087 has been introduced. This would take away the gas tax used for recreation. Tourism industry needs to pay attention to this bill.

Travel Promotion Act: Also presented at the NCSTD meeting was a “Resolution in Support of the Travel Promotion Act of 2008.” This Act would create a public/private partnership which will reinstate the United States as a leader in the international tourism marketplace by creating an umbrella agency for U.S tourism. The bill is currently going through Congress. Congressmen Oberstar and Coleman have signed on. Council members are asked to contact their congressional representatives to sign on to the bill.

Public/Policy Committee - Lisa Paxton: This committee consists of Council members. All are welcome and encouraged to participate in the meetings. When issues are presented to the full Council, if there is significant discussion, they will be referred back to the Public Policy Committee. If issues are consistently re-referred back to the committee, it will need to be determined the value of the committee vs. bringing all policy discussions to the full board.

A motion to approve the Public-Private Tourism Investment Resolution which states:

Whereas, tourism is a key sector of Minnesota’s economy, comparable to agriculture in its contribution to the gross state product;

Whereas, leisure and hospitality in Minnesota generates $10.2 billion in gross annual sales;

Whereas, it is important to continually attract more domestic and international visitors to Minnesota to increase state sales taxes to benefit all sectors of the economy;

Whereas, capital development is vital to enhance Minnesota’s image as a vacation destination for consumers planning their leisure spending;

Whereas, significant private-public investment is needed to improve Minnesota’s leisure and hospitality infrastructure to enhance the state’s tourism appeal;

Therefore, the Explore Minnesota Tourism Council supports:

Private-public investment in the tourism industry to increase visitors and tax revenue to benefit all sectors of Minnesota’s economy.

A motion was presented by Bonnie Carlson and seconded by John Vallerie. All participating members in favor of approval.

The Public Policy Committee was asked to consider the Legacy Act. This act would add a state sales tax to fund outdoor parks, hunting/fishing, arts, parks/trails and clean water. Randy Gutzmann motioned that this is not a role for the Explore Minnesota Tourism Council to pursue. Butch Eggen seconded the motion. All participating members in favor to not pursue any action on the Legacy Act.

Travel Green Report: In 2007, legislation was passed directing Explore Minnesota Tourism to develop a Minnesota travel green program to recognize tourism businesses that have made a commitment to reduce their environmental impact. A task force was created and has met several times over the past year. The committee did not recommend any type of certification program. The three main recommendations of the Task Force are:

1. Educate tourism businesses about “being green”
2. Create a self-reporting system to add “travel green” information to Explore Minnesota businesses and attraction listings, to allow consumers to search on the state travel Web site for businesses utilizing green practices
3. Communicate to consumers travel green business and attraction practices

The next meeting of the Task Force is March 10.

University of Minnesota Tourism Center is conducting the Sustainable Tourism Conference on April 15.

Web Research/Changes - Michele Peters: User group studies were held throughout the region over the past quarter. EMT received some valuable input into the usability of the website. The golf website was redesigned to include a mapping feature. This feature is being added to the exploreminnesota.com site. Another change is in the menu structure: drop down menus have been added. A blog has been added. From the lodging page, the consumer will go directly to the resort or hotel page. An archive of all EMT newsletters has been created. Scenic byways information is being pulled in to the site. Mapping and audio technology will be added to the scenic byways. The industry website is up and running. It is built on blog software. There is an events calendar on the industry website; this is a great place for the industry to keep tourism events on one site. A new feature on the site is the “press room.” This includes a photo gallery for the media, as well as RSS feeds. The My Favorite Minnesota piece is being restructured and will incorporate video.

Grants - Colleen Tollefson: The Innovation Grants began last year. There are some suggested changes for next year, including: Clearly state it is a “Marketing Expense Only” grant program. Staff expenses, administration etc. are not eligible; strengthen the question on available occupancy - ask for specific information on current occupancy rates.

Suggested changes for Organizational Partnerships include: Research component will no longer require three or more communities for funding; ABA and Pow Wow travel trade shows for 2010 will be included in eligibility for the 2009 grant cycle.

Suggested changes for Crisis Grants include: The 60/40 match requirement should be eliminated on some grants; higher cap for crisis grants.

It was suggested the new applicants be guided through the process by regional managers. In the case of Crisis Grants, EMT informs the community.

It was suggested that the changes be posted on the industry site for comments and revisions be addressed at the June Council meeting.

Regional Positioning: There have been many discussions of how to market the regions. It is agreed that to divide the state geographically makes the most sense. A research study was completed by a consultant that confirms this. Each region determined what is unique about their area through their own regional meeting. A new map addressing those regions has been created. The next step is to take the map back to the regions and then meet with the Council via conference call because a decision needs to be made before the end of April in order to get in to the 2009 publications and reconfigure the databases. This will also affect other organizations.

Naming the regions has not been determined.

Tourism Conference: EMT is planning to hold Listening Sessions around the state to look at long-range forecast for tourism. These sessions will be tied in to existing meetings scheduled throughout the year. Plan to use the information gathered to tie into the 2009 Tourism Conference. The Conference will be forward-thinking, with a long-range vision. It will be held in the Twin Cities. This Conference needs to bring the industry together. A meeting to further discuss is scheduled for March 12.

Other:

Family Motorcoach Association held its sport show in Ponomo, California. This group will be in Minnesota in mid-July. Minnesota needs to maximize this opportunity.

Cereal box and brochures are available.

A Council conference call on regional positioning will be scheduled when recommendations from the Task Force are in place, around the end of April.

Information on University of Minnesota Tourism Center distributed.

Tourism Caucuses are held the second Thursday of the month at 7:30 a.m. Call your local Representative and Senator and encourage them to attend.

Remaining 2008 meeting dates: June 11, September 10 and December 2.