INVESTING IN TOURISM FOR THE GOOD OF MINNESOTA
Tourism means business.
Around the globe, tourism is a big business. In fact, it’s a major contributor to economies in most countries, including the U.S.
It’s no different here at home: In Minnesota, tourism is a $10.5 billion industry, with revenues spent by 41 million travelers.
Tourism creates jobs, from entry level to management, in businesses such as lodging, restaurants, attractions, shops, arts, and advertising. In Minnesota, there are 244,200 jobs in the leisure and hospitality industry alone.
Leisure and hospitality provide over 10% of total employment in 45 of Minnesota’s counties.
Minnesota tourism doesn’t just benefit the metro area and places "up north." It plays a part in the economy of every single county in the state, including small towns and rural areas. Communities and businesses across the state promote themselves to travelers.
Tourism promotion is an investment that pays off.
Tourism generates $650 million in state sales taxes—60 times the amount of the state tourism budget.
Leisure and hospitality taxes account for about 15% of the state’s sales tax revenue.
Every $1 invested in state tourism marketing returns an estimated $53 in gross sales and $20.40 in wages.
More than 50% of the state tourism budget is matched by private industry investment through partnerships with Explore Minnesota Tourism.
In communities large and small across the state, spending by visitors supports amenities that add to the quality of life enjoyed by local citizens. These include theaters, museums, art galleries, specialty shops, restaurants, and even places like grocery stores, hospitals and car dealerships. In many communities, especially smaller and mid-sized cities, these are amenities that wouldn’t exist without the support of tourism dollars.
Although they may not realize it, most Minnesotans benefit from the state’s tourism industry.
There is a critical need to increase Minnesota’s investment in tourism.
High gas prices and the current economy have led to changing travel patterns, with fewer trips, shorter stays, and closer-to-home destinations. This has increased competition for travelers in Minnesota’s traditional tourism markets.
Lodging occupancy and revenue across the country, and in Minnesota, are feeling the affects of these changing travel patterns, with many businesses reporting declines in room demand and revenues.
During a time when Minnesota tourism businesses are facing special challenges, the state tourism budget has slipped to 30th in comparison to other states.
Within our region alone, we are being severely outspent by many of our competitors, giving these competing destinations a critical advantage.
| State |
Tourism budget |
Rank |
| Illinois |
$50.4 million |
4 |
| Missouri |
$20.7 million |
12 |
| Wisconsin |
$15.1 million |
20 |
| Michigan |
$12.0 million |
25 |
| Minnesota |
$10.9 million |
30 |
| South Dakota |
$10.8 million |
31 |
In real dollars, adjusted for inflation, the Minnesota state tourism budget is smaller now than it was 20 years ago.
Minnesota is missing an economic opportunity.
Minnesota lodging businesses and other hospitality businesses have the capacity to serve additional visitors.
Past results have shown that visitor spending has a significant impact on local businesses and communities, as well as on the state economy.
By growing the number of travelers to the state, we can grow the positive impact on the economy.
But, Minnesota is falling behind the competition. Without increased marketing dollars, Minnesota can’t tap into such fertile nearby markets as Chicago, and is limited in how effectively it can advertise in traditional markets.
Last year, for example, other states spent almost four times as much as Minnesota did to buy tourism ads in the Twin Cities television market. The Twin Cities is a major tourism market for destinations in greater Minnesota, but Minnesota businesses compete with other states for these customers.
Although Minnesota has kept pace in developing the kinds of attractions that appeal to visitors, it takes advertising and publicity to let people know what’s here to enjoy. "Build it and they will come" just doesn’t work in the tourism business.
An increased investment in tourism promotion would be used to:
Increase the impact of Minnesota tourism advertising and electronic marketing in current markets, and expand to new markets.
Increase partnership grants for tourism marketing by communities across the state.
Increase Minnesota’s ability to tap into such growing international markets as Canada.
Streamline and enhance the technology that is the backbone of Minnesota’s tourism website and other electronic marketing endeavors.
An increased tourism investment would pay off with these estimated results:
| Additional: |
$5 million budget increase |
$10 million budget increase |
| Tourism sales |
$263 million |
$526 million |
| Taxes |
$23 million |
$46 million |
| Jobs |
2,800 |
5,600 |
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Merrill “Dutch” Cragun - Resorts
Chuck Dougherty - B & B
John Edman (Chair)
Butch Eggen - NE Minnesota
Randy Gutzmann - Fest & Events
Nancy Hanson - Trails
Brad Jones - Convention Fac.
Julie Lunning - MACVB
Mark Novotny - Resorts
Cynthya Porter - Media
Ingrid Schneider - Ex-Officio - U of MN Tourism Center
Dave Siegel - Hospitality Associations
Ted Siefert - Counties
Charles Skinner - Lodging
Hank Todd - Travel Agencies
John Valliere - Golf
