Bruised by COVID-19 pandemic, Minneapolis Convention Center expects slow recovery

It could take three years before business returns to pre-pandemic levels at the Minneapolis Convention Center.

Efforts to stop the spread of the deadly coronavirus nearly shuttered global business travel and trade show industries the past two years. The impact was certainly felt in Minnesota, where planned conventions were replaced by virtual gatherings and shows like the popular Twin Cities Auto Show closed early in 2020 and moved outdoors in 2021.

The sprawling Convention Center on the edge of downtown Minneapolis saw its revenue was down at least 70% in both 2020 and 2021 compared to pre-pandemic levels. Meanwhile, the local hospitality industry lost thousands of workers and millions in tax revenue.

"Those are pretty substantial challenges," said Jeff Johnson, the center's executive director. And not only for the convention hall, but for the people who work there, and whose jobs at nearby hotels and restaurants feed off its visitors, he said.

Business is trending in a positive direction. Revenue increased in 2021 from the year before. There were tens of thousands of visitors to the center earlier this month for festivities surrounding the NCAA woman's Final Four championship. And a few conventions are on the calendar.

But Convention Center officials expect a long and slow recovery, and have launched a three-year plan to get there. Their success depends on easing staffing shortages and bringing back business travel and corporate meetings. The downtown council and area businesses say addressing public safety issues and returning office workers downtown are also critical pieces.

"The Convention Center, historically, has been one of the big economic generators for downtown," said Steve Cramer, president and CEO of the Minneapolis Downtown Council. It hosts about 400 events annually and they are mostly booked a year or so in advance.

How bad has it been?

Owned by the City of Minneapolis, the Convention Center is an economic anchor for downtown. It lures visitors who fly into town, rent cars to get around, book reservations at hotels and restaurants and perhaps catch a concert or show — all while paying taxes.

The city relies on that revenue to pay debt services on the convention center, Target Center and U.S. Bank Stadium with a mix of hospitality sales taxes, including a 0.5% citywide sales tax, a 3% downtown liquor tax, a 3% lodging tax and a 3% downtown restaurant tax. Funding also comes to the city through a 3% entertainment tax on live-event tickets.

But for the past two years, the Convention Center has been sitting mostly empty. The impact:

The center transitioned many of its workers to election- and pandemic-related work to prevent layoffs and to keep the lights on. The hall served as the distribution site for all mail-in ballots for the 2020 presidential election; and for the past two years, it was one of Minnesota's largest COVID-19 vaccination and testing sites.

"We weren't able to do maybe the job that we love and that we do every day, but we still were able to serve," Johnson said. "And we were able to keep a good portion of our staff employed."

Though the convention hall has been fully re-opened for the past few months, business is still down about 40% and the center is grappling with a staffing shortage.

"There's no other choice" but to recover from the pandemic, said Johnson. "I think we will."

Recovery plan launched

Minneapolis may not see a full recovery of its tourism industry until 2025, with conventions expected to be slow to return to normal, said Kevin Kurtt of Meet Minneapolis, which helps book meetings and events. And business travel will not see a full comeback until 2024, he said.

Meet Minneapolis has redoubled efforts to help revive the city's hospitality industry with a three-year recovery plan that will cost more than $6.5 million.

The center received $1 million in pandemic relief money through the city, with half of that aimed at "marketing the city in a different way" and bring tourists and visitors back.

Goals for the recovery plan include:

Meet Minneapolis is also working with a local public relations firm to entice more people to visit Minneapolis, particularly those living within 50 miles of downtown.

The center has budgeted to host about 300 events this year. But Johnson said it's unlikely that they will hit that target. So far, they have booked at least 17 large events for 2022, including the Minneapolis Home & Garden Show, the fan festival for the NCAA Women's Final Four and the North American Society for Trenchless Technology No-Dig Show, the largest trenchless technology conference in the world.

"What we are seeing is that human beings want to be together, they want to meet," Johnson said. "After we all have sat on Zoom and Teams meetings for the last two-and-a-half years, we understand the benefit of being able to be together with other human beings."

COVID still an issue

New COVID-19 variants continue to be a concern and have prompted several groups to cancel recent events at the Convention Center.

The Music Teachers National Association was supposed to hold its National Conference at the end of March in Minneapolis, but opted to make it virtual. The group's leaders said the decision to cancel the in-person event was "for the health and safety of everyone involved." The conference puts on more than 100 sessions and draws music artists and educators from around the world.

The Evangelical Lutheran Church in America was scheduled to hold its Youth Gathering at the Convention Center in July, but announced on its website it was canceled "due to the ongoing pandemic, the recent COVID-19 surge and public health considerations."

And the United Methodist Church canceled its early September General Conference at the Convention Center for similar reasons.

"It will be a climb for us to kind of get back to a more normal state, and it's not going to happen overnight," Johnson said.

Sign of hope

Yet the last few weeks have brought signs of hope. The center had a busy three-week run thanks to events like a youth volleyball tournament, the Women's Final Four and Bollywood and Mary Kay conferences.

"We were as busy as we have been in two-and-a-half years," Johnson said.

Hotels had two of their best days since the pandemic's onset the week of March 14. Occupancy rose to nearly 50%, up from 20% in 2021 the same week, Johnson said.

At the Hyatt Regency Hotel in Minneapolis, its packed restaurants signal the path to recovery isn't too far away. John Yeadon, the hotel's general manager, said they are anticipating a busy spring, summer and fall, comparable to pre-pandemic 2019 levels.

Hyatt Regency is the second-biggest hotel in downtown, and sits two blocks from the convention center. Yeadon said he hopes his guests will also fill downtown restaurants, museums, theaters and attractions.

"We're all interconnected, and the ripple effect of the convention center and the hotels is felt in so many businesses downtown," Yeadon said.

Some restaurants and bars are also seeing business improving.

Shane Higgins, general manager of Brit's Pub said he's getting business from nearby hotels, like the Hyatt Regency and the Hilton. Sales are also expected to improve in the summer, but for restaurants to survive, downtown Minneapolis must fully recover from the pandemic, Higgins said.

"We're hoping for some normality," he said. "We are hoping everything comes back."