Record visitors came to Minnesota in 2023, but tourism industry far from recovered

Some might view Minnesota as a flyover state, but a record number of visitors made it a destination in 2023, spending $14.1 billion on dining, shopping, fishing and other activities during what the state’s tourism agency touted as a banner year.

For the first time, tourism spending in Minnesota eclipsed pre-pandemic levels, according to a new report Explore Minnesota released Tuesday. Adjusted for inflation, though, that record visitor spending is still down more than 9% from 2019.

“Just because revenues are up, that doesn’t mean bookings are up or more tables are full,” said Angie Whitcomb, CEO of Hospitality Minnesota. “It just means that people are spending more because it costs more.”

Inflation is affecting everyone, said Kathryn Sutton, deputy director of marketing with Explore Minnesota. But the agency still sees the increase in visitors as a positive sign. A strong 2023, she added, is cause for optimism about the fundamentals of Minnesota’s visitor economy.

“We’re still attracting more people,” Sutton said. “Maybe, they have a little bit more strain on their pocketbooks, but they are choosing to spend time and money in Minnesota.”

Minnesota drew in more than 80 million visitors in 2023, but each visitor spent less than in previous years. On average, each visitor spent $176, about 13% less than in 2019 when adjusted for inflation.

Explore Minnesota researcher Gretchen Nussbaum said because inflation has been a challenge since 2021, year-over-year tourism increases are a meaningful reflection of industry growth in that period.

The report touts an 8% increase in total visitor spending year-over-year with similar rates for spending on lodging, food, transportation and recreation. Adjusting for inflation using overall consumer price index almost cuts that rate in half.

Hospitality Minnesota members across the state and in different industries experienced the rise in revenue differently, Whitcomb said. One issue is operating costs are rising just as consumer spending is.

“I don’t have a single member telling me the bottom line is great,” Whitcomb said.

Hospitality made a big rebound in 2023, Whitcomb added. The Taylor Swift Eras Tour concert and several other large events brought visitors back to the metro.

Compared with years prior, 2023 was a great year, but “that does not tell the story of today,” Whitcomb said.

In greater Minnesota near the North Shore, the pandemic had a lesser effect for many of the association’s members. But with the lack of snow and ice in early 2024, it’s been a hard year.

Nisswa Adventure Rentals in Brainerd Lakes normally makes about $150,000 to $200,000 in snow mobile rentals. Last winter, owner Frank Soukup did zero, he said. With a lack of snow, fewer people traveled up north for skiing and snowmobiling.

“We called it in the industry, ‘the winter that wasn’t and the spring that didn’t,’” said Soukup, who is also a senior strategist specializing in hospitality at WhiteBox Marketing.

While the industry as a whole might not be at pre-pandemic levels, it still has made a difference locally. In total, visitor spending generated a total economic impact of $24.2 billion in 2023, including 180,000 jobs, $8.1 billion in labor income and $2.3 billion in tax revenue.

After more than a decade, the legislature increased the tourism agency’s funding. Explore Minnesota markets the state to prospective visitors and residents alike by showcasing its perks, building travel guides and running ad campaigns.

“It’s demonstrating that, you know, we’re continuing to spread that Minnesota message, and that travelers are interested in Minnesota,” Sutton said. “As always, we can continue to push and get more interest in Minnesota. It doesn’t mean that we’re stopping.”

Caleb Fravel is a University of Minnesota student reporter on assignment for the Minnesota Star Tribune.