Downtown Minneapolis hotels posted stronger year thanks to concerts, events

Whether Minneapolis’ hotel scene is thriving or just surviving depends on which hotelier or downtown booster is drawing the conclusion.

At the Renaissance Minneapolis Hotel, business is back to pre-pandemic levels at the The Depot despite business travel still trailing what it once was. Meet Minneapolis credited conventions, concerts and other events as a reason for more room bookings in 2023. But the operator of Moxy Minneapolis Downtown and the Residence Inn said last year’s boost isn’t quite cause for celebration.

“We’re coming from a place of being so far behind,” said Graves Hospitality chief executive Ben Graves, adding he feels other downtowns have recovered more quickly.

Central business district hotel stays jumped 15% last year vs. 2022, Meet Minneapolis reported. The rise in demand translated into nearly 2 million hotel room night stays, which generated an estimated $10.5 million in lodging taxes for the year, the convention bureau reported.

Minneapolis hotel occupancy improved more than 9% last year vs. 2022 despite a nearly 6% increase in room supply. Hotel stays peaked in August.

The upward trend bodes well for an area that has dealt with major challenges in recent years: a global slump in business travel, the pandemic shift to remote work, store vacancies as shopping shifts online and visitors’ safety concerns after George Floyd’s 2020 murder. For context, the total occupancy in 2019 was about 68%. Last year after the boost: 51%.

Graves said he believes downtown Minneapolis has done well to re-establish entertainment — including bars and restaurants — as well as a safer environment, but his two hotels still hurt on many nights with fewer business travelers.

“You probably will see continued growth in Minneapolis because we are coming from a low spot,” he said.

The Depot Managing Director Michael Clark, meanwhile, said companies and associations have brought together large groups at his hotel’s 16 meeting rooms encompassing 73,000 square feet because they crave time together while otherwise working remotely. Business travel spending in the United States and Europe was expected to rise to two-thirds of pre-pandemic levels by the end of 2023, according to a Deloitte corporate travel study.

“In the new post-pandemic business environment, people wanting to come together is just going to be stronger,” Clark said, adding he has seen other downtown hotels with large meeting spaces experience similar demand that he doesn’t think will slow any time soon.

Meet Minneapolis said the Minneapolis Convention Center played a significant role in the performance of the city’s hotels in 2023, with nearly 713,000 people attending 205 conventions, trade shows and sporting events throughout the year.

The convention center hosted the return of the Twin Cities Auto Show and several major conventions, including the National Pheasant Fest & Quail Classic and Advanced Manufacturing Minneapolis.

Taylor Swift concerts, Vikings games, and the Twin Cities Pride Festival were among other major draws to downtown.

“Together, we are changing perceptions, creating memorable experiences for our visitors and making a positive economic impact in our city,” said Melvin Tennant, the Meet Minneapolis president and chief executive, in a statement.

Overall hotel demand nationwide was flat last year compared to 2022, according to CoStar, a global provider of real estate data, analytics and news that put together the Minneapolis data. The St. Paul central business district was up 2% for 2023 compared to 2022 while Bloomington — also home to tourism driver Mall of America — rose 4% for that period. Chicago and Los Angeles saw increases of about 9% while Washington, D.C., experienced a jump of 16%.