While the downtown Minneapolis hospitality industry is starting to recover as a whole, Carlos Rodriguez is still waiting.
Downtown Minneapolis gains ground in tourism, ‘taking our story back’
Central business district hotel operators say crucial business travel is slow to return.
The Minnesota Star Tribune
February 29, 2024 at 6:30PM
The general manager of the W Minneapolis in the Foshay Tower said places like his rely on business travel, and that has not returned close to pre-pandemic levels. And he can’t predict when it will.
“The business travelers are not required to go back to the office,” he said while attending the Meet Minneapolis annual luncheon Thursday. “Once they come back to their offices, we’ll see them travel.”
Riana Van Staden, sales and marketing director of Royal Sonesta hotel, also monitors news about Target and U.S. Bank bringing back office workers.
“We’re seeing significant growth continue, especially in the sports and convention business, but the corporate business travel is still slow to recover,” she said.
Melvin Tennant, chief executive of Meet Minneapolis, said Thursday that while the downtown tourism and convention sector has a ways to go, it made a big leap in 2023 toward capturing traffic closer to pre-pandemic levels.
“We are taking our story back,” he said at the group’s annual luncheon.
There’s plenty more work to do, he said, but Meet Minneapolis pointed to one all-time high set last year: the number of “future group hotel rooms.” In other words, people booked in advance for the big events, and are continuing to do so.
In all, those advance bookings totaled 579,000 rooms.
“Once those bookings actualize, we’ll see the benefit,” Rodriguez said of the W hotel.
The city attracted more than 700 events last year, and 713,000 people attended different events at the Minneapolis Convention Center, the convention bureau said.
Convention center revenue increased 14% to $18.5 million year over year, but is down from $21.2 million in 2019. Lodging taxes rose 20% to $10.6 million from 2022, surpassing $8.6 million in 2019.
Downtown Minneapolis continues a long recovery as business travel returns slowly, hybrid work seems here to stay and store vacancies have risen. In addition, perceived safety concerns continued to affect visitor traffic.
Hotel demand in Minneapolis increased 15% year over year in 2023. However, occupancy at downtown hotels, at 51%, remained below 2019 levels, when it was about 68%.
Dale Krogman, sales and marketing director at Hotel Emery, has stopped trying to predict when a full recovery will happen.
“We’re trying to be cautious,” he said.
The good news is hotel operators say they’re now finding and retaining workers, alleviating a severe shortage they faced a couple of years ago, with 33,000 working in the tourism and hospitality sector downtown.
Tourism officials went on the offensive in 2023 to turn the city’s image around. Meet Minneapolis last March launched a leisure tourism campaign.
More than 2,500 people gathered in August at the convention center for a Connect Marketplace conference of meeting and event planners, the convention bureau said. The group reported its social media channels set a record, generating around 49 million impressions last year versus 30 million in 2022.
“I’m proud of what our staff and hospitality industry has done to put us back on the map,” Tennant said in an interview at Thursday’s event.
Key events to come this year include the Big Ten Women’s and Men’s Basketball Tournaments in March; the U.S. Olympic Gymnastics Team Trials in June and an American Public Health Association annual meeting in October.
Looking ahead, Meet Minneapolis said it’s aligning public, private and civic partners around a shared tourism vision so the city is competitive in the meetings, events, and visitor markets in the future. Meanwhile, a task force of hotel general managers is studying a potential Minneapolis Tourism Improvement District. Those districts typically involve a service charge on customers that goes toward efforts to boost tourism in an area.
Mayor Jacob Frey called developments like the Rotary International Convention set for Minneapolis in 2029 a big deal.
“What that means practically is the streets will be packed,” he told the group. “The bars will be so packed you won’t be able to get a seat.”
But already, he said, the convention center has been “rocking.”
“Now is the time for a beautiful fresh start,” he said.
Health officials say the recent outbreak of the highly contagious virus looked bad this summer, but optimism is growing they may have contained it.
