Sagging MN tourism industry could get a boost

The continuing effects of the COVID-19 pandemic can still be seen on the Minnesota tourism industry and House lawmakers are looking to provide some financial help.

The need may even force lawmakers to act more quickly on a bill sponsored by Rep. Rick Hansen (DFL-South St. Paul) that would appropriate $6 million in fiscal year 2023 for a tourism industry recovery program.

The House Environment and Natural Resources Finance and Policy Committee heard testimony from several members of the state’s tourism industry Thursday, but took no action on HF3616. According to data from Explore Minnesota Tourism, the industry has sustained nearly $12 billion in travel spending losses since 2019.

Rep. Rick Hansen

The companion, SF2769, is sponsored by Sen. Carrie Ruud (R-Breezy Point) and awaits action by the Senate Environment and Natural Resources Finance Committee.

Hansen originally indicated the bill would be laid over for possible inclusion in an omnibus bill. After hearing testimony, he changed his motion to quicken the process. Hansen said the bill – after time to make changes – is expected to be potentially moved by the committee Tuesday.

“I think the case is here for emergency and timeliness just as much as what we’ve heard earlier from businesses,” Hansen said. “I have a lot of people in my district that work in Downtown St. Paul in the bars and restaurants. If we’re going to help out everybody, being One Minnesota, I think we can hold this over, not for an omnibus bill, but to move it.”

Hansen wants to add that tribal governments would be included and add language that would provide randomization of the grants to avoid a first-come, first-served basis. He also might want to increase the appropriation.

“Your idea of potentially moving this forward in a more timely way makes a lot of sense,” said Rep. Josh Heintzeman (R-Nisswa).

Terry Mattson, president and CEO of Visit St. Paul, said the immediate St. Paul area has lost more than $1 billion in sales and $70 million in related tax revenues, along with the loss of 15,000 to 20,000 jobs in the industry during the pandemic.

Hotel occupancy in downtown St. Paul, according to Mattson, was consistently in the “mid-60s percentile” and declined to about 25% in 2020 and 32% in 2021. Mattson said the numbers for January are back to about 25%.

“Minnesota tourism was, and is still, deeply impacted by this global pandemic,” Mattson said. “The pain is widespread. The comeback curve swings widely depending on where you are in Minnesota. Recovery also depends on who you are. While some have gained momentum, there are still many, many challenges and uncertainties for all of us.”

Representing the Minnesota Tourism Growth Coalition, Sarah Psick said the $750,000 appropriated in 2021 for a tourism recovery grant program was accounted for within eight hours of the application period opening.

“So, clearly there’s a need for this funding today,” Psick said.