Rising gas prices could be a boon for Minnesota resorts

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Soaring gas prices that are putting the brakes on long-distance summer vacations could be a boon for Minnesota resort owners.

For some families, the cross-country road trip to Yellowstone or Disneyland may be on the back burner this year. But that will again make nearby vacation spots, such as the state’s many resorts, a better bet for many.

“People can say, let’s do another COVID vacation,” said Ed Tausk, owner of Vermilion Dam Lodge, about 65 miles west of Ely. “I’m looking at my calendar and I’m full until August.”

“If nothing changes, it will be another banner year,” Tausk added. “But everything can change quickly.”

Memories of the start of the pandemic in 2020 weigh heavily on many business owners. Due to the initial uncertainty about the virus, resort owners dreaded answering their phones as cancellations mounted. But within weeks, Tausk said, his phone was ringing nonstop as nearby outdoor destinations became the vacation of choice.

“It was crazy,” he said.

Tausk was one of several resort owners to post a banner year in 2021. This year is shaping up to be another good year, with many bookings made months – sometimes a year – in advance. But resort owners also know that families are feeling the pinch at the grocery store and at the gas pump.

“There may be a tipping point when they have to give up the vacation this year,” Tausk said. “I haven’t seen it yet, but I have a feeling we’ll see a few. [cancellations] here and there because people’s disposable income is affected.”

Inflation and gas prices have replaced COVID-19 as the main stumbling block for travel this summer, according to a national survey, said Ben Wogsland, executive vice president of Hospitality Minnesota, which represents the the state’s restaurant, lodging, hotel, resort and campground industries. .

But there’s still a pent-up demand to travel and connect with family, Wogsland said. So people can replace longer trips with trips closer to home. And that should be a bonus for Minnesota resorts that are already expecting a good year.

The bad news: Many homeowners can absorb higher costs caused by inflation while continuing to battle an easing but still concerning labor shortage.

More than 6,000 workers entered Minnesota’s hospitality industry in April, Wogsland said. Nonetheless, the hospitality and leisure industry lost 25,000 workers compared to 2019, he said.

“Most try not to turn away clients or cut hours or services because of it,” he said. “So you have GMs and owners cleaning rooms…and working extra hours to fill in all the gaps in the labor shortage.”

Look for solutions

Resort owners are using every tool possible to bolster their workforces, Wogsland said.

Some rely on the federal J-1 visa program that allows international college students to enter the United States for temporary work. COVID-19 travel restrictions have stifled the program for the past two years, but resort owners expect to see more international students this year.

“Our population here is too small to have enough seasonal workers, so international workers are a big plus for us,” said Jim Vick, general manager of Lutsen Mountains on Lake Superior’s north shore.

To compete for workers alongside McDonald’s and other restaurant and service companies, many resorts have raised wages, expanded benefits, and increased work flexibility for a new generation insisting on work-balance. personal life.

Welcoming people who don’t want to work weekends in the leisure industry, which caters to visitors seven days a week, creates “a little setback,” said Fair Hills Resort fourth-generation owner Beth Schupp. in Detroit Lakes and the Five Lakes Resort. at Frazee.

“We have to adapt for them to stay because they can walk and find jobs anywhere else,” she said.

That’s why the owners have also raised wages, some significantly. Tausk used to pay workers $10 to $15 an hour to clean his 25 cabins on Lake Vermilion. Now he pays $20 to $25 an hour. It has enough staff to get through the season, bolstering its workforce with retirees camping nearby in their RVs.

Andy Leonard, owner of East Silent Lake Resort near Dent, has built three RV sites and added about half a dozen permanent housing options for on-site workers. “We are trying to be creative to solve this problem [shortage],” he said.

Paul Bugbee, the third-generation owner of the Bug-Bee Hive Resort in Paynesville, still needs eight more workers to round out his staff of 27. But the labor shortage doesn’t look as bad as it did in 2021, when he went to the local alcohol rehab center looking for prospects.

“Do you have anyone who could help you?” he asked the director of the center. On Saturday he had five new workers; three of them are staying this year.

In some resorts, jobs are unlikely to be filled, forcing landlords to cut services.

Justin Lederer, manager of McQuoid’s Inn on Lac Mille Lacs, had a dozen launch boat captains. Now he has four. “People don’t want to work weekends,” he said.

At Schupp’s Fair Hills Resort in Detroit Lakes, daily cabin maintenance has been replaced with on-call service.

“On the weekends we all do the dishes and clean up,” Schupp said. “Sometimes we call friends to help us. You all do what you have to do.”

When Schupp ran out of dishwashers sometime last summer, the resort went to “China Lake” – better known as paper plates. When the sailing instructor failed to show up, Schupp replaced him.

With rising inflation affecting their bottom line, many resort owners may need to do even more.

Bugbee raised rates by 3.5% this year, but rates were set last fall, long before inflation more than doubled.

“The cost of everything is going up, from the cost of equipment to the cost of filling that equipment with gas,” he said. “That means I’ll have to cut other costs, like labor.”

That means owners will be doing more of the work themselves – like Bugbee mowing until 9 p.m. on a recent evening.

Even so, he and other resort owners are eagerly awaiting the start of the summer season.

“Everyone I talk to says it’s going to be a great year,” Schupp said. “I think people are happy doing what they’re used to doing.”

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