fedgazette

The year of the minivan

After 9/11, tourism took a turn toward safe, family options--a perfect fit for the district

Frank Jossi - Contributing Writer

Published May 1, 2003  |  May 2003 issue

Minivan illustration

For much of the tourism and travel industry, 9/11 was a knockout punch, a haymaker to an industry already wobbly-kneed from a weakening economy. After seeing a long stretch of strong growth—including almost 7 percent in 2000—nationwide tourism plunged 5 percent in 2001.

The Ninth District felt some of the sting. Tourism officials here reported generally slower growth—and actual decline in some instances—than it had grown accustomed to over the previous decade.

But while the national tourism and travel industry is trying to find its legs, much of the district appears to have caught a second wind, at least compared to the rest of the country. According to the Washington, D.C.-based Travel Industry Association, the industry managed to stop the bleeding last year, posting a small 0.4 percent decrease nationwide, thanks to a slight rebound in leisure travel.

In contrast, Montana and the Dakotas reported strong tourism economies last year, and the Upper Peninsula (U.P.) of Michigan saw a healthy 10 percent bounce in 2002 after a poor showing in 2001. Wisconsin and Minnesota were still collecting 2002 data as of this writing. Both posted solid tourism gains in 2001, though slow business travel in the Twin Cities and poor winters in both states may have jeopardized a repeat performance for 2002.

No place like home

So why did the district do so well? It's simple. People stayed close to home and drove to their destinations. That visit to Mount Rushmore suddenly became a reality for many families who may have left the district for other tourism hubs in the past. Thousands of decisions like that fueled a strong tourist season last year in much of the district. Ninth District states also have little business and convention travel, with the notable exception of the Twin Cities and, to a lesser degree, a few regional centers. Places off the beaten path had almost nothing to lose when business and convention travel dropped precipitously.

While the Upper Midwest may not have a large number of vibrant urban areas, ocean shoreline, mountain ranges or enormous amusement parks found in other tourist hotbeds, the industry still plays a significant role in the region's economy. It ranks as the second biggest industry in every state or region except Minnesota and Wisconsin, where a diverse economy places it as just one among several major economic generators.

The tragedy of 9/11 may have actually helped a few states. South Dakota had a banner year due to a heightened sense of patriotism and fear, with the total economic impact reaching a historic high of $1.7 billion. "In 2002 we experienced customer spending at the highest level we have ever had," said Nicole Nordbye, communications coordinator for the South Dakota Department of Tourism. "We'd like to believe that is because we're seen as a safe destination. In the wake of 9/11, tourists stopped flying and that helped us because we have a lot of visitors coming in by car."

Visitation was up at national parks and other sites, and attendance at Mount Rushmore jumped 13 percent to almost 3 million in 2002. Nordbye believes the desire by Americans to embark on trips involving an element of history helped boost the number of visitors to Mount Rushmore, one of the country's most identifiable and celebrated monuments.

Mount Rushmore's appeal increased tourism-related sales in the Black Hills region by 8.4 percent last year after an overall drop the previous year. "We think what was wrong with a lot of the world was right in South Dakota," said Bill Honerkamp, president of the 570-member Black Hills, Badlands & Lakes Association in Rapid City, S.D. "The whole national perspective was fear of overseas travel, fear of flying, a desire to do something patriotic and a desire to be with family, and we're a premier family destination."

Neighboring Montana and North Dakota saw visitors returning last year. Betsy Baumgart, administrator of the Montana Promotions Division in Helena, said the number of tourists increased a modest 2.3 percent last year after a 1 percent bump in 2001, with total sales increasing almost 6 percent to $1.8 billion last year.

Montana has seen growth each of the last two years, though it has leveled off compared with strong growth through much of the 1990s. But Baumgart's not complaining. "We're just surprised and pleased to see we do have growth now. Fortunately we're not dependent on national business travel, where you see the biggest declines," she said.

Like its neighbors, North Dakota appeals to visitors as a safe, affordable place with plenty of historic sites and a great attraction in Theodore Roosevelt National Park, said Joanne Olson, deputy director of the state's Tourism Division. Its goose and pheasant hunting season continues to draw visitors from around the country, as many as 30,000 last year, she said. The regional pull of Fargo and Grand Forks for shoppers from western Minnesota and Canada—who may have dropped by a historic site or stayed at a hotel during a splurge at the mall—added significant dollars to the tourism economy, said Olson.

The message was no different in northern Wisconsin or from the U.P. Wisconsin saw a 3 percent increase in 2001, despite 9/11, as urbanites from Chicago, Milwaukee, Madison and the Twin Cities visited the state's rugged northern region in even greater numbers than before, said Dave Scheler, research coordinator for the Department of Tourism in Madison. Northern Wisconsin, he added, hosts few conventions so drop-off in that kind of travel had no great impact.

The U.P. was one of the few areas in the district that saw serious decline after 9/11. It "took a severe beating" in 2001 and the first half of 2002 due to 9/11 and a lack of snow that created an economic whiteout, said Tom Nemacheck, president of the Upper Peninsula Travel and Recreation Association. But business is rebounding, thanks to the perceived safety factor and a stellar snowfall last winter. Lodging fees in the U.P. are up 14 percent for the first half of fiscal year 2003 (July 2002 through January 2003). "We're relatively safe, like comfort food, and the more urban areas of the region just don't have this comfort food flavor," said Nemacheck "It's the urban areas of our state that are really hurting."

In fact, the most urbanized (whole) state in the Ninth District fared about average. "I'd say the results have been very mixed; there's no one place that represents how we did overall in the state," said Joan Hummel, spokeswoman for the Minnesota Department of Tourism. "Some parts of the state did good or better than expected, others did worse. It's not been the impact of 9/11 as much as the economy and the weather. We didn't have a great winter last year and the spring and summer got off to slow starts."

The Twin Cities, one of the nation's premier business markets, has been hurt by falling business travel, she said. The first two quarters of last year were slow, but national reports suggest a small third-quarter surge in spending on business transit helped create a small rebound. The region's sagging economy, beset by significant job losses, has contributed to a barely average year, she said.

The outlook

Looking ahead, much of the district has some ground to make up after poor snowfalls left many resorts with empty rooms. Snowmobilers, cross-country skiers and other vacationers failed to materialize until late January in most of the district. Even Montana failed to see much powder until late in the season, especially in the downhill ski region of Big Sky in the northern Rockies.

"We finally have some snow but it started slow, especially in Big Sky," said Stuart Doggett, executive director of the Helena-based Montana Innkeepers Association. "We had a miserable January and a better February with a better accumulation [of snow] and business is now up. But it won't make up for the lack of skiers earlier in the year. It won't be as good as last year in Big Sky."

Winter in Minnesota and northern Wisconsin did not get off the ground until late January, when the first snowfall hit the tourist-rich northern resort areas of both states. The Milwaukee Journal Sentinel reported a Bayfield, Wis., outfitter had not rented even one pair of snowshoes as of mid-January, in contrast to the usual 40 customers or so who rent them each week during a typical winter.

In the Black Hills more than half of the winter recreation season was over by the time snow fell, said Honerkamp. Even with March and April snowfalls, the minds of potential visitors have turned to spring rather than winter activities, he added, a problem other state tourism officials concede make it unlikely the bad winter start can be made up by a great finish.

Peering into the crystal ball for hints on what will happen for the rest of the year remains problematic. The word "uncertainty" comes up in conversation often among tourism officials. War with Iraq will play a role in the prospects, although tourism promoters seem to think that whatever happens in the Middle East will be unlikely to stop people from traveling within the region.

Hurting the ability of tourism officials to offer a solid scenario of travel expenditures is the changing nature of the length of stays and advance booking. The mini-vacation has grown popular, meaning fewer days spent away from home and office. That increase in shorter vacations, and thus a subtle erosion of the drive market, has led Honerkamp's Black Hills organization to "beef up" advertising to the flying market. Declining visitor days come as a result of a growing number of busy two-earner and single-parent families who are time poor and struggle to simply schedule a vacation of any length, he said.

Montana has seen a decline in the number of days a visitor stays and the size of groups coming to the state, dropping from 2.6 individuals to 2.4, said Baumgart. The same goes for South Dakota, where interstate information centers report average party size plummeting from 3.8 in 2000 to 2.6 in 2001. Perhaps as a measure to counteract that corrosion, South Dakota's marketing plan for this year starts off with a section on "group tour marketing."

Minnesota's resorts, meanwhile, tell state tourism officials more vacationers are waiting until the last minute to make reservations, another clear sign of general unease and difficult scheduling and monetary issues among travelers, said Hummel. Employees in a company facing layoffs, she suggested, may wait to see if they survive or lose their jobs before taking a few days or a few weeks off. Minnesota travelers, too, have opted for shorter stays or mini-vacations. "Duluth has definitely benefited from close-to-home travel," she noted. Rising gas prices could hurt some states like Montana and South Dakota, which require a substantial drive from the nearest population centers. And the economy, the wild card, has yet to pick up much steam, another factor likely to force people to stay close to home to save money or skip vacation altogether. Throw in the region's notoriously strange weather patterns of recent times—snowless winters, wet springs, scorching summers, drought—and you have a recipe for, well, who knows?

Montana's Baumgart believes all those factors could come into play in her state, but she feels the year could still turn out fine. The state's reputation as a safe haven and drive-to attraction will help. She figures Las Vegas, Florida and the East Coast will struggle more in attracting national and international travelers. South Dakota's Nordbye sees reason for "optimism" as her state—in addition to North Dakota and Montana—gears up for the national Lewis and Clark bicentennial with a host of tourism-related activities over the next three years.

Neighboring North Dakota figures people will come despite the economy and war. "Whether it's war or gas prices, I think that what held true after 9/11 will hold true—people don't want to get too far from home. They'll go two or three days to their destination and that's all," said Patti Lewis, executive director of the North Dakota Hospitality Association in Bismarck. "I think even if the gas prices go higher we'll still see a lot of travelers here because it's still a lot cheaper to drive to North Dakota, for many people, than to buy plane tickets and fly to somewhere like Disney World."

Moving east, Minnesota's Hummel sees the outstate region as benefiting from the continued habit of people driving to locations rather than flying. The Twin Cities will attract leisure travelers but continue to suffer from diminished business travel. Even leisure travel, however, could take a hit from uncertainty over war, jobs and the economy in general. "In 2003 we'll hold our own and we'll be pleased to take advantage of the close-to-home travel," she said. "The national outlook shows the same, with a soft travel market until 2004. It's going to take a while to recover."

Northern Wisconsin will figure in the travel plans of many tourists regardless of the national economy. As a "safe harbor" from the storm of international strife and the stress of big metropolitan areas from which it draws travelers, the northern tier of the state should do fine, said Scheler. The region remains highly affordable to many families even in tough economic times. "I'm not real optimistic but I'm not real pessimistic, either," he said.

Optimism runs strong in the U.P. "I think we'll be fine—we haven't worn that 'warm fuzzy feeling' thing out," said Nemacheck. "Under the conditions I see we're positioned to hurt less than other areas. I think we'll continue to see us up 10 percent over last year."

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