Minnesota hospitality, tourism businesses seeing fewer customers and less income, survey says

A new report says nearly half of Minnesota hospitality and tourism businesses surveyed are seeing fewer customers and less income as the state heads into its most profitable season.

The Federal Reserve Bank of Minneapolis and Hospitality Minnesota heard from nearly 120 businesses across the state. Most were lodging, restaurants or bars. More than 60% of them say costs are going up, and some blame tariffs and Minnesota's new paid leave policy.

They're hesitant about passing those costs on to customers because they worry they'll lose more business. The report notes an owner of one central Minnesota resort stated, "Guests seem to be holding their discretionary spending 'close to their chests' in light of inflationary pressures and alarming concerns about the future." 

A northeastern Minnesota business owner said, "Between the price of gas/diesel and the cold shoulder Canadians are giving us, I'm not very optimistic on this season's potential."

Half of the surveyed businesses say they're pessimistic about the next six months.