March 8, 2021

ilpuntontc

Just Do Travel

Duluth tourist spending tumbles by nearly one-third in 2020

3 min read

But the year could have been worse. At the onset of the pandemic, former Duluth Finance Director Wayne Parson predicted that the city likely would see the $12.4 million in tourism tax the city collected the previous year cut in half by the pandemic.

Mayor Emily Larson acknowledged that the city finished the year with a tough month, in which spending on lodging, dining and drinking slipped nearly 50% from the previous December. But that didn’t surprise her given many of the restrictions in place and the state guidance provided to discourage travel.

Visit Duluth President and CEO Anna Tanski agreed.

“When the restrictions went into place in late November, we knew December was going to become incredibly challenging, because we saw reservations at hotels just drop off dramatically,” she said. “Without indoor dining available and with the restrictions on swimming pools in place, that didn’t allow them to be open at the time, it was a double whammy for the lodging and the attractions and the restaurant sectors. So, it was really felt across every part of our industry, when those guidelines and mandates were put in place.”

Newsletter signup for email alerts

But for the reinvention of the Bentleyville Tour of Lights as a drive-thru attraction, Tanski said the December numbers could have been much worse. She called the holiday light display “a savior.”

“People still came and still were able to enjoy an event, which felt amazing for locals as well as visitors,” Tanski said.

Jennifer Carlson, the city’s new finance director, credits tourism tax revenues from July through October for enabling Duluth to finish the year with collections off less than one-third from the previous year, as many people took advantage of the community’s outdoor offerings.

Larson described Duluth as an attractive destination.

“I think people still continued to want to go somewhere, and Duluth is familiar to many people,” she said. “It’s an easy day trip from many places around the state.”

While Duluth’s tourism industry clearly struggled in 2020, it outperformed the rest of the state in many respects, Tanski said. She pointed to an STR Report that referred to Duluth as the strongest performing hotel market in the state. While the report noted that Duluth’s revenue per available room in 2020 slid 32.6% from its 2019 level, that compares quite favorably with the national revenue per available room, which dropped 47.5% in comparison.

Carlson noted that Duluth’s tourism tax collections were bolstered not only by tourists, but local residents reaching out to support local restaurants. She said the numbers bear that out, as 2020 sales of food and beverages declined 28.6% compared with 2019, while lodging revenues fell by a more precipitous 35.3%.

“I think that goes to show that absolutely the locals have been a big contributor to those numbers being increased,” she said.

The city of Duluth anticipates that tourism tax collections will strengthen further in 2021, returning to 75% of the 2019 total.

“I think that’s a realistic number,” Larson said, adding that it may even be on the conservative side if the rollout of a COVID-19 vaccine proceeds to successfully bring the virus under control.

“I could see us exceeding our projections,” she said. “People are stir-crazy. They’re willing to stay home and stay safe. But once the floodgates open, I think we’ll see a lot more mobility. I think we’ll see people so excited to come back and have some of those very unique Duluth-specific experiences that have been on their mind.”

Tanski said it’s too soon to tell what a rebound of the local tourism industry will look like and how fast it will occur.

“We really anticipate it will probably take four years of recovery to return to a pre-COVID level,” she said. “But that’s with the caveat that we don’t know what the next four months will look like, much less the next four years.

“We’re prepared for just about anything now that we’ve lived through this,” she said.