By Tim O'Neill and Cameron Macht
October 2021
Ready for a road trip or weekend getaway? For your destination, consider heading to Northwest Minnesota. The 26-county region, the largest planning region in the state, boasts thousands of lakes for boating, fishing, canoeing, and kayaking; dozens of state parks, forests, and recreation areas; trails for hiking, biking, cross-country-skiing, and snowmobiling; the headwaters of the mighty Mississippi River at Lake Itasca; and the resorts, towns, and cities in which to eat, relax, and stay the night. Suffice it to say, tourism is vital to Northwest Minnesota's economy and culture.
To measure the importance of tourism in Northwest Minnesota and how it's doing in recent years, we'll take a specific look at a select number of sectors: Accommodation and Food Services; Arts, Entertainment, and Recreation; and Retail Trade. For context, Explore Minnesota looks specifically at Leisure and Hospitality, as well as aspects of Retail Trade, when showcasing the state's tourism. Leisure and Hospitality breaks down into Accommodation and Food Services and Arts, Entertainment, and Recreation.
According to data from the Quarterly Census of Employment and Wages (QCEW) program, Northwest Minnesota had 2,020 establishments in Leisure and Hospitality supplying 24,159 covered jobs during the second quarter of 2021. As such, Leisure and Hospitality accounts for one in every nine jobs (11.0%) in the region (Table 1).
Nearly 90% of Northwest Minnesota's Leisure and Hospitality employment is in Accommodation and Food Services. As of the second quarter of 2021, this major industry sector had 20,860 covered jobs at 1,605 establishments in the region. Ranked by employment, these jobs are in Restaurants (13,164 jobs), Traveler Accommodation including Hotels and Motels (5,349 jobs), Drinking Places (Alcoholic Beverages) (1,480 jobs), RV (Recreational Vehicle) Parks and Recreational Camps (571 jobs), Special Food Services (227 jobs), and Rooming and Boarding Houses (68 jobs).
While only making up about 10% of Northwest Minnesota's Leisure and Hospitality employment, Arts, Entertainment, and Recreation industries are still highly visible. Northwest Minnesota had 415 establishments in Arts, Entertainment, and Recreation supplying 3,299 covered jobs during the second quarter of 2021. Ranked by employment, the bulk of these jobs are within Other Amusement and Recreation Industries (2,022 jobs), which includes Golf Courses, Fitness and Recreational Sports Centers, Skiing Facilities, Bowling Centers, and more; Gambling Industries (869 jobs), Promoters of Performing Arts, Sports, and Similar Events (104 jobs), Performing Arts Companies (56 jobs), and Amusement Parks and Arcades (49 jobs).
| NAICS Code | Industry Title | Number of Firms | Number of Jobs | Avg. Annual Wage | Q2 2019 – Q2 2020 Job Change | Q2 2020 – Q2 2021 Job Change | ||
|---|---|---|---|---|---|---|---|---|
| Numeric | Percent | Numeric | Percent | |||||
| 0 | Total, All Industries | 17,924 | 220,139 | $46,020 | -25,269 | -11.1% | +18,634 | +9.2% |
| 44 | Retail Trade | 2,357 | 27,389 | $30,992 | -2,366 | -8.4% | +1,578 | +6.1% |
| 71 | Arts, Entertainment, and Recreation | 415 | 3,299 | $19,968 | -1,669 | -43.6% | +1,142 | +52.9% |
| 711 | Performing Arts, Spectator Sports, and Related Industries | 73 | 198 | $17,368 | -136 | -48.9% | +56 | +39.4% |
| 712 | Museums, Historical Sites, and Similar Institution | 45 | 159 | $24,388 | -46 | -26.7% | +33 | +26.2% |
| 713 | Amusement, Gambling, and Recreation | 297 | 2,941 | $19,916 | -1,486 | -44.0% | +1,052 | +55.7% |
| 72 | Accommodation and Food Services | 1,605 | 20,860 | $18,928 | -8,973 | -39.0% | +6,803 | +48.4% |
| 721 | Accommodation | 424 | 5,989 | $22,516 | -3,405 | -48.2% | +2,327 | +63.5% |
| 722 | Food Services and Drinking Places | 1,181 | 14,871 | $17,472 | -5,567 | -34.9% | +4,476 | +43.1% |
| Source: DEED Quarterly Census of Employment and Wages | ||||||||
Although more for residents than for tourists, Retail Trade also makes up a large and supporting part of tourism in Northwest Minnesota. As of the second quarter of 2021, this major industry sector had 2,357 establishments supplying 27,389 covered jobs. Broken down, specific industries with significant employment in Retail Trade in the region include General Merchandise Stores, Food and Beverage Stores, Gasoline Stations, Motor Vehicle and Parts Dealers, and Building Material and Garden Equipment and Supplies Dealers. Retail Trade also includes Sporting Goods, Hobby, Book, and Music Stores, as well as Clothing and Clothing Accessories Stores. Altogether, Retail Trade also accounts for one in every eight jobs in Northwest Minnesota.
With Leisure and Hospitality and Retail Trade combined, nearly one-quarter (23.4%) of Northwest Minnesota's total jobs are either directly associated with tourism or those that support tourism.
There's no denying that the COVID-19 recession hit Northwest Minnesota's tourism hard. Over the year, between the second quarters of 2019 and 2020, Accommodation and Food Services lost nearly 9,000 jobs. This accounted for over one-third (35.5%) of the region's total employment losses during that period. The 39.0% job decline in Accommodation and Food Services was only outdone by the 43.6% employment loss in Arts, Entertainment, and Recreation, which cut nearly 1,700 jobs. For reference, the region's total employment declined by 11.1% between the second quarters of 2019 and 2020. While Retail Trade in the region weathered the COVID-19 recession better than its Leisure and Hospitality counterpart, it did lose nearly 2,400 jobs during that period (Figure 1).
After experiencing such severe employment losses through the spring and summer months of 2020, Northwest Minnesota's tourism has come back robustly. Accommodation and Food Services has led this charge, gaining over 6,800 jobs between the second quarters of 2020 and 2021. As such, this industry had recovered about 76% of its COVID-related employment losses through the spring and summer months of 2021 and is now back to 90.6% of pre-pandemic employment levels. Arts, Entertainment, and Recreation recovered about 68% of its losses, gaining over 1,140 jobs during that period, but is still at only 86.2% of 2019 job counts. Retail Trade was right behind, recovering about 67% of its losses and gaining nearly 1,580 jobs between the second quarters of 2020 and 2021, but was close to 97.2% of pre-pandemic employment levels.
As Northwest Minnesota's tourism recovers from steep employment losses caused by the COVID-19 recession, they've run into a new challenge: tight labor market conditions. According to DEED's Job Vacancy Survey, employers in the region reported nearly 17,800 job vacancies during the second quarter of 2021. This represented a 46% increase in total vacancies compared to the second quarter of 2020 and is the highest number of vacancies ever recorded in the region. At the same time, unemployment in the region has dropped back down after spikes witnessed during the spring and summer months of 2020. With an average of 11,835 unemployed persons during the second quarter of 2021, the number of unemployed jobseekers per vacancy in Northwest Minnesota has dropped to 0.7. In other words, more vacant jobs exist in Northwest Minnesota than unemployed persons looking to fill them (Figure 2).
Tourism-related industries in Northwest Minnesota also witnessed large spikes in job vacancies during the second quarter of 2021. Both Accommodation and Food Services and Retail Trade hit just under 4,000 vacancies. For Accommodation and Food Services, it was about 1,360 vacancies more than the year before or a 53.8% bump. Meanwhile, job vacancies in Arts, Entertainment, and Recreation increased over the year by 792.5% to 955 vacancies. While tourism-related industries in Northwest Minnesota are seasonal in nature, with large swings in vacancies between summer and winter months, reported vacancies during the second quarter of 2021 represent record or near-record highs (Figure 3).
As demand has returned, there are thousands of jobs available in these industries. Demand is highest for food and beverage serving workers, such as Waiters and Waitresses, Fast Food and Counter Workers, and Bartenders, with more than 1,600 vacancies. That was nearly double the number of vacancies compared to the second quarter of 2020. Likewise, the number of openings for cooks and food preparation workers rose more than 300% over the past year, with nearly 1,250 vacancies for jobs like Restaurant Cooks, Food Prep Workers, and Fast Food Cooks. Hiring activity was also up 300% or more for First-line Supervisors of Food Prep and Serving Workers and for other food prep and serving workers, such as Dishwashers, Cafeteria Attendants, and Hosts and Hostesses.
Employers who are struggling to fill these openings have responded by raising wages – the median wage offer for three of these categories jumped over the past year. Wage offers also climbed quickly for other tourism-related occupations in the region, though most jobs still pay between $12 and $16 per hour. A high percentage of these openings are part-time, especially in food preparation and serving occupations (Table 2).
| SOC Code | SOC Occupational Title | Number of Job Vacancies, Q2 2021 | Percent Increase Q2 2020-Q2 2021 | Median Wage Offer, Q2 2021 | Percent Increase Q2 2020-Q2 2021 | Percent Part-time, Q2 2021 |
|---|---|---|---|---|---|---|
| 35-3000 | Food & beverage serving workers | 1,634 | 86.1% | $12.00 | 9.3% | 65% |
| 41-2000 | Retail sales workers | 1,315 | 24.4% | $12.14 | 1.4% | 61% |
| 35-2000 | Cooks and food preparation workers | 1,247 | 314.3% | $14.11 | 16.0% | 42% |
| 53-3000 | Motor vehicle operators | 711 | 42.8% | $16.31 | -0.2% | 16% |
| 37-2000 | Building cleaning and pest control workers | 680 | -48.0% | $17.02 | 6.6% | 36% |
| 43-4000 | Information and record clerks | 501 | -17.6% | $13.82 | 0.1% | 41% |
| 35-1000 | Supervisors of food preparation and serving workers | 472 | 300.0% | $15.40 | 21.8% | 21% |
| 49-9000 | Other installation, maintenance, and repair workers | 324 | 82.0% | $15.95 | -26.0% | 59% |
| 35-9000 | Other food preparation and serving related workers | 293 | 318.6% | $11.60 | -0.7% | 56% |
| 39-9000 | Recreation and fitness workers | 173 | 147.1% | $13.18 | 17.1% | 36% |
| 37-3000 | Grounds maintenance workers | 123 | 101.6% | $18.54 | 70.1% | 12% |
| 27-2000 | Entertainers and performers and related workers | 88 | 633.3% | $14.30 | 15.2% | 64% |
| 13-1000 | Business operations specialists | 45 | -38.4% | $24.71 | 107.8% | 0% |
| 33-9000 | Other protective service workers | 43 | -37.7% | $13.79 | -1.1% | 61% |
| 39-3000 | Entertainment attendants and related workers | 30 | -67.0% | $11.59 | -3.0% | 83% |
| Source: DEED Job Vacancy Survey | ||||||
Local chambers of commerce and convention and visitors' bureaus in the region reported a strong summer tourism season – it was busy, and travelers had money to spend. However, because of the workforce shortages, one chamber reported receiving some complaints from travelers who were annoyed that some restaurants or other venues were shut down or had reduced hours caused by workforce shortages. People were expecting to be able to go out to eat but found that some restaurants were closed during some time periods because they couldn't find workers.
Many restaurants and hotels are struggling to find workers and are having a hard time adjusting their staffing to meet their needs. Another issue for hotels and convention centers is the on-going loss of conferences, summits, and tournaments and sporting events. Although tourism was good, the loss of conferences has really hurt the industry. Local chambers report that these locations just aren't having as many events as they normally do. Although they are not at normal volume, they are much better off than last year when many events were cancelled. As COVID-19 comes under control, tourism-related industries will continue to expand in importance in Northwest Minnesota.
