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New survey shows how much hospitality industry was hit by pandemic

Restaurants, hotels, resorts and campgrounds have lost a combined $15 billion in revenue during the last two years, according to a recent survey.

MINNEAPOLIS — A new survey of the Minnesota hospitality industry is giving us another look at the uneven impact the pandemic has had on our restaurants, hotels and resorts across the state.

Overall, the industry continues to face a bleak reality. Restaurants, hotels, resorts and campgrounds have now lost a combined $15 billion in revenue during the last two years. That's the equivalent of 249 days of business.

But the impact has not hit individual sectors, regions or businesses evenly.

"The economic recovery has been very uneven," said Ben Wogsland, Executive Vice President of Hospitality Minnesota.

On the positive side, Wogsland says resorts and campgrounds continue to provide a major bright spot. According to the survey, 96% of Minnesota resorts and campgrounds reported growing, or stable, financial health, while 65% say they've already met or surpassed pre-pandemic revenues.

"It makes sense when you think about how folks here in Minnesota have sought to get outdoors and experience the great outdoors over the last couple of years," Wogsland said.

In some places like Duluth, Wogsland says that activity has carried over to hotels, and though only 30% of hotels statewide report being back to pre-pandemic revenues, there is hope that the retreat of COVID cases and corresponding return of travel, concerts, sporting events and office work, means the critical metro area will bounce back soon.

"St. Paul and Bloomington are starting to come back a little bit better now," Wogsland said. "But we're still seeing Minneapolis and the central business district there with occupancy rates that are 15 points behind the state average."

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Industry averages are being dragged down by restaurants. According to the survey, nearly 50% of restaurant owners believe they won't be back to pre-pandemic revenues until 2023 or later. According Ron Wirtz, regional outreach director for the Minneapolis Federal Reserve, many of them might not make it long enough to see the rebound.

"Roughly 45% of the restaurants said that they couldn't remain solvent for more than 12 months if current conditions hold," Wirtz said. "It's a pretty tough situation that they're in."

The entire hospitality industry is in a tough situation when it comes to hiring, and the survey doesn't indicate that it's changing any time soon. At least 32,000 workers have been lost across hospitality businesses in the last two years, which represents more than 10% of the industry workforce.

 "That's a really huge number, a really significant number," Wogsland said.

Erdahl: "When you see that kind of job loss and you look at the unemployment rate, no matter how you slice it, you've got to be a little concerned about those workers being gone for good."

Wogsland: "Definitely. Thousands and thousands of workers made lateral moves to other industries or other jobs, and so we're really, in some ways, kind of rebuilding the workforce pipeline from scratch."

Erdahl: "Taking all of this into account, how critical are the next few months?"

Wirtz: "Throughout this pandemic, the next few months have always been very important. We keep thinking that we're on the other side of the pandemic — at least in the last year or so when the vaccines have come in — but we've seen delta (variant), we've seen omicron, and the more volatility you heap on this industry, the more on the edges are going to fall, and that's really unfortunate."

Wogsland: "If you love your favorite restaurants and you love our hospitality industry here in Minnesota, when you're comfortable doing it, please come out and support them. We need to help these folks get back on their feet."

In order to address this worker shortage, Wogsland says Hospitality Minnesota is working with the state legislature to try to expand access to hospitality training programs for young people that would help them get started on certifications and other requirements to help address the workforce pipeline issue with the next generation.

RELATED: Minneapolis leaders campaign for local cafes

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