Tourism in North Dakota, Minnesota: Spend millions, reap billions
The tourism game, any old industry hand will tell you, isn’t what it used to be. And anyone who poked around Facebook — or any other corner of the internet — as they prepared for Labor Day weekend can say as much, too.
What was once a relatively straightforward selection of travel guides and television spots has been transformed by the advent of the internet’s many, many marketing options: Digital billboards, splintering ad strategies and marketing dollars across social media platforms and niche interests. Josh Duhamel is giving North Dakota a hand, too, lending his voice since 2013 and his chiseled image in more recent years.
And despite the myriad approaches, tourism entities are still balancing the same old low-tech strategies that have brought visitors to the Upper Midwest for decades.
“I’ve been in this job for many years. When I first began, there were a lot of efforts to do television, to get a travel guide,” said John Edman, director of Explore Minnesota, the state’s most visible tourism advertiser and advocate. “Now you have to not only be involved in those types of activities, you have to be involved in social (media). You have to be involved in digital. You have to be involved in experiential. You have to be involved in so many different ways than just one.”
But the campaigns to bring more visitors to the Upper Midwest never stop. Both North Dakota and Minnesota spend millions of dollars to buoy tourism and by many measures they’re succeeding — though they often must grapple with economic forces outside their control.
Explore Minnesota officials said their funding is at about $14.2 million for the 2019 fiscal year (not counting grants or other special appropriations), and has been roughly at that level since a significant funding hike in the 2014 fiscal year under then-Gov. Mark Dayton.
And the impact of tourism has grown, too. Since 2011, travelers visiting Minnesota have gone from generating $17 billion in business sales to more than $20 billion in 2017, according to a report released earlier this year.
Officials in the state also cite overall “travel volume” dating back to 2011 through 2017 that shows modest growth, starting at 70.4 million people taking trips of 50 miles or more before dipping to 68.8 million and finally reaching up to 73.1 million.
For North Dakota Tourism, the 2019-2021 “total budget” was pegged at $10.4 million, per its 2018 report, which is roughly where it’s hovered for about a decade. Meanwhile, since 2008 taxable sales and purchases in two key sectors — arts, entertainment and recreation as well as accommodation and food service — have grown from $1.23 billion to $1.9 billion in 2019.
That’s not to say there aren’t headwinds. North Dakota has had to contend with falling Canadian border entries. Just tracking “autos,” per data from North Dakota Tourism, there were only about 585,000 such entries in 2018, the lowest that number has been in a decade. The numbers took a dive after 2014, mirroring changes in the exchange value of the Canadian dollar. But state and national park visitation is up significantly over the last decade, according to state statistics, and “major attraction” visitation has ticked upward nearly 9% during the same time period.
North Dakota Tourism is evolving to keep up with changing times — because it has to. As Arik Spencer, president and CEO of the Greater North Dakota Chamber, explains, not only has tourism historically been one of the largest industries in the state, but it’s also an important economic driver for other sectors.
“When it comes to North Dakota in general, having great parks, great attractions, things like that, they tend to make North Dakota a great place to work, but also live and play,” he said. “And that’s important when trying to attract a workforce.”
Sara Otte Coleman is the director of North Dakota's tourism division. One of the latest campaigns to boost visitor traffic, she said, advertises visitor-friendly sunflower farms around the state. It’s an example of a unique, fresh angle for travelers.
“While you may not think of sunflowers as being a traditional tourism attraction, it’s something people are enamored with. It is a symbol of happiness,” she said. “People that live here take sunflower fields for granted. They don’t think about taking a trip to see them, because they see them on their daily commute.
“I think the important thing for people to understand is visitors come to North Dakota for a number of different reasons. They come for events and festivals, they come for outdoors ...” she later added. “They come for those family vacations and getaways, they come for sporting events. We see hockey tournaments and baseball tournaments. Sometimes that’s the hardest thing for people to understand.”
The Duhamel campaign seems designed to push those non-traditional North Dakota activities. Famous for starring in daytime television and, more recently, Hollywood movies, Duhamel is a native of Minot. North Dakota tourism has used him extensively in recent campaigns that have him participating not only in traditional activities — hiking in the Badlands, for instance — but also in what can be called “experiential tourism,” such as hockey and football games.
For the work, Duhamel has a contract through the end of 2019 that pays $365,000.
Charley Johnson, president and CEO of the Fargo-Moorhead Convention and Visitors Bureau, said local tourism is emerging from a “downturn” that coincided with flagging oil and commodity prices within the last several years. He also cites the weak Canadian dollar, which has yet to rebound to its pre-2015 strength.
“The strategy is to get as many people to come to town as we can — so that’s pretty simple. But it gets more complex as you look at different areas,” he said.
He pointed out one recent campaign meant specifically to entice Canadian shoppers, and also noted the strong support — to the tune of 12,000-plus room-nights a year — that local hockey provides hotels.
And despite falling occupancy rates in the Fargo-Moorhead area — dropping from 66% to 55% across the last seven years — Johnson said that’s mostly happened as new hotels have cropped up. The total number of overnight stays is at least what it was before.
Julie Rygg, executive director of the Greater Grand Forks Convention and Visitors Bureau, echoes many of those economic concerns. In Grand Forks, for instance, lodging tax collections — which comprise nearly the entire bureau budget — are down from $1.1 million in 2015 to about $985,000 in 2018. Though hotel occupancy rates are rebounding, Rygg said the average daily cost of a hotel room is lower than it once was, which takes a bite out of tax revenues.
Much like Johnson, Rygg pointed out that Grand Forks is dependent on a mix of those big-picture economic effects, but is heartened by local economic development. There are larger and more vibrant sports organizations and venues than there were 10 years ago, for instance, something that Rygg said is drawing a bigger focus from the bureau.
There’s an industry-wide question of changing travel habits, too. How do the vacations of the future differ from those of the past — and how do vacation habits of baby-boomers differ from those of millennials, many of whom are marrying and having children?
“There is a change in terms of travel behavior, depending on the demographic that you’re looking for. When I was growing up, and I used to do vacations with my family, we used to rent ... a cabin for two weeks at a time,” Edman, of Explore Minnesota, said. “Nowadays, folks, particularly that are younger, are looking for shorter stays. … They’re also, in some cases, willing to spend more on their vacation.”
But when it comes to targeting by demographics, Otte Coleman says North Dakota is interested in the 30- to 54-year-old market, especially professionals who see the state as a chance to get away from work and unwind. There are big differences in how generations travel, but the most salient qualities in a traveler, she pointed out, are the kind that want to spend money in a state “without the huge traffic jams.”
“One of the big appeals of North Dakota is that we aren’t crowded,” she said.