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Published April 26, 2013, 09:08 AM

TOURISM: Ready for the Rush

Officials expect healthy summer tourism season throughout the region

By: Kris Bevill, Prairie Business Magazine

The tourism industry contributes billions of dollars annually to state economies in the northern Plains and is a critical source of tax revenue for the states, particularly in South Dakota where it ranks behind only agriculture in terms of size. The industry has experienced modest but steady growth throughout the region since 2009 and early indicators suggest that this year’s summer season will be another success, drawing more visitors and spending dollars to the area than last year.

“Everything is looking fantastic,” says Wanda Goodman, media and industry relations manager for the South Dakota Department of Tourism.

A report from IHS Global Insight found that tourism in South Dakota had a nearly $2 billion direct impact on the state’s economy last year, up 5 percent from the previous year, and generated $291 million in state and local tax revenue. Based on information gathered by the tourism department throughout the year, Goodman expects the industry’s impact on the state will be even greater this year. In February, which Goodman says is the month most people begin making summer travel plans, information requests and taxable sales were up compared to February 2012, indicating increased interest from potential summer visitors. “Looking at national indicators, too, numbers are looking good,” she says. “Certainly, there are standard concerns, such as gas prices, that we continue to watch. But as long as they stay stable and don’t go too high, I think we’re looking at a good season.”

Mount Rushmore and the state’s other national parks, including Badlands National Park, Jewel Cave National Monument, Minuteman Missile National Historic Site, Missouri National Recreation River and Wind Cave National Park, are obvious tourist draws for South Dakota, tallying close to 3.8 million visitors in 2011 and contributing $160 million in economic impact, according to the National Park Service. “We attract visitors from across the U.S. and around the world who come here to experience these parks and then spend time and money enjoying the services provided by our neighboring communities and getting to know all that this state has to offer,” Mount Rushmore Superintendent Cheryl Schreier says.

The state tourism department intends to continue marketing Mount Rushmore’s appeal this year by taking the department’s Mount Rushmore mascots on a bus tour to a dozen Midwest cities. “People love them,” Goodman says. “That will raise some awareness at the start of the season.”

While the state does attract a fair share of international tourists, Goodman says the bulk of South Dakota’s tourist traffic originates in Minnesota and Wisconsin. The department will continue doing most of its marketing in neighboring states this year, but Goodman says it’s also receiving good results from several newer markets, including Kansas City, Mo.; Des Moines, Iowa, and Chicago.

Additionally, South Dakota legislators approved funding this year for several projects that are expected to positively impact the industry. Among them is the first new state park in South Dakota since 1972 — the 615-acre Good Earth State Park at Blood Run, located southeast of Sioux Falls. Blood Run, a known Native American trading and ceremonial center, has been a National Historic Landmark since 1970 and is considered the most significant Oneota cultural site in the Midwest. Goodman says the park will help the tourism department connect Native American tourism stops located throughout the eastern part of the state, which could contribute to an expansion of tribal tourism as a niche segment of the state’s industry.

“Tribal tourism is an area that continues to gain interest, especially with our international audience, but even with some of our neighboring states,” she says. The tourism department, led by tourism secretary Jim Hagen, is organizing listening sessions with the state’s tribes to gauge their levels of interest in promoting tribal tourism. “We need to take our cues from each tribe,” Goodman says. “Not all tribes are going to want to do the same thing with tourism. Some may not want to promote tourism at all. We need to find out what it is that we can help with.”

Adventure tourism is another segment the department is focused on expanding within the state. Goodman says there are a number of adventure businesses already, such as hiking and bike trail guiding companies, but she believes there is room to grow and promote the segment further.

The South Dakota tourism department offers several cooperative marketing campaigns to assist businesses and communities in promoting themselves. Among them is the Matching Dollar Challenge program, which provides matching grants to help businesses execute marketing plans. The department also collaborates with local convention and visitors bureaus to support their marketing efforts.

North Dakota

Tourism is the third-largest industry in North Dakota, after agriculture and energy. In 2011, the industry drew about 17 million visitors to the state, generating $4.8 billion in spending, according to estimates compiled by North Dakota State University. Year-end statistics for 2012 show continued growth in the industry and Sara Otte Coleman, director of North Dakota Tourism, says several factors contribute to another optimistic outlook for this year’s travel season. Forty-two new hotels have been built in North Dakota since 2011, adding 3,500 rooms. An additional 39 properties, accounting for approximately 3,700 new rooms, are expected to be added this year. “Additionally, we have more airlines flying in and more seats available,” she says. “There are several new lodges, venue additions and attractions opening as well.”

North Dakota focuses its tourism marketing campaigns on neighboring states and bordering Canadian provinces. Otte Coleman says the main reason people travel to North Dakota is to participate in outdoor activities and the state could use more outdoor recreation providers to meet the needs and expectations of travelers. “This includes a variety of services from full-service resorts, guest ranches, active farm stays and guided adventures,” she says. “We also do not have a lot of businesses offering outdoor sports rentals.”

North Dakota offers several grant programs to assist new and existing tourism-related businesses with their ventures, including matching grants of up to $25,000 that are intended to serve as the final piece of funding to allow new or expanded businesses to open to the public. In 2011, the legislature created the Tourism Infrastructure Grant Program, which provided $750,000 for five projects selected for their demonstrated ability to attract and retain visitors. That program’s future is currently uncertain, however, as it requires the legislature to appropriate additional funds this session.

North Dakota’s most well-known attraction, Theodore Roosevelt National Park, welcomed nearly 650,000 visitors last year, the most since 1982. Eileen Andes, park spokeswoman, says another busy summer season is expected this year. The park is working to establish an astronomy program and debuted several events last year, including full-moon hikes and astronomy events. Those events will continue this season, along with an inaugural astronomy festival to be held Sept. 27-29 in Medora. “We’re working with Medora [Area Convention and Visitors Bureau] and the city of Medora on that, as well as the Theodore Roosevelt Nature and History Association, which is our cooperating association,” Andes says.

Oil patch activity has played a role in increased visitation to the park and will likely continue to impact visitation numbers this year, assisted by improved accommodation availability at nearby hotels. “There are a lot of folks moving into the area with their families and children, and national parks are always great for family activities,” Andes says. “Last year and some of the year before, it was hard for visitors to find hotel rooms. Now there are more hotel rooms in the area so things should loosen up a little on that front.”

North Dakota’s state parks have also experienced growth in visitation, racking up nearly 1.2 million visitors last year. In early April, Gordon Weixel, public information officer for the North Dakota Parks and Recreation Department, said reservations were slightly ahead of last year and the number of inquiries received at spring sports shows indicates a strong season is ahead. “People are really excited this year,” he says. “It’s been a long winter and people want to get outside and get camping.”

Minnesota

Increased consumer confidence stemming from a recovering economy, stable Canadian exchange rates and improved community marketing initiatives are all factors in a positive outlook for tourism in northwest Minnesota this year, according to David Bergman, spokesman for Explore Minnesota Tourism. “I think it’s going to look pretty good,” he says.

A survey of Minnesota tourism businesses conducted by the tourism department in January further indicates a positive outlook for the season ahead. Of the businesses responding to the survey, 42 percent say they expect spring/summer occupancy rates to be better than last year, 47 percent expect rates to remain the same and only 10 percent predict a decrease in rates compared to 2012. Similarly, 47 percent of respondents expect revenues to increase this spring/summer compared to last year, while only 11 percent anticipate decreased revenues this year.

Canadian visitation and resort activity are the two most prominent sources of tourism revenue for the northwest region of Minnesota, according to Bergman, but the region is also experiencing growth in athletics travel and community summer events. Tourism is “a significant player” in the region’s economy and is becoming more recognized by residents as an economic driver, which is resulting in improved community marketing efforts, he says. Explore Minnesota Tourism offers a variety of programs to assist businesses and communities in marketing their services and events, including a partnership program which communities can access for up to $4,000 in matching grants to support marketing campaigns. For individual businesses, Bergman recommends utilizing the department’s website — www.exploreminnesota.com — as a marketing tool. The site boasts 3.1 million users annually and allows businesses to list their services for free, with the option to purchase additional advertising.

Attendance at Minnesota’s many state parks has also been on a steady upward trend over the past several years, with the exception of 2011 when a state government shutdown forced parks to close for three weeks of the summer. Last year, nearly 1.6 million people visited the 14 state parks located in the northwest region of Minnesota. Itasca State Park, which encompasses 32,000 acres and has entrances near Park Rapids, Bemidji and Bagley, is by far the most visited state park of the northwest region, drawing more than 500,000 visitors in 2012. The second most-visited park of the region, Lake Carlos State Park, located a few miles north of Alexandria, recorded approximately 162,000 visitors last year.

Amy Barrett, communications project supervisor for the Minnesota Department of Natural Resources parks and trails division, says the department is anticipating a strong year for attendance at Minnesota state parks, which will provide an economic boost to surrounding communities. According to the DNR, visitors to Minnesota state parks return $26.23 to local economies each day. PB

Kris Bevill

Editor, Prairie Business

701-306-8561, kbevill@prairiebizmag.com

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