[Senate Hearing 111-90]
[From the U.S. Government Publishing Office]
S. Hrg. 111-90
THE STATE OF THE TRAVEL AND TOURISM INDUSTRY: THE MINNESOTA PERSPECTIVE
=======================================================================
FIELD HEARING
before the
SUBCOMMITTEE ON COMPETITIVENESS, INNOVATION, AND EXPORT PROMOTION
of the
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
MAY 27, 2009
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
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51-749 WASHINGTON : 2009
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
JOHN D. ROCKEFELLER IV, West Virginia, Chairman
DANIEL K. INOUYE, Hawaii KAY BAILEY HUTCHISON, Texas,
JOHN F. KERRY, Massachusetts Ranking
BYRON L. DORGAN, North Dakota OLYMPIA J. SNOWE, Maine
BARBARA BOXER, California JOHN ENSIGN, Nevada
BILL NELSON, Florida JIM DeMINT, South Carolina
MARIA CANTWELL, Washington JOHN THUNE, South Dakota
FRANK R. LAUTENBERG, New Jersey ROGER F. WICKER, Mississippi
MARK PRYOR, Arkansas JOHNNY ISAKSON, Georgia
CLAIRE McCASKILL, Missouri DAVID VITTER, Louisiana
AMY KLOBUCHAR, Minnesota SAM BROWNBACK, Kansas
TOM UDALL, New Mexico MEL MARTINEZ, Florida
MARK WARNER, Virginia MIKE JOHANNS, Nebraska
MARK BEGICH, Alaska
Ellen L. Doneski, Chief of Staff
James Reid, Deputy Chief of Staff
Bruce H. Andrews, General Counsel
Christine D. Kurth, Republican Staff Director and General Counsel
Paul Nagle, Republican Chief Counsel
------
SUBCOMMITTEE ON COMPETITIVENESS, INNOVATION, AND EXPORT PROMOTION
AMY KLOBUCHAR, Minnesota, Chairman MEL MARTINEZ, Florida, Ranking
JOHN F. KERRY, Massachusetts JOHN ENSIGN, Nevada
BYRON L. DORGAN, North Dakota JIM DeMINT, South Carolina
CLAIRE McCASKILL, Missouri JOHN THUNE, South Dakota
TOM UDALL, New Mexico SAM BROWNBACK, Kansas
MARK WARNER, Virginia MIKE JOHANNS, Nebraska
MARK BEGICH, Alaska
C O N T E N T S
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Page
Hearing held on May 27, 2009..................................... 1
Statement of Senator Klobuchar................................... 1
Witnesses
Joseph A. McInerney, President and CEO, American Hotel & Lodging
Association.................................................... 5
Prepared statement........................................... 7
John F. Edman, Director, Explore Minnesota Tourism............... 8
Prepared statement........................................... 11
David Siegel, Executive Vice President, Minnesota Restaurant,
Lodging and Resort & Campground Associations and President and
CEO, Hospitality Minnesota..................................... 13
Prepared statement........................................... 16
Dr. Ingrid E. Schneider, Professor, Forest Resources and
Director, Tourism Center, University of Minnesota.............. 17
Prepared statement........................................... 20
Mary Somnis, Tourism Marketing Coordinator, Iron Range Resources. 21
Prepared statement........................................... 23
Diane Brostrom, Director, Grand Marais Area Tourism Association.. 25
Prepared statement........................................... 27
Anna Tanski, Director of Sales, Visit Duluth..................... 38
Hon. Don Ness, Mayor of Duluth, Minnesota........................ 39
THE STATE OF THE TRAVEL AND TOURISM INDUSTRY: THE MINNESOTA PERSPECTIVE
----------
WEDNESDAY, MAY 27, 2009
U.S. Senate,
Subcommittee on Competitiveness, Innovation, and
Export Promotion,
Committee on Commerce, Science, and Transportation,
Duluth, MN.
The Subcommittee met, pursuant to notice, at 9:09 a.m. in
The Depot, St. Louis County Heritage and Arts Center, 506 West
Michigan Street, Duluth, Minnesota 55802, Hon. Amy S.
Klobuchar, Chairman of the Subcommittee, presiding.
OPENING STATEMENT OF HON. AMY KLOBUCHAR,
U.S. SENATOR FROM MINNESOTA
Senator Klobuchar. OK, we call this hearing of the Senate
Commerce Committee to order.
I want to welcome everyone. This is actually an official
field hearing of the U.S. Senate Commerce Committee so that the
whole--statements and all of the testimony and questions will
go on the official Senate record.
I wanted to thank all of our witnesses for being here. I
want to acknowledge that Mayor Ness is here and also David
Ross, from the Chamber, is here, as well, so I want to thank
them for being here.
And it's great to be here in Duluth.
I wanted to mention, first of all, who all of our panelists
are. We have, at the end here, Joe McInerney, who is President
and CEO of the American Hotel & Lodging Association, which is
the largest association representing the United States hotel
and lodging industry. He has joined us today from Washington,
D.C. and I want to thank him for coming all the way to Duluth.
And if you question Duluth's value for tourism, I suggest that
you look at this picture, today in the paper, of one of the
biggest trouts ever caught.
[Laughter.]
Senator Klobuchar. There we are--on Lake Superior, so you
can bring that back to the association.
Mr. McInerney. Thank you.
Senator Klobuchar. We'll give that to them.
[Laughter.]
Senator Klobuchar. We also have with us John Edman, who's
the Director of Explore Minnesota Tourism, which is the office
in the State of Minnesota that promotes tourism. And Explore
Minnesota has recently launched an advertising campaign, which
I know a lot of people have seen, because they've mentioned it
to me, where the voice in the commercial states, ``There's no
substitute for a great Minnesota vacation.''
We also have with us--and I'm going a little out of order
here--Dr. Ingrid Schneider, who is the Director of the
University of Minnesota's Tourism Center. And the University of
Minnesota's Tourism Center educates students entering
Minnesota's tourism and hospitality industry, and also conducts
research for the Minnesota tourism industry.
Mary Somnis is the Tourism Marketing Coordinator for the
Iron Range Resources, a State of Minnesota economic development
agency. We're glad to have her here.
And then, we also have Diane Brostrom, who's from the Grand
Marais Area Tourism Association. And I love their website,
another thing for you to take back, Joe, to Washington. It
says, talking about the Grand Marais area and the North Shore,
their website said, ``It's safe to say it's like nowhere else
on the planet, except for maybe somewhere in New England, but
they have funny accents.''
[Laughter.]
Senator Klobuchar. So, that's pretty good.
And then we have here, right to my left, David Siegel, who
is the President and CEO for Hospitality Minnesota, which is
the association that represents Minnesota's restaurants,
lodges, and campgrounds.
So, we are going to have a good group to talk about this
important issue today.
I first wanted to just say a few words about this hearing
and why this is so important to me. Duluth is a site of many
family trips for our family. My dad and I bicycled up here many
times. We--my daughter, I've taken her to the aquarium several
times. And, of course, our family has gone skiing, even just
last winter, and done a lot of things up on the North Shore, in
the Duluth area, and, of course, on the Iron Range, where all
my relatives live. And if I didn't say that, that would be a
problem.
And, in fact, we're going to spend 4th of July week up
here, and do the Iron Range parades. There are about 1,000
parades in Minnesota, but if I miss the Iron Range parades
every year, they remind me of that.
I also love Duluth because whenever my Senate colleagues
from California are talking about how beautiful San Francisco
is on the ocean, I can always respond by simply saying, ``San
Francisco is nice, but it is simply the Duluth of the West
Coast.''
[Laughter.]
Senator Klobuchar. Today's event, as I mentioned, is an
official hearing. It is the Senate Subcommittee on
Competitiveness, Innovation, and Export Promotion. I chair that
Subcommittee, and it has primary jurisdiction over the Commerce
Department, as well as tourism.
And I wanted to mention David Strickland. Is he here
somewhere? Where did he go? He's the head staff person for that
subcommittee and has been very active, not only in this, but in
the great work that we did with the toys and some of the
problems we were having with dangerous toys coming in. David
headed up that, as well, so I'm glad he came out from
Washington. And he helped me when we did a hearing in
Washington called, ``Tourism in Troubled Times,'' which
actually received a lot of attention nationally. Harry Reid
spoke, and a number of the other Senators, about the importance
of keeping our tourism industry strong in troubled economic
times.
Today, with the help of our witnesses, we're going to
discuss both the challenges and the opportunities of the
tourism industry in Minnesota. I think we all know that
Minnesota has an abundance of travel and vacation
opportunities, and I want to make sure that our tourism
continues to be strong and a vital part of our economy, drawing
visitors from across the country and across the world.
As we head into the summer months, families both in
Minnesota and throughout the country are sitting around their
kitchen tables looking at their household budgets and wondering
what kind of vacation, if any, they can take. Well, the tourism
industry is wondering, too.
In our State, Minnesota, tourism is incredibly important.
It's the fifth largest industry in Minnesota, generating $11
billion in annual sales and providing nearly 11 percent of the
State's total private-sector employment. Many Minnesotan
communities have successfully developed tourism's economic
potential, and Duluth is a great example of that.
The community here, as we all know, was hard hit by
recessions in the 1970s and 1980s. I remember this from when we
would come up to see my grandma, how difficult it was. There
was that infamous billboard that used to say, ``Will the last
one out please turn off the lights?'' Well, the lights are
still on in Duluth. And, while Duluth, like every city in the
country, is experiencing difficult times because of this
economic downturn, the lights are still bright here in Duluth.
The port is essential to Duluth's economy, but the city has
also transformed itself into a popular tourist destination,
welcoming nearly 4 million visitors each year, with an annual
economic impact of over $700 million. This building itself is a
symbol of Duluth's transformation as home to the Lake Superior
Railroad Museum, the North Shore Scenic Railroad, the Duluth
Children's Museum, and much more.
Duluth is also the gateway to the Iron Range and the North
Shore, and these areas have also seen substantial growth in
tourism in recent years.
Tourism is also a major part of the United States economy.
One out of eight Americans are employed somewhere in the
tourism industry. And people need to understand, when we talk
about the tourism industry, it is not just about the CEOs and
the people running the hotels and the airlines; it's the people
who make the beds in the hotels, it's the people who make the
dinners in the hotels, it's the cab drivers, it's the florists,
it's everyone associated with the travel industry.
Each year, travel and tourism contribute approximately $1.3
trillion to the American economy, and the travel economy
contributes $115 billion in tax revenue to State, local, and
Federal Governments. But, today in Minnesota and nationally,
the tourism industry is feeling the impact of the economic
downturn. Nearly 200,000 travel-related jobs have disappeared
in this country in 2008, and the U.S. Commerce Department
forecasts the loss of an additional 250,000 jobs in 2009.
Families are cutting back on vacations to save money, and
businesses are cutting back on meetings and events for
employees and customers. And every time a family decides to
forego a vacation, or a business cancels a meeting, there is a
ripple effect in our economy. Fewer airline tickets are sold,
fewer cars are rented, hotels and lodges rent fewer rooms, and
tourist attractions have fewer visitors. These are challenges.
But, even in the midst of these troubled times, as you'll
hear today, there are also opportunities to strengthen the
tourism industry.
First, we should encourage close-to-home trips and make
sure people know that there are affordable deals out there.
This year, because of the economy, many families are rethinking
their vacation plans, and they maybe are going on shorter
trips, but they certainly can get some good deals around
Minnesota.
This could actually be a boost to our tourism; instead of
maybe going to California or Florida, they will stay close to
home. And we also are very happy to welcome people from our
neighboring States, like Wisconsin.
Right now, many States, including Minnesota, are offering
great values. At our Senate hearing in Washington, we heard
from the head of Travelocity, who said that families are
constantly looking for vacations right now, at the right price.
So, it's important that people of Minnesota understand there
are some great deals up here in northern Minnesota. They can
find them on the Web, and we'll hear today about how they can
find out about them.
Second, we must do more to promote the United States as a
destination for international travel. This is especially
important for northern Minnesota on the Canadian border. We
have the Minneapolis-St. Paul Airport, with nonstop flights to
Asia and Europe, and we're home to the world-renowned Mayo
Clinic, and, of course, we have the Mall of America.
In economic terms, international tourism counts as an
export. Instead of shipping our product to a customer overseas,
the customer actually comes here to the United States to spend
their money on goods and services, and that's why it's called
an export.
International visitors in the United States spend an
average of $4,500 every time they come into our country. Last
year, travel and tourism exports accounted for 8 percent of all
United States exports and 26 percent of all U.S. services
exports. Tourism is actually one of the few areas where we have
trade surplus. But, since 9/11, actually we've seen a decline
in our percentage of the tourism market in our country. This
has nothing to do with the current economic recession, because
this was going on before that. We are down 20 percent of
foreign visitors visiting our country, and some of that, as you
well know, on the northern border, is sort of the confusion and
difficulty with some of the visa issues and the passport
issues. And I have already talked to the Secretary of Homeland
Security about this; we need to do everything we can to make
this as understandable and as simple as possible, and, in some
countries, to make it--to make a real effort to get the visas
processed, because it has actually hurt our tourism. And when
you look at $4,000 a year that people might spend in this
country, it makes a big difference.
Byron Dorgan and I are sponsoring the Travel Promotion Act.
It's a bipartisan bill. We actually think it has a good chance
of passing, this year, and it, at no cost to taxpayers in our
country, basically allows a big focus, like they do in other
countries, on promoting our country abroad and bringing in more
tourists to our country.
Finally, we must encourage companies to resume responsible,
productive spending on business and convention travel.
Unfortunately, travel is one of the first things that's cut
when a company's budget is tight; and that's understandable.
What we've seen recently, though, is companies cutting out
travel simply because of a few bad actors that got a lot of
publicity for taking trips that they shouldn't have taken, and
it's hurt our entire business travel industry. And I've heard
countless stories of businesses and conventions and trade
conventions being canceled, and actually people having to spend
more on the cancellation fee, simply because of the public
outcry against some of the bad actors.
So, the U.S. Travel Association has actually put together
some ethical guidelines for business travel in this country,
and are encouraging people to travel everywhere. And, as you
all know in Duluth, this isn't just about Las Vegas and
Disneyland; there is business travel--smaller business
conventions that come to places like Duluth, that come to the
Twin Cities, including large business conventions down there.
So, we really want to get the business travel back on track, as
well.
Tourism is a powerful engine for job creation and economic
growth, both in Minnesota and nationally. And to revive our
economy, we need to get the engine back on track and move
forward at full steam. That was a little depot analogy for the
end.
[Laughter.]
Senator Klobuchar. OK. So, we're going to get started here.
I also wanted to mention Jake Spano, from our Minnesota office,
who does a wonderful job on all of our business issues, as well
as helping to run the office, along with Zack Rodvold, who is
here with me somewhere. There he is. And he heads up our office
in the Twin Cities. And we've just been on the road, since
Memorial Day, visiting flooded areas that are still slightly
flooded up near Moorhead. So, it's been great to have both of
them with me.
Mr. McInerney, do you want to give us a start, from the
national perspective?
STATEMENT OF JOSEPH A. McINERNEY, PRESIDENT AND CEO, AMERICAN
HOTEL & LODGING ASSOCIATION
Mr. McInerney. Chairman Klobuchar and other distinguished
guests, thank you for the opportunity and privilege to appear
before you on behalf of the American Hotel & Lodging
Association.
I'd like to begin my remarks by thanking the Senator for
your leadership in calling these series of hearings on our
industry's behalf, and for your recent vote for the 2009 Travel
Promotion Act. Your leadership on this issue is essential to
making our voices heard in Minnesota and nationwide and in
passing this long-awaited legislation that I will discuss a
little bit later.
We have been the main point of contact for our nearly
12,000 members, and have seen and heard their individual
stories of how the recession has been hurting their businesses.
Therefore, today I'd like to address the topic of the business-
related travel, including travel for meetings, conferences,
events, and incentive performance programs.
Business travel creates 2.4 million American jobs, $240
billion in spending, and $39 billion in tax revenue, and the
trickle-down effect of the enterprise and local communities is
more impactful because it touches every part of the community.
The business travel segment of our industry has been the
source of undeserved and crippling attacks in recent months.
Critics have mislabeled many meetings and events as unnecessary
and frivolous, causing companies that receive Federal
Government funding, plus many that have not, to cancel meetings
and travel activities. An environment--this environment has
created an America where legitimate business travel is being
questioned and canceled. This translates into the additional
loss of jobs, taxes, and travel-related revenues for the
industry, and is already hard-hitting from the general economic
recession.
Business travel is not an operational luxury or perk of
well-paid executives. Meetings mean business to the American
economy. There is no substitute for the face-to-face, hand-to-
hand, and heart-to-heart results of a business meeting.
As an industry, we have lost, as the Senator has said,
nearly 200,000 related jobs in 2008, and an additional 247,000
will be cut this year, according to the U.S. Department of
Labor. Those who are losing their jobs represent the hard-
working faces of American bellmen, the room attendants, the
banquet service, cooks, and middle management. And with so much
at stake, we seek your support on three key issues:
First, we are asking all Members of Congress and Federal
policymakers to change the rhetoric that labels business
travel, meetings, and incentive travel as frivolous and
unnecessary.
Second, we ask your support for a unified set of meeting
standards for companies receiving emergency government
assistance and funds that have been developed by hotels,
travel, and meeting and incentive industries. These guidelines
were submitted to the Treasury Department in February as a
policy for companies to guide them in organizing justifiable
meetings, events, and incentives. We appreciate if you would
contact the people at the Treasury in asking them to pass these
best practices on to the TARP recipients.
With business travel as an essential element to our
livelihood, leisure travel is also a key to the economic
component. In general, the economy is looking up for the
average American, and many of the industries have been busy
making travel affordable for those who believe it is their
right, not a luxury, to travel. The truth is that, with the
multitude of value-added promotions at hotels, reduced prices
of airlines, and reasonable prices at the gas pump, it's a
great time for travelers to see the United States and enjoy
their vacation in a cost-effective way.
Last, we'd like to ask for your continued support of the
bill dedicated to reviving America's travel industry in both
the leisure and the business sectors, the Travel Promotion Act.
We're thrilled that this legislation was passed by the Senate
Committee on Commerce recently. We would like to acknowledge
that it wouldn't have passed its first steps without your
important leadership support. The goal of this bill is to
increase the number of potential international visitors to the
United States which spend, as the Senator said, $4,500 per
person per trip. We fully support this pending legislation as a
fundamental strategy to create jobs in travel, tourism, and
hospitality. It will make America more competitive in the
global travel market and grow the Nation's inbound travel.
As the country starts to recover from the deep recession,
our government needs to seize every opportunity for growth and
economic stimulation. Today, we ask for your continued support
in making that happen.
Thank you, Chairman, for your leadership and engagement in
these important issues.
[The prepared statement of Mr. McInerney follows:]
Prepared Statement of Joseph A. McInerney, President and CEO,
American Hotel & Lodging Association
Chairman Klobuchar and other distinguished guests: Thank you for
the opportunity and privilege to appear before you on behalf of the
American Hotel & Lodging Association, the only national organization
dedicated to serving the interests of hoteliers on Capitol Hill. I
would like to begin my remarks by thanking Senator Klobuchar for your
leadership in calling these series of hearings on our industry's
behalf, and for your recent vote for the 2009 Travel Promotion Act.
Your leadership on this issue is essential in making our voices heard
in Minnesota and nationwide, and in passing this long-awaited
legislation that I will discuss a little later on.
For nearly a century, the American Hotel & Lodging Association is
the sole national association representing all sectors of the lodging
industry, including individual hotel property members, hotel companies,
student and faculty members, and industry suppliers. We are
headquartered in Washington, D.C., and provide our members with
national advocacy on Capitol Hill, public relations and image
management, education, research and information, and other value-added
services to provide bottom line savings and ensure a positive business
climate for the lodging industry. In addition, we are partnered with 43
state associations to provide local representation to our members.
Based on our lobbying efforts, we have been the main point of
contact for our nearly 12,000 members, and have heard their individual
stories of how the recession has been hurting their business.
Therefore, today I would like to address the topic of business related
travel, including travel for meetings, conferences, events, and
performance incentives. Business travel creates 2.4 million American
jobs, $240 billion in spending and $39 billion in tax revenues. And the
trickle down effect of this enterprise in local communities is even
more impactful. Here in Minnesota in 2007, travel spending totals $10.3
billion and travel tax receipts are $3.0 billion. Approximately 140,400
Minnesotans are employed by the state's hospitality industry, with a
payroll of $4.1 billion.
Again on the national level, the business travel segment of our
industry has been the source of undeserved and crippling attacks in
recent months. Critics have mislabeled many meetings and events as
unnecessary and frivolous, causing companies that have received Federal
Government support--plus many more that have not--to cancel business
travel activities. An environment has been created in America where
legitimate business travel is being questioned and canceled. This
translates into additional loss of jobs, taxes, and travel-related
revenues for an industry that is already hard-hit from the general
economic recession.
Business travel is not an optional luxury or a perk of well-paid
executives. Meetings mean business to the American economy. There is no
substitute for the face-to-face, hand-to-hand, and heart-to-heart
results of business meetings. They are a strategic tool for training,
education, sales, customer interface, new product development, and
motivating performance. All of these are vital in rebuilding America's
economy and creating new jobs that we so badly need at this time.
But the trend is ominous. According to estimates by Smith Travel
Research and the U.S. Travel Association, meetings, events and
incentive cancellations in January and February of 2009 resulted in
more than $1.9 billion in lost travel spending and cost nearly 20,000
America jobs. Nearly 200,000 travel-related jobs were lost in 2008 and
an additional 247,000 will be cut this year, according to data compiled
by the U.S. Department of Labor. Those who are losing their jobs
represent the hard working faces of America: bellmen, room attendants,
banquet servers, cooks, and middle management.
With so much at stake, we seek your support on three key fronts.
First, we are asking all Members of Congress and Federal policymakers
to change the rhetoric that labels business travel, meetings and
incentive travel as frivolous and unnecessary. The unintended
consequence of this mischaracterization is job loss, lost tax revenues
and further stress on this important industry.
Second, we ask your support for a unified set of meeting standards
for companies receiving emergency government assistance funds that have
been developed by the hotel, travel, meeting and incentive industries.
These guidelines were submitted to the Treasury Department in February
as a policy for these companies to guide them in organizing justifiable
meetings, events and incentive travel. They also represent a common
sense approach that would apply to any business. They serve as a
standard of ``best practices'' for corporations to conduct meetings,
incentives and events with complete transparency and accountability.
With business travel an essential element to our livelihood,
leisure travel is also a key economic component. In general terms, the
economy is looking up for the average American, and many in the
industry have been busy making travel affordable for those who believe
it is their right--not a luxury--to travel. The truth is that with the
multitude of value-added promotions at hotels, reduced prices on
airplanes, and reasonable prices at the gas pump, this is a great time
for travelers in the U.S. to enjoy their vacations in a cost-effective
way.
Lastly, we ask for your continued support of the bill dedicated to
reviving America's travel industry in both the leisure and business
sectors--The Travel Promotion Act. We are thrilled that this
legislation was passed by the Senate Committee on Commerce just
recently. We would also like to acknowledge that it wouldn't have
passed its first steps without the important leadership from Senator
Klobuchar.
The goal of this bill is to increase the number of potential
international visitors to the United States, which spend an average of
$4,500 per person, per trip. International travel promotion is part of
the solution of stopping domestic job losses and welcome billions in
new spending by international visitors.
The bipartisan legislation creates a public-private partnership
with a budget of up to $200 million annually to attract international
travelers to the United States by better communicating America's
security policies and competing for visitors. According to an analysis
by Oxford Economics, the program could drive $4 billion annually in new
spending by international travelers to the United States. The Travel
Promotion Act specifies that travel promotion would be paid for by
private sector contributions and a $10 fee on foreign travelers from
visa waiver countries that do not pay $131 for a visa to enter the
United States. The legislation requires no contributions from U.S.
taxpayers.
We fully support this pending legislation as a foundational
strategy to create jobs in travel, tourism and hospitality. It will
make America more competitive in the global travel market and grow the
Nation's inbound travel.
After the past few months filled with negative press portraying our
economically-stimulating industry as a frivolous luxury, more positive
news and a renewed confidence are starting to emerge throughout the
country. As the country starts to recover from this deep recession, our
government needs to seize every opportunity for growth and economic
stimulation. Today, we ask for your continued support in making that
happen.
Thank you again Chairwoman Klobuchar for your leadership and
engagement on these important issues.
Senator Klobuchar. Thank you very much.
Mr. Edman?
STATEMENT OF JOHN F. EDMAN, DIRECTOR,
EXPLORE MINNESOTA TOURISM
Mr. Edman. Thank you, Madam Chair.
On behalf of the entire tourism industry in Minnesota,
Madam Chair, I cannot thank you enough for holding this U.S.
Congressional hearing about travel and tourism. In the 8 years
that I've been Director, and even going beyond that, I cannot
remember a time where a Congressional committee took the time
to devote to the importance of our industry.
Senator Klobuchar. Thank you.
Mr. Edman. So, thank you very much, on behalf of everyone
in Minnesota.
Our industry isn't often in the spotlight. And,
unfortunately, sometimes it takes a disaster to call attention
to the importance that travel and tourism plays in our economy.
In the past few years, we've had a wildfire, floods, bridge
collapses have all brought attention, media attention, to
tourism in Minnesota. And now, unfortunately, a recession has
brought attention to tourism and travel, as well, and the
negative consequences of a downturn in travel, by business and
by consumers. But, I think the point that we're trying to make
is that tourism means business. It means business here in
Minnesota, in communities all across the State, whether you're
in the metropolitan area or in Greater Minnesota.
Madam Chair, you mentioned that tourism is an $11-billion
industry in Minnesota, generating about $33 million a day.
Putting some of that into perspective, tourism is comparable to
agriculture, in terms of its importance to the State. We think
of this State as being important for agriculture, in terms of
contributions to gross domestic product; tourism contributes
the same amount. Fifteen percent of all State sales tax in
Minnesota comes from travel and tourism, and 10 percent of all
the employment in Minnesota is from the travel and tourism
industry.
And I could probably spend the entire time today talking
about the wonders of the product that we have in the State, and
I'm going to leave that up to my colleagues, but there's an
estimated 39 million people that travel in Minnesota each year,
and they--their travel not only impacts those direct
businesses, but those other businesses, as well, the indirect
businesses. The car dealerships, the insurance companies, the
grocery stores all depend on a healthy tourism economy, and are
not even counted in our $11-billion figure.
Like other industries, the travel business is beginning to
feel the economic impact of the downturn. In the past 6 months,
both business and leisure travel has declined. We've seen
occupancy at hotels and lodging businesses down since last
summer, and it's not expected to rebound soon. And this has led
to different changes in the way that people are traveling.
People are still traveling, but they're traveling differently,
and they're looking, not necessarily just for deals, but for
value. Those are the things that we're emphasizing--the value
that a vacation offers, and the values of reconnecting with
family and friends.
We just did a survey of about 315 lodging properties
throughout Minnesota, and about half of the businesses expect
business this summer to continue at normal levels, with 32
percent anticipating occupancy to match last year, and 21
percent exceeding. But, on the other hand, just about half
expect occupancy to drop. And so, this somewhat more troubling
outlook does impact consumers that are frazzled and they're
looking to take a break.
Madam Chair, you mentioned our campaign, and I won't go
into the details of that, but we're looking at putting together
a campaign right now, that there is no substitute for a great
Minnesota vacation. People want to get away, and we have the
great product here to provide that.
In addition to our leisure marketing, we're also focusing
now on the meetings and conventions market. This is something
that, as State tourism agencies, we had not been involved in,
in any great degree in the past, but now communities throughout
Minnesota are trying to work together to say, ``We need to keep
meetings strong.'' It's good for business, and it's good for
the State. And so, we're launching a PR campaign on that now,
and doing some additional marketing, as well.
On the Federal level, there are just a couple of things I
want to touch on, legislation that could significantly impact
Minnesota. Obviously, Canada is an important international
travel market to Minnesota, and we have to, of course, maintain
border security, but also the free flow of travel across our
borders, and that's vitally important for a State like
Minnesota.
The U.S. also needs to promote itself as a travel
destination. Other countries throughout the world have a
national promotion organization and effort; we do not, in the
United States. We are so proud that you're one of the leaders
in that effort to get that going.
The travel industry also hires many employees from other
countries. Comprehensive immigration reform could help ensure
an adequate legal workforce for our industry. Changes in visa
processing in the guest worker program to facilitate the hiring
of non-U.S. labor would also be beneficial.
And then, we also recently did some 20-20 visioning
processes, and what our tourism industry said is that
transportation infrastructure is also essential for a thriving
travel industry. We need to maintain our Nation's bridges and
highways, invest in aviation infrastructure, including
modernized air traffic control, runways, air service, et
cetera. These are issues that normally are sometimes thought of
outside the leisure and hospitality industry, but they're
critical to maintaining a healthy industry.
And finally, we need help--Federal help to protect our
natural resources. In Minnesota, our woods and our waters are
one of the main draws of why people travel here. And it's
critical that we do all we can to protect our natural
environment, to ensure that these resources are here for
Minnesota and for visitors to enjoy in the future.
So, in conclusion, Madam Chair, the tourism industry is a
key sector of both our State and national economies. Here in
Minnesota, every corner of the State benefits, and it takes
actions on all levels, from the community level to State level
to the Congressional level, to keep our travel industry
thriving.
Thank you very much, Madam Chair, for giving me this
opportunity to talk about something I'm very passionate about,
travel and tourism in Minnesota.
Thank you.
[The prepared statement of Mr. Edman follows:]
Prepared Statement of John F. Edman, Director, Explore Minnesota
Tourism
I am the Director of Explore Minnesota Tourism, the tourism
promotion office of the State of Minnesota. I appreciate the
opportunity to discuss the importance of the tourism industry in
Minnesota and the areas in which the Federal Government can help states
stay competitive in this important area of commerce.
Our industry isn't often in the spotlight. And unfortunately,
sometimes it takes a disaster to call attention to the important role
tourism plays in the economy. In the past few years, a wildfire, floods
and bridge collapse have all brought media attention to tourism in
Minnesota. And now, unfortunately, a recession has brought attention to
tourism and travel, and the negative consequences of a downturn in
travel by businesses and consumers.
Tourism means business. In communities across Minnesota, the
dollars that travelers spend at a wide variety of businesses contribute
significantly to their bottom line. In fact, tourism is comparable to
agriculture in its contributions to the gross state product.
Travel and tourism generates $11 billion annually for the Minnesota
economy, with travelers spending an average of $33 million a day in the
state. It also generates almost $680 million in sales tax revenue,
supporting programs that benefit all state residents. The leisure and
hospitality industry accounts for 247,800 jobs across the state, almost
11 percent of private sector employment, with $3.9 billion in wages.
Virtually every county across the state feels the positive economic
impact of tourism.
Northern Minnesota, with its thousands of lakes, draws visitors for
fishing, golfing and other outdoor recreation, resort stays, incredible
scenery, and a wide array of intriguing museums and attractions,
including the port of Duluth. This area, including the northeast,
central and northwest regions of the state, benefits from $2.2 billion
in gross travel and tourism sales.
But Minnesota tourism isn't all ``Up North.'' In fact, the
Minneapolis-St. Paul metropolitan area is the top destination in the
state. Visitors come for its arts and culture, family attractions,
major festivals and events, sports, conventions and shopping,
especially at Mall of America. It all adds up to an economic impact of
$7.3 billion for the metro area.
Southern Minnesota is a travel destination as well, especially for
weekend getaways and day trips. Charming towns, B&Bs, bike trails,
wineries, art galleries, antique shops, historic sites and festivals
are all part of the lure here, with tourism contributing $1.3 billion
to this region.
Many businesses across the state benefit from these tourism
expenditures. Hotels/motels, resorts, campgrounds and B&Bs all rely on
travelers for their business success, but many more ``Main Street''
businesses in our communities receive significant income from visitors:
restaurants, shops, service stations, grocery stores, museums and
theaters, and more. And spending by tourism-related business supports
print shops, ad agencies, food and beverage suppliers, accountants and
lawyers, hospitals, and many other types of businesses.
In addition to the significant economic benefits of the travel
industry, tourism and the visitor spending it generates support local
amenities that residents enjoy in communities across the state:
theaters, museums, restaurants, trails, amusement parks, shops and much
more. In many communities, these amenities could not exist without
income generated by tourism.
An estimated 39 million people travel in Minnesota each year. When
people travel in Minnesota this summer, their trips will benefit not
only them but also the communities and businesses they visit, and
everyone whose job is supported by tourism.
Like other industries, the travel business is feeling the impact of
the economic downturn. In the past 6 months, both business and leisure
travel have declined. Occupancy at hotels and other lodging businesses
has declined significantly since last summer and is not expected to
rebound quickly. However, people are still getting out on day trips,
brief getaways and short vacations. Stable gas prices have consumers
looking at driving trips to nearby destinations.
The difficult economy has led to changes in travel patterns, with
consumers choosing closer-to-home destinations, taking shorter trips,
spending less, making more last-minute reservations and looking for
multi-night discounts and other deals.
In spite of the challenging economy, Minnesota tourism businesses
are hoping to provide relief to stressed-out consumers by offering the
affordable, close-to-home getaways travelers will be looking for this
summer. Pent-up demand among consumers to take long-delayed breaks
could help Minnesota lodging businesses weather this year's financial
storm.
Among the more than 350 lodging and camping businesses across the
state responding to a recent poll by Explore Minnesota Tourism, half
expect business this summer to continue at normal levels, with 32
percent anticipating occupancy to match last summer and 21 percent
expecting an increase in occupancy. On the other hand, just under half
(48 percent) expect occupancy to drop from last summer, and even more,
51 percent, expect their revenues to decline as they lower rates to
attract customers.
The somewhat more positive outlook for the upcoming summer tourism
season is based on hopes that frazzled consumers will be ready for a
break and that Minnesota offers nearby, economical destinations.
Campgrounds have the most optimistic outlook for summer, as some
travelers choose camping as a more affordable vacation option this
summer. Many B & Bs continue to attract guests for quick getaways and
special occasion weekends, such as weddings and anniversaries.
However, more than half of resorts, hotels and motels expect a
decline in business this summer over last. Hotels and motels, in
particular, are feeling the impact of a significant decline in business
and convention travel, and also report fewer international travelers.
Those resorts with a more positive outlook cite repeat customers
returning from previous years, stable gas prices, family reunions, and
their own marketing efforts as reasons to be hopeful for a good summer
season.
The majority of poll respondents, about 60 percent, rated their
business' financial health as ``stable, but positive'' or ``growing,''
although a significant number also reported declining financial health.
Most businesses responding to the poll think that the Minnesota tourism
economy will not begin to recover until next year.
Tourism marketing this year is geared toward encouraging consumers
to get out and travel, promoting Minnesota as a nearby destination for
affordable getaways. Explore Minnesota Tourism markets the state of
Minnesota as a travel destination. On the local level, convention and
visitor's bureaus and chambers of commerce promote their own
communities as travel destinations, playing a significant role in
drawing visitors to their cities. These efforts result in significant
payback. For instance, every $1 invested in state tourism marketing
generates $53 in spending by travelers.
Since people will be traveling closer to home this year, Explore
Minnesota Tourism is focusing its advertising in Minnesota and nearby
markets in neighboring states and provinces. Recognizing that consumers
have had a stressful year and that there may be a pent-up demand for
getting away after months of reduced travel, the ads remind people that
``There's no substitute for a great Minnesota vacation.'' The current
Explore Minnesota ad campaign includes television, online media and
travel-related websites, magazines, consumer recommendations, and the
``I'd Rather Be on Vacation'' Sweepstakes.
Beginning this spring, Explore Minnesota Tourism has teamed up with
the Department of Natural Resources (DNR) to promote outdoor recreation
and visits to state parks, with ads running now on metro area radio
stations. With more travelers looking for affordable, close-to-home
getaways, it's the perfect time to remind them to `go outside and play'
in Minnesota's backyard, at our amazing parks and trails.
In addition to promoting leisure travel, Explore Minnesota Tourism
is partnering with several convention and visitors bureaus to remind
corporations that holding meetings is good for business. Business and
convention travel has dropped significantly, due to business spending
cutbacks and negative publicity about some types of business travel.
This has hurt hotels, motels, convention centers and resorts with
conference facilities, and this new promotion was planned to address
this area of travel business. The promotion includes a new website
promoting meeting and convention travel, providing information about
Minnesota venues to meeting planners. This information is at
meetinminnesota.com.
Leisure travel is a major and expanding area of worldwide commerce.
As countries such as China grow their economies, the pool of
international travelers will grow. The U.S. needs to stay competitive
to attract these international travelers and the revenue they bring to
our country and our state.
On the Federal level, there are several areas where action on
policies, legislation and funding could significantly enable the
tourism industry to thrive in Minnesota and other states.
Canada is Minnesota's largest international travel market. In 2007,
Canada generated approximately 2.5 million person-visits to Minnesota,
with Canadian visitors spending approximately $278 million. Congress
should ensure that the Departments of State and of Homeland Security
have the capacity to efficiently implement the new requirement that
travelers entering the U.S. from North and South America have a
passport or similar, secure travel document. We need to make sure our
guests can cross our borders with ease, while still ensuring our
national security.
In addition, our country needs to promote itself as a travel
destination by launching an international campaign to encourage travel
to the U.S. All other major destinations in the world have such travel
promotions. This could be accomplished for the U.S. through a public-
private partnership, matching funding from the travel industry with
Federal funds. A visa-waiver program fee could create a lasting,
significant funding source of up to $100 million annually to support an
initiative to attract international visitors to our country.
International visitors take longer trips and spend more than domestic
travelers, and their spending can be a significant contribution to the
U.S. economy. It is critical that the U.S. be competitive, to get a
healthy share of the international leisure travel market.
The tourism and hospitality industry also hires many employees from
other countries. Comprehensive immigration reform could help ensure an
adequate, legal workforce for our industry. Changes in visa processing
and the guest worker program to facilitate the hiring of non-U.S. labor
would also be beneficial.
Adequate funding for our country's transportation infrastructure is
also essential for a thriving travel industry. We need to maintain and
improve our Nation's bridges and highways and invest in our Nation's
aviation infrastructure, including modernized air traffic control,
additional runways, continued air service to secondary markets, and
reforms to improve security screening and greater on-time performance.
Long-distance, high speed rail service also holds great potential to
enhance tourism.
And finally, we need Federal help to protect our natural resources.
In Minnesota, our woods and waters and parks are a major part of our
appeal, both as a place to live and a place to visit. It is critical
that we protect our natural environment to ensure that these resources
are here for Minnesotans and our visitors to enjoy in the future.
In conclusion, the tourism industry is a key sector of both our
state and national economies. Here in Minnesota, virtually every corner
of the state benefits from tourism. It takes actions on all levels,
from the local community to Congress, to keep the travel industry
thriving.
Thank-you for giving me the opportunity to discuss travel and
tourism, a vital interest of importance to this region, the state, and
the Nation as a whole.
Senator Klobuchar. Thank you.
Mr. Siegel?
STATEMENT OF DAVID SIEGEL, EXECUTIVE VICE PRESIDENT, MINNESOTA
RESTAURANT, LODGING AND RESORT &
CAMPGROUND ASSOCIATIONS AND PRESIDENT AND CEO,
HOSPITALITY MINNESOTA
Mr. Siegel. Well, Madam Chair, thank you very much. You
learn as you hear.
Back in 1958, three segments of the hospitality industry in
our State decided it would look--probably work better if they
collaborated in the way that they operated, so the State
Restaurant Association, the State Lodging Association, and the
State Resort Association came together in a collaborative
partnership and formed a management entity to manage that. And
they own that entity. It's called Hospitality Minnesota. And
so, there's Hospitality Minnesota and then three State
associations, trade associations, underneath Hospitality
Minnesota.
So, I serve as the President and CEO of the management
entity, and I serve as the Executive Vice President of the
three trade associations.
It's a pretty unique arrangement around the country, one of
the only States that in the Nation that has this arrangement,
and it's really a reflection of--I think, of Minnesota, of the
idea of partnership and collaboration and working together. So,
I'm here on behalf of those three trade associations and our
members. I want to thank you very much for the opportunity.
I want to address three key issues facing the industry. The
first is developing and attracting a high-quality work force.
The second is the challenge of regulation, fees, licenses,
that, in some cases, can stifle our business and our industry.
And the third is the entrepreneurial spirit of our industry and
the potential for the future.
Ours is not always perceived as an industry providing
excellent career opportunities. Counselors are sometimes loath
to recommend the hospitality industry to students in high
schools, for example. But, the U.S. Department of Labor has
highlighted substantial future need for management personnel in
our industry. So, we not only need line employees, as we call
them in the industry, we also need a substantial number of
management personnel, and that's true in Minnesota, as well.
Ours is certainly an industry that provides an initial
experience, work experience, for almost 50 percent of
Americans. About half of us got our first job in the
hospitality industry and learned the culture of work in the
hospitality industry. And certainly we provide great
opportunity for immigrants. We're--we teach countless new
Americans the culture, we prepare them for work and for great
futures in our country. And ours is certainly an industry that
welcomes those that have mental or physical disabilities. And
we're an industry in which you can advance without a formal
education.
All those things are true. But, we're also an industry that
doesn't get recognized for providing the substantial career
opportunities that exist in the unheralded career path that we
have. You can make pretty good money managing a Marriott Hotel
or managing a McDonald's. And you can certainly be successful
owning your own restaurant or hotel or resort or campground.
And while you can advance without a formal education in our
industry, as this becomes an increasingly complex world and an
increasingly complex industry, the need for education becomes
much more apparent. We've started a scholarship program. We
gave out $30,000 in scholarships, this past year, to nine
students who are pursuing higher education in the hospitality
industry. And we also have a high school curriculum, teaching
1,000 students in restaurant management and lodging management
across the State.
So, I guess one important message that I'd like to impart
is that there are great jobs and excellent career opportunities
in our industry, and we would like to see government agencies
pursue policies and allocate resources that encourage today's
youth to pursue careers in our industry.
Second, I want to focus attention on the challenges that
hospitality business operators face navigating the complex
rules, laws, and regulations that impact our industry. I
brought one--I have it in a briefcase--we do an annual law
review. It's 150 pages of laws and regulations that impact
Minnesota's hospitality businesses. And that's not
comprehensive. There are another 100 pages of food code, and
there are some additional resources that we could certainly
provide. But, our operators are expected to know and understand
all aspects of those laws, regulations. And that's a challenge
for anyone who is in business.
So, I guess, certainly the message that we'd like to share
is that we need to provide--we need to have--certainly, we need
to have regulation, we need to have oversight, but we want to
balance that with the need to have operators' ability to expand
and grow their businesses.
We provide, as was stated, somewhere between 10 and 11
percent of the private-sector jobs in our State, and operators
just want the chance to do better. We just want to employ more
folks to grow our businesses.
Often, our hospitality businesses are the cornerstones of
the community. Think of the Little League team that celebrates
at the Dairy Queen, for example, after the tournament, or think
of the--before the high school dance evenings at family
restaurants, and think of honeymoons on the North Shore and
women's weekends on the Gunflint Trail.
Senator Klobuchar. Or the guy with the fish.
Mr. Siegel. Yes, and the guy with the fish.
[Laughter.]
Mr. Siegel. Think of the family reunions in Brainerd and
the corporate meetings in Minneapolis.
Past president of our Resort and Campground Association
once read a letter at one of our meetings. She had received
this letter from the family of a mother who was dying of
cancer, and the mother's wish was to spend a week at a
Minnesota resort. So, they made that happen. They stayed at the
resort. And the family sent this letter afterward. It was just
a gut-wrenching letter about what that experience had meant to
her and how important it had been to her family to spend that
week, really, shortly before she passed away.
So, finally, I want to recognize the entrepreneurial spirit
of all those in our industry. It takes guts to sell your home,
cash in your investments, maybe get some help from family and
buy a resort or open a small restaurant. One of my members
financed his first hotel by maxing out multiple credit cards.
I'm not recommending it, but it's an option.
[Laughter.]
Mr. Siegel. Credit is tight these days.
These business operators want to succeed so they can
provide a service to their communities and hire and train
workers. They see their employees as family, and they want to
simply provide the maximum benefits and growth opportunities.
The answer is not always to raise prices. A resort operator
I spoke with last week said he's never seen such pressure on
rates. The question at the end of the conversations he's having
with prospective guests are, ``Is that the best that you can
do?'' So, there certainly is pressure on rates, and I think
lawmakers need to understand that raising rates isn't always
the answer, that we have to address costs of business
operations. So, whether it be menu labeling, increased taxes,
Department of Health rules, Department of Labor standards,
sales tax definitions, we would just ask that government
agencies acknowledge the reality of the economic impact of
their activities.
So, in conclusion, the industry provides a wonderful career
path and a wonderful way to make a living, in addition to its
reputation for excellent entry-level opportunities, and we'd
just ask policymakers and agencies to truly understand the
business model and provide balanced regulation and taxation so
that our Minnesota hospitality industry operators can grow,
create jobs, pay more taxes, and continue to be the
cornerstones of their communities.
And we'd like to acknowledge the entrepreneurial spirit of
our operators so that they'll continue to take risks and that
the industry then has a bright future in our State.
So, Madam Chair, thank you again for giving me the
opportunity to highlight those three areas for the tourism
industry in our State.
[The prepared statement of Mr. Siegel follows:]
Prepared Statement of David Siegel, Executive Vice President, Minnesota
Restaurant, Lodging and Resort & Campground Associations and
President and CEO, Hospitality Minnesota
In 1958, three major segments of the hospitality industry in
Minnesota--restaurants, lodging and resorts--considered the benefits of
working collaboratively. Their elected leadership decided it would make
sense to bring these three independent trade associations together in a
cooperative arrangement that would maximize their impact.
The three agreed to retain their unique identities, but to be
managed collectively by a common management company. This is how the
Minnesota Restaurant Association, Minnesota Lodging Association and
Minnesota Resort & Campground Association came together to form their
own management entity, Hospitality Minnesota, which they continue to
own today.
I serve as the Executive Vice President of the three Associations
and President & CEO of Hospitality Minnesota, the management company
they collectively own. It is a privilege and honor to serve this
industry and I am equally pleased to be provided this opportunity to
share a broad perspective drawn from the thousands of hospitality
businesses across our state.
I plan to address three key issues facing our industry. The first
is developing and attracting a high-quality work force. The second is
the challenge of regulation, fees and licenses that in many cases
stifle our industry. The third is the entrepreneurial spirit of our
industry and the potential for the future.
Our industry is not often perceived as providing excellent career
opportunities. Counselors are sometimes loath to recommend a career in
hospitality. But the U.S. Department of Labor has highlighted a
substantial future need for management personnel in our industry.
True, ours is an industry that provides that initial work
experience for nearly 50 percent of America's adult work force--entry
level jobs. We provide jobs for recent immigrants. We teach countless
new Americans our work culture and prepare them for great futures in
our country. Ours is an industry that welcomes those with mental or
physical disabilities. We are an industry in which one can advance even
without a formal education.
But we are also an industry providing a tremendous and unheralded
career path. You can make pretty good money managing a Marriott or a
McDonald's. And you can certainly be successful owning your own hotel,
resort or campground. And while you can advance without a formal
education in the field, as the world becomes increasingly complex,
technology and marketing become ever more sophisticated, it is clear
that education in our industry is the future.
To that end, we have introduced a high school curriculum for 11th
and 12th graders called ProStart for restaurants and Lodging Management
Program for hotels that teaches young people about our industry. We are
presently in 34 high schools throughout the state and are teaching
1,000 students. Our goal is 75 schools and 2,000 students annually.
Further, we are providing scholarships for graduates from this high
school program who go on to pursue higher education in our field. Just
last week, we gave $30,000 in scholarships to students with amazing
career goals.
So if I could impart an important message regarding our industry,
it is simply that the jobs are excellent and the career path is real.
Government agencies would be wise to pursue policies and allocate
resources that encourage today's youth to consider a career in
hospitality.
Secondly, I want to focus attention on the challenges that
hospitality business operators face navigating the complex regulations
and laws that impact our industry. Our Associations produce an annual
law review that is 150 pages long regarding laws and regulations
impacting our industry. That's not even comprehensive. It doesn't
include the Minnesota Food Code, which is another 100 pages or more.
To further complicate matters, hospitality business operators, and
most are truly small businesses, must navigate between Federal, state
and local statutes. While regulation and inspection is necessary and
important, we would urge government to do all in its power to reduce
burdensome regulations and laws.
We need to create an environment in which these small business
owners can grow and provide more jobs to Minnesotans. We provide nearly
11 percent of the private sector jobs in our state. Our operators
simply want the chance to perform even better. We have to understand
that the collective burden of multiple mandates can be stifling.
Recognizing the very real impact of regulation and laws, and developing
a balanced approach to governance is extremely important.
Often, these hospitality businesses are the cornerstones of their
community. Think of the little league celebrations at the local ice
cream store or the before-high-school dance evenings at a family
restaurant. Think of the honeymoons on the North Shore and the womens'
weekends on the Gunflint Trail. Think of the family reunions in
Brainerd and the corporate meetings in Minneapolis.
A past president of the Minnesota Resort & Campground Association
once read a letter she had received from a family with a mother, dying
of cancer, whose wish was to spend a week with her family. The family
spent the week at her resort and shortly thereafter the mother died.
You couldn't read the letter from that mother's family without tearing
up. The week together meant the world to that family. That's what this
industry is all about.
Finally, I want to recognize the entrepreneurial spirit of those in
our industry. It takes guts to sell your home, cash in your
investments, get some help perhaps from a family member and buy a
resort, or open a small restaurant. One of my members financed his
first hotel by maxing out multiple credit cards.
These business operators want to succeed so they can provide a
service to their communities and hire and train workers. They see their
employees as family--and they want to provide maximum benefits and
growth opportunities. That has certainly been difficult in this
economic environment. It would be unrealistic to suggest that
government simply get out of the way. We have always advocated for
health inspections, for example. But hearkening back to the second
point, for entrepreneurs to grow, and to invest more resources,
government must create policies that foster development.
I recently heard from a small restaurant in southern Minnesota that
was debating whether to dig into savings to continue operations or
whether, facing a challenging minimum wage increase, it would be
required to close its doors. The decisions that elected officials at
both the Federal and state level make really do have an impact on
business. If the costs of operation get too great, the business is not
sustainable.
And the answer is not simply to raise prices. A resort operator I
spoke with last week said he's never seen such pressure on rates. The
question at the end of each conversation with a prospective guest is,
``is that the best you can do?'' I hope lawmakers understand that the
resistance to raising rates is real--both on the part of the owner and
his or her guest.
Whether it be menu labeling, increased taxes, department of health
rules, department of labor standards or sales tax definitions, we would
ask that government agencies acknowledge the reality of the economic
impact of their activities.
In conclusion, the hospitality industry provides a wonderful career
path and a tremendous way to make a living, in addition to its
reputation for excellent entry-level opportunities. The industry needs
policymakers and agencies to truly understand its business model and
provide balanced regulation and taxation so that our Minnesota
hospitality operators can grow, create jobs, pay taxes and continue to
be the cornerstones of their communities. Finally, we need to
acknowledge the entrepreneurial spirit of the operators in this
industry and encourage them to continue to take risks so that the
hospitality business in our state has a bright future.
Thank you for giving me the opportunity to discuss the hospitality
industry in our state and reflect on its significance and importance to
our economies and our communities.
Senator Klobuchar. Thank you. I'm learning a lot, too. This
is good.
OK. Dr. Schneider?
STATEMENT OF DR. INGRID E. SCHNEIDER, PROFESSOR,
FOREST RESOURCES AND DIRECTOR, TOURISM CENTER,
UNIVERSITY OF MINNESOTA
Dr. Schneider. Great, thank you so much for the opportunity
to be here.
I'm a professor in the University of Minnesota's Department
of Forest Resources in the College of Food, Agricultural,
Natural Resource Sciences, and director of the University's
Tourism Center within the University of Minnesota Extension. My
statement is from this unique perspective of this role, where
the University creates new knowledge related to tourism and
provides research-based education and engagement for tourism-
dependent communities and businesses.
From Minnesota's iconic attractions to the small towns on
the way to those attractions, tourism has significant impact.
From travelers who wine and dine in Minnesota's thriving
metropolitan areas, to those who paddle, pedal, or putter
through Greater Minnesota, their impact is far-reaching.
Minnesota businesses, communities, and residents are faced
with critical decisions for their future and for our future.
Those decisions demand research-based information and analysis
to sustain successful tourism endeavors and maximize positive
impacts for Minnesota's residents and resources. Those
decisions also demand professionals prepared with integrated
planning, management, and marketing education offered by the
University.
I'd like to expand on the impacts of tourism in our State.
Perhaps the most tangible impacts, as some have noted, are the
impacts to the economy. Minnesota is known for both its
shopping and lake-based opportunities. Beyond those, however,
consider the more subtle and emerging tourism areas that can
lead to both urban and rural revitalization.
To understand the impact of recreational trails that are so
important in Minnesota communities and quality of life,
SAFETEA-LU recreational trail program dollars are supporting a
study to assess the economic impact of trail-related travel in
Minnesota. Off the trail, Minnesota's emerging wine tourism
segment is another example of tourism's sometimes subtle
tourism impact. A 2000 study of Minnesota grape growers
revealed the value of winery tourism alone was 14 million in
Minnesota.
This subset of agricultural tourism is just one way tourism
has contributed----
Senator Klobuchar. Well, that's a new fact.
Dr. Schneider.--to rural revitalization. Fortunately,
Minnesotans recognized the importance----
Senator Klobuchar. We didn't know that we were in Mecca for
wine.
[Laughter.]
Voice.--to the people in California.
Senator Klobuchar. Yes, those are things that you'd better
get out there. And how much money do you think we spend on bait
and worms?
[Laughter.]
Senator Klobuchar. You'd better have the answer, because
I'm going to ask you.
[Laughter.]
Senator Klobuchar. OK, go on.
Dr. Schneider. Fortunately, Minnesotans recognize the
importance of tourism. An annual survey conducted by the
University of Minnesota Tourism Center indicates that more than
nine of ten Minnesotans indicate tourism is important to
Minnesota's economy. Providing decisionmakers with the best
possible information is critical to maximize return on
investment. As tourism is generally revenue-positive,
investments to support relevant information acquisition and
dissemination seem both prudent and powerful.
Beyond economics, tourism both depends on and impacts the
environment. Minnesota is a national leader in sustainable
tourism, as evidenced by our hosting one of the first State
sustainable tourism conferences, innovative monitoring of
sustainable tourism industry practices, and cooperatively
creating environmental marketing opportunities for Minnesota
tourism businesses. The University's Travel Green education
effort will continue to advance those environmental efforts.
To remain competitive in this evolving environment,
Minnesota must be prepared with accurate, timely, and objective
environmental data, as well as educated professionals who think
both critically and holistically.
Finally, tourism impacts individuals in communities. I
think we can all attest to the renewal we experience following
a quick weekend escape or a longer travel opportunity. Travel's
social benefits stimulate society by creating more productive
employees and stronger social bonds.
Social impacts also occur in the communities we visit.
Certainly, the attractions, the restaurants, the aesthetic
qualities of destinations improve a resident's quality of life.
Further, the sense of community pride facilitated by heritage
festivals or a heightened awareness of our history creates a
sense of community many U.S. residents seek and need in these
times.
To address the challenges of destination development and
equitable benefit distribution, inclusive and collaborative
community planning can retain and sustain the qualities that
make the community attractive to both residents and visitors
alike.
In sum, tourism has significant impacts for Minnesota, its
residents, and resources. To better understand, predict, and
subsequently plan for successful and sustainable tourism,
additional information is mandatory.
The information obtained and shared by the University of
Minnesota Tourism Center has had significant impact on
Minnesota communities and businesses, from increased return on
investments to stronger social networks.
The Center makes a difference for Minnesota tourism. As the
world flattens and Minnesota diversifies, the tourism product
must innovate and adjust. Information provided by the
University and its partners informs innovation. Deliberate,
inclusive, and science-based planning can sustain the
communities and economies Minnesota tourism supports.
Continued and enhanced support for such informed planning
and tourism professional education will maximize tourism's
return on investment economically, environmentally, and
socially.
Thank you so much for the opportunity to present this.
[The prepared statement of Dr. Schneider follows:]
Prepared Statement of Dr. Ingrid E. Schneider, Professor, Forest
Resources and Director, Tourism Center, University of Minnesota
I am Ingrid Schneider, Professor in the University of Minnesota's
Department of Forest Resources in the College of Food, Agricultural and
Natural Resource Sciences and Director for the University's Tourism
Center, within the University of Minnesota Extension. My statement is
from the unique perspective of this joint role where the University
creates new knowledge related to tourism and provides research-based
education and engagement for tourism-dependent communities and
businesses. The Tourism Center makes a difference for Minnesota by
providing applied research and targeted education to sustain tourism
businesses and communities. The Department of Forest Resources advances
science and management of forest and related natural resources as well
as prepares professionals to manage these resources upon which
Minnesota depends for much of its tourism.
From Minnesota's iconic attractions to the small towns on the way
to those attractions, tourism has significant impact. It's not only the
tangible dollars that circulate in our economy, but the less tangible ,
readjustment of tourist psyches and contributions to residents' quality
of life, as well as the impacts on our environment. From travelers who
wine and dine in Minnesota's thriving metropolitan areas to those who
paddle, pedal or putter through greater Minnesota, their impact is far-
reaching. As the economic crisis continues, the degree of negative
impact remains uncertain. But make no mistake, Minnesota businesses,
communities and residents are faced with critical decisions for their
future and our future: those decisions demand research-based
information and analysis to sustain successful tourism endeavors and
maximize positive impacts for Minnesota's residents and resources.
Those decisions also demand professionals prepared with the integrated
planning, marketing and management education offered by the University
of Minnesota.
I'd like to expand on the impacts of tourism in our state.
Perhaps the most tangible impacts of tourism are impacts to the
economy. In 2008, tourism contributed more than $11 billion to
Minnesota's economy and employed 247,000 people. Certainly these
numbers are impressive, but to make them more meaningful, we can
consider the economic impact of specific activities or sectors.
Minnesota is known for both its shopping and lake-based opportunities.
Beyond those, however, consider the more subtle and emerging tourism
areas that can lead to both urban and rural-revitalization. For
example, although 8 of 10 Minnesotan's think outdoor recreation is
important, fewer probably recognize its impact as tourism activity. The
economic impact of state parks like those along Lake Superior's north
shore was estimated at $300 million earlier this decade. To further
understand the impact of trails that are so important to Minnesota
communities and quality of life, SAFTEA-LU Recreational Program Trail
dollars are supporting a study to assess the economic impact of trail-
related travel. With these results and through our assistance,
communities can make research-based decisions on infrastructure
development and planning that can simultaneously improve their
attractiveness as a destination and as a choice of residence. Off the
trail, Minnesota's emerging wine tourism segment is another example of
tourism's sometimes subtle economic impact. Minnesota hosts 35 wineries
and the University has facilitated the development of two wine trails,
with another in process. A 2007 study of Minnesota grape growers
revealed the value of winery tourism alone was $14 million. This subset
of agricultural tourism is just one way tourism can and has contributed
to rural revitalization. Fortunately, Minnesotan's recognize the
importance of tourism. An annual survey supported by the Tourism Center
indicates that, for the fourth year in a row, more than 9 of 10
Minnesotan's indicate tourism is important to Minnesota's economy. As a
destination that people primarily drive to, the role of tourism in
Minnesota will remain or increase in importance in the current economic
situation as tourists take shorter, closer to home vacations and
business travelers decide to `meet in the middle' of the U.S. As such,
providing decisionmakers with the best possible information is critical
to maximize return on investment. As tourism is generally revenue
positive, investments to support relevant information acquisition and
dissemination seem both prudent and powerful.
Beyond economics, tourism both depends on and impacts the
environment. As such, the retention and reparation of high quality
environments is essential. Sustainable tourism includes an emphasis on
the environment, as well as the economic and social aspects. Minnesota
is a national leader in sustainable tourism as evidenced by our hosting
one of the first state sustainable tourism conferences, innovative
monitoring of sustainable tourism industry practices, and cooperatively
creating environmental marketing opportunities for Minnesota tourism
businesses. The University's Travel Green education effort will
continue to advance these environmental efforts. Given Minnesota's
great dependency on the environment for tourism, understanding the
impacts of our changing climate on tourism activities will be an
important step moving forward. While opportunities to extend our summer
season can be advantageous, a shortening of winter has significant
implications. To remain competitive in this evolving environment,
Minnesota must be prepared with accurate, timely and objective data as
well as educated professionals who think critically and holistically.
Finally, tourism impacts individuals and communities. I think we
can all attest to the renewal we experience following either a quick
weekend escape or a longer travel opportunity. Like the economic
benefits that stimulate our economy, travel's social benefits stimulate
society by creating more productive employees and stronger social
bonds. Social impacts also occur in the communities we visit. Certainly
the attractions, restaurants and aesthetic qualities of destinations
improve a residents' quality of life. Further, the sense of community
pride facilitated by heritage festivals or heightened awareness of our
history creates a sense of community many U.S. residents seek and need
in these uncertain times. However, challenges such as congestion and
density may emerge as destinations evolve. To address the challenges of
destination development and equitable benefit distribution, inclusive
and collaborative community planning can retain and sustain the
qualities that make the community attractive to both tourists and
residents alike.
In sum, tourism has significant impacts for Minnesota, its
residents and resources. To better understand, predict and subsequently
plan for successful and sustainable tourism, additional information is
mandatory. The information obtained and shared by the University of
Minnesota Tourism Center has had significant impact on Minnesota
communities and businesses: from increased return on investments to
stronger social networks, the Center makes a difference for Minnesota
tourism. As the world flattens and Minnesota diversifies, the tourism
product must innovate and adjust. Information provided by the
University and its partners informs such innovation. Deliberate,
inclusive and science-based planning can sustain the communities and
economies Minnesota tourism supports. Continued and enhanced support
for such informed planning and tourism professional education will
maximize tourism's return on investment economically, environmentally
and socially.
Thank you for the opportunity to present this statement.
Senator Klobuchar. Thank you very much.
Mary?
STATEMENT OF MARY SOMNIS, TOURISM MARKETING COORDINATOR, IRON
RANGE RESOURCES
Ms. Somnis. Thank you for your support and for inviting us
to be here today.
Tourism is essential to the economy of the Arrowhead. A
friend of mine, a native Iron Ranger who moves earth for a
living, put it this way, ``Here we live near these great
Minnesota hills--the Laurentian Divide, the Superior Highlands,
the Sawtooth Mountains. Imagine, if you will, that the economy
is like a hill. At the base, we have solid ledge rock, the
mining industry. Even now, big projects are moving forward
relative to mining and minerals. On top of the ledge are some
really big boulders--industries like manufacturing, healthcare,
education, construction, professional services. And filling in
the space between is smaller rock--hospitality, recreation,
tourism. Our economy is not built on tourism, but tourism is
critical to its strength, as sand is to the hill.'' Interesting
analogy from a person who moves rocks every day. He has no
stake in tourism, but he can see the value of it from his point
of view.
Many believe that tourism provides only low-paying, part-
time, seasonal jobs; they forget the small business owners and
entrepreneurs. Tourism provides second incomes for working
families, full- and part-time jobs for families with children
who need to manage schedules and priorities. Many young people
have been introduced to the workforce with jobs in tourism,
learning life skills that will serve them throughout their own
careers. One of my favorite stories is about the young man who
grew up working as a dock boy at a resort on Lake Vermilion,
and went on to manage the Chicago Hilton. Just one example of
how tourism can provide so much more than a paycheck.
If not for tourism, our communities would not be able to
sustain the number of restaurants, gas stations, grocery
stores, and other retail and service options that we enjoy.
Service-sector employees also support doctors, dentists,
lawyers, and other professionals in the communities.
The economic impact for the Arrowhead indicates that, for
the period from June of 2007 to May of 2008, travelers spent
$1.6 billion in the Arrowhead, supporting 33,500 full-time-
equivalent jobs, producing over $668 million in wages,
salaries, and proprietary income, also resulting in $194
million in State government revenues and $59.8 million in the
local-government revenues. That's just in the Arrowhead.
Overall travel was down last summer, when compared with the
year before. We had very cool and wet weather, so the economy,
the weather, and the gas prices were all factors affecting
travel. And anecdotal information tells us that travel this
past winter was also flat or down. And, as John indicated
earlier, predictions are about even for what is going to happen
this coming season.
For the first time, some resorts are offering peak-season
discounts for the coming summer. Lodging that historically
needed to be reserved months in advance is now available at the
last minute. As is true of everything right now, last-minute
bargains are great for the buyer, not so good for the seller.
On the bright side, campgrounds had great visitation last
summer, and reservations are looking good for this year. Retail
and attractions are reporting that people are around, but
purchasing less. For the most part, people are traveling, but
their spending behavior has changed with the times.
About half of the travel to the Arrowhead comes from the
Twin Cities. We're a rubber-tire destination for the
metropolitan market. The travel trend for shorter vacations
closer to home has, and will likely continue to serve our
region well.
The tourism industry has partnered with Iron Range
Resources for more than 10 years to promote travel to the
Arrowhead. Our tourism budget and the community partners
contribute funds. The Northeast page on the website of our
partner Explore Minnesota is the fulfillment piece to the
campaign. Participating communities are featured prominently on
that website.
This spring, we launched our MinNEcations Campaign to
promote vacations closer to home. MinNEcations is the first
half of ``Minnesota'' and the second half of ``vacations.''
Senator Klobuchar. Oh, I get it. Thank you.
[Laughter.]
Ms. Somnis. ``MinNEcations.''
[Laughter.]
Senator Klobuchar. They'll get that in Washington----
[Laughter.]
Ms. Somnis. We tagged the brand with ``Drive a little and
play a lot.'' The campaign is activity-oriented, focusing on
things that people do when they come here--fishing and lakes,
biking and hiking, wilderness adventure, scenic and wildlife
viewing, golf, motor sports events, arts, and culture. Isn't it
time for a MinNEcation?
We'll see new people traveling to this area for the first
time, exploring Minnesota closer to home. In this group, there
is new potential for long-term economic development. As people
discover this area, they fall in love with it, and they may
move their business here or retire here. Our incredible natural
resources and quality of life attract people who wish to live
and work where they play. Many business and community leaders
in this region are former visitors who have become permanent
residents.
In addition to the marketing campaign, Iron Range Resources
offers a grant program for culture and tourism projects.
Funding is provided to initiatives that stimulate tourism and
enrich communities through artistic, heritage-related, or
recreational activities. Desired outcomes include improved
quality of life and economic return on investment to the
communities.
Most of the Arrowhead, with the exception of Duluth, is a
small-meeting destination. In some communities, we don't even
have convention and visitors bureaus, we have visitor and
tourism bureaus. The majority of our travel is leisure.
However, there are parts of our region where business travel is
doing well right now. Planning and construction of a number of
projects are bringing consultants, researchers, contractors,
and workers to the region. We are optimistic that, as the
economy improves, corporate business will continue to grow. We
have fabulous venues, activities, and services to offer this
market. We must continue to work together at all levels,
nationally, statewide, and locally, in public-private
partnerships, to promote tourism and travel. Once the guests
have arrived, we need to exceed their expectations, provide
them with a quality guest experience and excellent customer
service.
Thank you again for the opportunity to share this with you
today. Enjoy your time, and we'll look forward to when you come
again.
[The prepared statement of Ms. Somnis follows:]
Prepared Statement of Mary Somnis, Tourism Marketing Coordinator,
Iron Range Resources
Thank you, Senator Klobuchar, for your support and for inviting us
here today. I am pleased to talk with you about tourism in northeastern
Minnesota's Arrowhead Country.
Tourism is essential to the economy of the Arrowhead. A friend of
mine, a native Iron Ranger who moves earth for a living, put it this
way:
We live near great Minnesota hills--the Laurentian Divide and the
Superior Highlands, including the Sawtooth Mountains. Imagine that
building an economy is like building a hill.
At the base we have solid ledge rock--the mining industry. Even
now, we have big projects moving forward relative to mining and
minerals.
On top of the ledge are some really big rocks--boulders--industries
such as manufacturing, health care, education, construction,
professional services.
Filling in the space between is smaller rock--industries like
tourism, hospitality and recreation.
Our economy is not built on tourism, but tourism is critical to its
strength--as sand is to the hill. Interesting analogy, from a person
who moves rock every day! He has no stake in tourism, but can see the
value of it from his point of view.
Many believe that tourism provides only low paying, part time and
seasonal jobs. They forget the many small business owners and
entrepreneurs. Tourism provides second incomes for working families;
full and part time jobs for families with children who need to manage
schedules and priorities.
Many young people have been introduced to the workforce with jobs
in tourism, learning life skills that will serve them throughout their
careers. One of my favorite success stories is about a young man who
started working as a dock boy at a resort on Lake Vermilion and grew up
to manage the Chicago Hilton. One of many great stories, showing that
tourism jobs can provide so much more than a pay check.
If not for tourism, our communities would not be able to sustain
the number of restaurants, gas stations, grocery stores and other
retail and service options that we enjoy. Service sector employees also
support doctors, dentists, lawyers and other professionals in
communities.
Economic impact research for the Arrowhead indicates that, for the
period from June 2007-May 2008:
Travelers spend $1.6 billion in the region, supporting
33,500 full time equivalent jobs, producing
$668.4 million in resident income (wages, salaries and
proprietary income),
$194 million in state government revenues, and
$59.8 million in local government revenues.
Overall, travel was down last summer when compared with the summer
of 2007. Spring and early summer of 2008 were very cool and wet in the
Arrowhead. The economy, weather and gas prices were all factors
affecting travel to our region last year. Anecdotal information tells
us that travel this past winter was either flat or down.
Early predictions are about even for whether this coming season
will be up or down from last year.
For the first time, some resorts in the Arrowhead are offering peak
season discounts for the coming summer travel season. Lodging that
historically needed to be reserved months in advance is now available
at the last minute. As is true of everything right now, these last
minute bargains are great for the consumer . . . not so good for the
seller.
On the bright side, campgrounds had great visitation last summer
and reservations are looking good for this year. Retail and attractions
are reporting that people are purchasing less. For the most part,
people are traveling, but their spending behavior has changed with the
times.
About half of the travelers to the Arrowhead come from the Twin
Cities area. We are a ``rubber tire'' destination for the metropolitan
market. The travel trend for shorter vacations closer to home has, and
will likely continue, to serve this region well.
The tourism industry of the Arrowhead region has partnered with
Iron Range Resources for more than 10 years to promote travel to
northeastern Minnesota. Our tourism budget and the community partners
each contribute funds. The northeast page on the Explore Minnesota
website is the fulfillment piece to the campaign. The participating
communities are featured prominently on the website.
This spring we launched our MinNEcations campaign, to promote
vacations closer to home. We've tagged the brand with . . . drive a
little and play a lot! The campaign is activity-oriented, focusing on
the things that people do when they come here: fishing and lakes,
biking and hiking, wilderness adventure, scenic and wildlife viewing,
golf, motorsports, events, arts and culture. Isn't it time for a
MinNEcation?
We will see new people traveling to this area for the first time,
exploring Minnesota closer to home. In this group, there is new
potential for long-term economic development. As people discover this
area, they fall in love with it and may move their business here or
retire here. Our incredible natural resources and quality of life
attract people who wish to live and work where they play. Many business
and community leaders in this region are former visitors who have
become permanent residents.
In addition to the marketing campaign, Iron Range Resources offers
a grant program for Culture and Tourism projects. Funding is provided
to initiatives that stimulate tourism and enrich communities through
artistic, heritage-related or recreational activities. Desired outcomes
include improved quality of life and economic return on investment to
the communities.
Most of the Arrowhead (with the exception of Duluth) is a small
meeting destination. In some communities, we do not even use the name
``Convention and Visitors Bureau'' but rather ``Visitor and Tourism
Bureau.'' The majority of visitation to the region is leisure travel.
However, there are some parts of our region where business travel
is doing well right now. Planning and construction of a number of
projects are bringing consultants, researchers, contractors and workers
to the region. We are optimistic that, as the economy improves
corporate business will continue to grow. We do have fabulous venues,
activities and services to offer this market.
We must continue to work together at all levels--nationally,
statewide and locally--in public/private partnerships to promote
tourism and travel. Once the guests have arrived, we need to exceed
their expectations, provide them with a quality guest experience and
excellent customer service.
Thank you again for the opportunity to be here with you today--
enjoy your time--and come again!
Senator Klobuchar. OK. Fourth of July.
[Laughter.]
Senator Klobuchar. All right.
Diane?
STATEMENT OF DIANE BROSTROM, DIRECTOR,
GRAND MARAIS AREA TOURISM ASSOCIATION
Ms. Brostrom. First, thank you very much for this
opportunity to join today's discussion.
I'm Diane Brostrom, Director for the Grand Marais Area
Tourism Association, a nonprofit whose mission is to increase
the economic benefit to the Grand Marais area through the
promotion of sustainable tourism. This organization was founded
in 2000 and is funded largely through the lodging tax collected
in the Grand Marais area.
As background, I have provided a report written in 2007 by
the Cook County Economic Analysis Council. Sizable report. This
is a thorough analysis of the economy and the impact of
tourism. Although it is 2 years old, this study is the most
exhaustive of its kind, and its statistics and conclusions are
still valid today. In fact, the serious issues it identifies
are all the more pronounced in 2009. Truly, I believe that Cook
County is Minnesota's favorite county, with a destination
downhill ski area, a vibrant----
Senator Klobuchar. I can't comment on that.
[Laughter.]
Ms. Brostrom. I'm not objective.
[Laughter.]
Ms. Brostrom. We have a vibrant arts community, private-
sector nonprofits, such as North House Folk School, the Grand
Marais Art Colony, and the Grand Marais Playhouse, topnotch
restaurants, a variety of lodging, Native American culture, and
protected wilderness and public lands which comprise 90 percent
of our county.
Even with these amazing facets of the jewel we call Cook
County, this past winter was a tough one for tourism, and
difficult--and the difficult countywide trend continues.
Cook County is a one-factory community, and that factory is
tourism. It accounts for 80 percent of the economy, which makes
us the most tourism-dependent county in Minnesota.
In the Greater Grand Marais area, we have 37 lodging
facilities, 23 restaurants and coffeehouses, and 27 specialty
shops and galleries. Nearly all are owned and operated by local
residents, and there are only 1,414 year-round residents in
town, and about 5,000 in Cook County. Tourism R Us.
In general, unfortunately, our wage scale is often low,
with few or no benefits offered. Tourism is highly seasonal, so
many are under- or unemployed for significant portions of the
year. The cost of living is high, and continues to rise nearly
monthly.
People working in tourism are extremely dedicated to their
own businesses, to the local economy, and yes, dedicated to
providing the best experience possible for our visitors.
Given the gorgeous natural beauty of the area, tourism is
understandably weather-dependent. The newly created Cook County
Events and Visitors Bureau is founded on an event-based
strategy intended to create reasons to visit that are not
totally dependent on deep snow or warm sunshine. This entity
represents an unprecedented level of cooperation among tourism
communities that even recently regarded each other as rivals.
But, the ever-rising costs of doing business in the face of a
very nervous public has made bedfellows of us not anticipated
even 5 years ago.
In Grand Marais, my task has been to rebrand this wonderful
harbor village to widen our message and to carry that branding
through our new website, award-winning visitor guide, and in
all our marketing efforts. The Grand Marais Visitor Center now
represents all of Cook County's visitor destinations in order
to be full-service. I interface with Explore Minnesota Tourism
and other tourism-based communities in northern Minnesota to
cooperate in some of our marketing efforts.
The psychological and tangible realities of our recent
economy are daunting, despite all our best efforts. The effects
have spread from tourism to real estate, banking, construction,
grocery stores, and many other second- and third-tier
businesses, resulting in layoffs and closures. Most impacted
are our largest tourism businesses that have the greatest costs
and investments and who also pay the higher annual wages, and
this threatens our local economies even further.
In Grand Marais, and Cook County as a whole, we would
benefit from an infusion of new infrastructure. Although
incredible assets are already in place on the North Shore, we
do not have a countywide transportation system or one
connecting Cook County to Duluth. We do not have affordable
housing for many of our workers. We lack a large venue for
meetings, conventions, or entertainment, which restricts that
tourism niche and keeps our numerous festivals and events on a
small, less cost-effective scale. Local investment for such
infrastructure is simply not available.
The cost of marketing creates difficulties for businesses
to do their own. With fewer visitors and less revenue in
lodging tax, entities such as mine also have less to spend to
do our job for our communities.
In closing, tourism is a powerful force in Cook County. I
would ask for continued funding, both at the State and Federal
level, to fuel the programs that result in its growth, to
support the marketing efforts of Explore Minnesota Tourism, and
to consider seriously the recommendations of Senator Amy
Klobuchar and others who advocate for the growth of tourism.
Thank you again for this opportunity to speak with you, and
I look forward to seeing you in Grand Marais.
[The prepared statement of Ms. Brostrom follows:]
Prepared Statement of Diane Brostrom, Director,
Grand Marais Area Tourism Association
First, thank you for this opportunity to join today's discussion.
My name is Diane Brostrom, and I am the Director for the Grand Marais
Area Tourism Association, a non-profit whose mission is ``to increase
the economic benefit to the Grand Marais area through the promotion of
sustainable tourism''. This organization was founded in 2000 and is
funded largely through the lodging tax collected in the Grand Marais
area.
As background, I have provided the report written in 2007 by the
Cook County Economic Analysis Council.* This is a thorough
analysis of our economy and the impact of tourism. Although now 2 years
old, this study is the most exhaustive of its kind, and its statistics
and conclusions are still valid today. In fact, the issues it
identifies are all the more pronounced in 2009.**
---------------------------------------------------------------------------
\*\ The executive summary of this report is attached.
\**\ The full report is maintained in the Committee's files.
---------------------------------------------------------------------------
Truly, I believe that Cook County is Minnesota's favorite county,
with a destination downhill ski area, a vibrant arts community, private
sector non-profits such as North House Folk School, the Grand Marais
Art Colony and the Grand Marais Playhouse, top-notch restaurants, a
variety of lodging, Native American culture, and protected wilderness
and public lands which comprise 90 percent of the county. Even with
these amazing facets of the jewel we call Cook County, our local
economy is in trouble. Despite all our efforts and good snow, this past
winter was a tough one for tourism, and the difficult countywide trend
continues.
Cook County is a one-factory community, and that factory is
tourism. It accounts for 80 percent of our economy, which makes us the
most tourism-dependent county in Minnesota. In the greater Grand Marais
area, we have thirty-seven lodging facilities, twenty-three restaurants
and coffee houses, and twenty-seven specialty shops and galleries.
Nearly all are owned and operated by local residents--and there are
only 1,414 year round residents in town and about 5,000 in Cook County.
In general, our wage scale is low, with few or no benefits offered.
Tourism is highly seasonal, so many are under or unemployed for
significant portions of the year. The cost of living is high and
increases nearly monthly. People working in tourism are extremely
dedicated to their own businesses, to the local economy, and yes,
dedicated to providing the best experience possible for our visitors.
Given the gorgeous natural beauty of the area, tourism is
understandably weather dependent. The newly created Cook County Events
and Visitors Bureau is founded on an event-based strategy intended to
create reasons to visit that are not totally dependent on deep snow or
warm sunshine. This entity represents an unprecedented level of
cooperation among tourism communities that even recently regarded each
other as rivals. But the ever-rising costs of doing business in the
face of a very nervous public have made bedfellows of us not
anticipated even 5 years ago.
In Grand Marais, my task has been to rebrand this wonderful harbor
village to widen our message, and to carry that branding through our
new website, award-winning visitor guide and in all our marketing
efforts. The Grand Marais Visitor Center now represents all of Cook
County's visitor destinations in order to be full-service. I interface
with Explore Minnesota Tourism and other tourism-based communities in
northern Minnesota to cooperate in some of our marketing efforts.
The psychological and tangible realities of our present economy are
daunting, despite all of our best efforts. The effects have spread from
tourism to real estate, banking, construction, grocery stores and many
other second and third-tier businesses, resulting in layoffs and
closures. Most impacted are our largest tourism businesses that have
the greatest costs and investment, and who also pay higher annual
wages; this threatens the local economy even further.
Grand Marais, and Cook County as a whole, would benefit from an
infusion of new infrastructure. Although incredible assets are already
in place on the North Shore, we do not have a countywide transportation
system, or one connecting Cook County to Duluth. We do not have
affordable housing for many of our workers. We lack a large venue for
meetings, conventions or entertainment, which restricts that tourism
niche, and keeps our numerous festivals and events on the small, less
cost-effective side. Local investment for such infrastructure is simply
not available.
The costs of marketing create difficulties for businesses to do
their own. With fewer visitors and less revenue in lodging tax,
entities such as mine also have less to spend to do our jobs for our
communities.
In closing, tourism is a powerful force in Cook County. I would ask
for continued funding at both the state and Federal level to fuel the
programs that result in its growth, to support the marketing efforts of
Explore Minnesota Tourism, and to consider seriously the
recommendations of Senator Amy Klobuchar and others who advocate for
the growth of tourism. Thank you again for this opportunity to speak
with you, and I look forward to seeing you in Grand Marais.
Economic Analysis of Cook County
Plan to Improve the Economy and Quality of Life for Cook County
Residents
Final Preliminary Report
Executive Summary
Purpose
The Cook County Economic Analysis Council was formed to identify
and analyze some of the critical economic and quality of life issues
facing County residents, to serve as a catalyst to stimulate further
discussion, and to propose possible solutions. Information was gathered
from governmental sources, individual businesses and public forms and
meetings held over the past year.
This Council is a grassroots committee, founded by members whose
businesses total approximately 20 percent of total sales in the County
and employ a similar percentage of the County's work force. The Council
represents an historic cross-County partnership with proportionate
representation from three economic districts in the County (Lutsen/
Tofte/Schroeder, Grand Marais and the Gunflint Trail) to protect,
strengthen and enhance the economic and social well-being of Cook
County residents. Its members are:
Bill Hansen, Sawbill Outfitters
Bruce Kerfoot, Gunflint Lodge
Charles Skinner, Lutsen Mountains Ski Area and Eagle Ridge
Resort
Jan Sivertson, Sivertson Gallery
Scott Harrison, Lutsen Resort
Teresa Sterns, East Bay Suites
Tim Kennedy, Gunflint Realty and Grand Marais City Council
Other participants in the meetings of the Council have included:
Bob Fenwick, Sawtooth Lumber and Cook County Commissioner
Mark Sandbo, Grand Marais Mayor (through December 2006) and
Manager of Aspen Lodge Hotel
Matt Geretschlaeger, Director of Cook County/Grand Marais
Economic Development Authority
Background
Cook County is one of Minnesota's most treasured and stunning
natural recreation areas. From the rugged Sawtooth Mountains, to the
Boundary Waters Canoe Area Wilderness and the shores of the world's
greatest freshwater lake, tourists are drawn to this corner of our
State. It is no wonder that over 80 percent of Cook County's economy is
driven by tourism.
As business leaders and community servants, we are proud guardians
of Cook County as an international tourist destination. We are
concerned, however, that Cook County does not have the financial
resources, professional expertise, or public tourism-oriented
infrastructure to sustain, let alone improve, this tourism economy so
vital to our residents' livelihood and quality of life.
Cook County has some significant private tourism infrastructure:
top notch lodging, retail shops, restaurants and outfitters, a
destination ski area, a vibrant artistic heritage, and strong private
sector non-profits such as North House Folk School and the Grand Marais
Playhouse. Cook County also has some public infrastructure, including a
hospital, art center, recreation trails, and protected wilderness and
public lands encompassing 90 percent of the County. The Council's
research, however, indicates that there are significant areas that need
immediate attention and critical investment.
The Concern
Decades' long declines in logging, fishing and mining have made
Cook County a one-factory community, and that factory is tourism.
Tourism accounts for over 80 percent of the economy, making Cook County
more dependent on tourism, by far, than any other Minnesota county.
Until the late 1990s, tourism continued to grow, propelling growth in
employment and sales.
Due to a lack of resources to invest in relevant public
infrastructure or broaden tourism beyond snow-based recreation
activities during the 7-month low season (mid-October through mid-
June), the economy of Cook County has stagnated and become highly
seasonal. Lodging visitation, the engine of tourism in Cook County, has
not grown since 1999, resulting in parallel stagnation at restaurants,
bars, retail shops, recreation facilities and other businesses. The
total dollars flowing through the economy fall to 35 percent to 55
percent of peak summer sales levels from mid-October through mid-June.
This economic weakness affects the entire County. Businesses are
forced to take out credit lines to survive. Too few year-around
positions with benefits are available, and seasonal unemployment is
high. The County has been unable to attract or retain younger workers
or families, or provide adequate housing, public transportation or
other community infrastructure.
In order to solve these problems, Cook County needs to address the
following issues:
Lack of Relevant Public Investment in Tourism Economy: Other
tourism communities have made public investments in concert/
performance halls, convention centers, movie theaters, museums
or aquariums, shuttle transportation, and affordable workforce
housing, or funded the activities of a convention, events and
visitors bureau. Cook County has no events and visitors bureau
and its few investments, such as Superior National Golf Course
or the Gitchi Gami trail, provide benefits primarily during the
summer when the economy is already at or near capacity. Cook
County needs to invest in infrastructure and programming that
will provide benefits during the seven-month low season.
Inadequate Promotional Funds for Tourism: For the last 15
years, one-half of the 3 percent lodging tax in Cook County has
been diverted to pay for the County-owned golf course, Superior
National, leaving Cook County with only one-half of the
requisite promotional funds. There is an immediate need to
restore the full 3 percent for promotional purposes for Cook
County.
Lack of Event-Based Strategy to Reduce Dependence on Snow-
Based Activities: During the seven-month low season, snow-based
recreational activities (primarily alpine skiing, plus cross
country skiing and snowmobiling) are the main draw for
visitors. This makes Cook County vulnerable to low-snow years
and results in a particularly anemic economy in November, April
and May. Out-of-state tourism communities with a similar
dependence on snow-based activities, as well as many Minnesota
communities seeking additional tourists, have broadened their
draw by hosting music events, cultural performances and
festivals. Cook County needs to do the same.
Public Concensus-building Process and Plan
Over the past year, this Council, in cooperation with other
community groups, has held dozens of public meetings and public forums
and discussions regarding solutions to the County's infrastructure and
event and festival needs. These public forums have included radio and
call-in shows, newspaper stories and editorials, public township
meetings, retail shop forums, meetings with restaurant and bar
proprietors, forums with outfitters and other recreation businesses,
meetings with non-tourism businesses, non-profit meetings and numerous
other public forums, discussions and public meetings.
By the end of 2006, a consensus had developed to raise funds
through a combination of a reauthorization of the current 1 percent
local sales tax (set to expire in late 2007 with the full funding of
the hospital infrastructure) and new tourism-targeted local sales
taxes. In mid-February 2007, the County's three tourism associations
(Gunflint Trail Association, Lutsen Tofte Tourism Association and Grand
Marais Area Tourism Association) formally approved this package. On
February 27, 2007, the Cook County Board of Commissioners, by a
unanimous vote, adopted resolutions approving the sales tax package:
One percent Local Option Sales Tax for Cook County
Infrastructure: The County Board recommended that ``the
Minnesota Legislature amend existing legislation to allow use
of the 1 percent local sales tax for Cook County infrastructure
that benefits recreation and economic development (and to
defray operation costs and physical maintenance costs for such
infrastructure), which infrastructure benefits county citizens,
enhances the county economy, and supports county economic
development [which] if approved by the Minnesota Legislature,
the Board would impose continuation of the 1 percent sales tax
. . . subject to voter approval in November 2007.'' This will
raise approximately $1.1 million per year for these
infrastructure improvements. Approximately $200,000 per year
(out of the $1.1 million) is intended to be used for the first
4 years to pay off the remaining bonds on the County-owned golf
course, which will restore the full 3 percent lodging tax
proceeds to the Counties tourism associations for promotional
purposes.
One percent Lodging Tax/3 percent Recreation/Entertainment
Sales Tax for a new Cook County Event and Visitors Bureau
(``CCEVB''): The County Board recommended that the Minnesota
Legislature authorize ``the following tourism-focused sales
taxes to fund a new Cook County Event and Visitors Bureau
(CCEVB) that will primarily organize, operate and promote
events and festivals, and community-wide branding and general
marketing during slower tourism periods of the year (currently
mainly mid-October through June) to increase tourism visits
during such periods for the benefit of economy and residents of
Cook County.'' The new tourism sales taxes consist of: (i) a
new 3 percent tax on recreation/entertainment sales (i.e.,
admissions to ski, golf and other recreation or entertainment
facilities and rental of recreation equipment such as skis,
canoes and kayaks) and (ii) a new up to 1 percent lodging sales
tax matched by the use of \1/2\ percent of the existing 3
percent lodging sales taxes from the three tourism
associations. This will generate approximately $650,000 per
year ($520,000 in new taxes) to fund the new CCEVB.
Justification
The Council's analysis indicates that the investment of $650,000
per year for the new County-wide event/visitors bureau to implement a
series of events and festivals throughout the slower periods (bolstered
by the $1 million per year investment in community infrastructure that
will also help spur economic activity) will increase total sales by
$31.4 million. This investment will increase the year-around, full-time
employment with benefits for residents, and generate $11.4 million in
additional wages for Cook County residents. The additional wages will
average $5,856 per worker based on an estimated 1,948 affected workers
(out of a total workforce of 2,500 workers). The new events, festivals
and recreation amenities will increase entertainment options and
enhance the quality of life for both residents and visitors.
Using sales tax proceeds to support tourism economies is a common
and effective practice in local economies comparable to Cook County.
Similar out-of-state tourism-dominated communities, such as Crested
Butte, CO, Sand Point, ID, and Telluride, CO, have successively used
public funds to coordinate tourism planning, invest in public tourism
infrastructure, and organize events and festivals to improve the
economy and quality of life for their residents. Many Minnesota
communities have also invested general sales tax and tourism-targeted
sales taxes in both infrastructure and to promote tourism and festival
and events (e.g., the Duluth DECC) for the benefit of their
communities.
The overall sales tax plan is consistent with both Minnesota and
out-of-precedents. Cook County already has a 1 percent sales tax for
hospital infrastructure which will be fully funded in late 2007, and so
this component of the sales tax package will not increase overall
taxation in Cook County. Since the lodging and recreation/entertainment
sales taxes will be paid almost entirely by visitors to Cook County,
this component will have no impact on local resident spending.
Additionally, the total state and local sales taxes on visitor spending
in Cook County will remain well below combined taxes on tourism sales
in other tourism destinations around the country (which are often 20
percent or more), and will also be less than many Minnesota communities
(which impose up to 7 percent taxes on lodging and 3 percent on
recreation/entertainment, and up to 3 percent on restaurant and bar
sales).
Events and festivals have proven effective in Cook County. Examples
include a ski race held at Lutsen Mountains in early April, which has
transformed a slow time near the end of the ski season when most ski
areas are already closed to a week-long event that fills more than 50
percent of the lodging capacity in the Lutsen/Tofte/Schroeder area.
Other examples include music performances (jazz and bluegrass
festivals) and other cultural events or festivals whose potential has
not been fully realized due to a lack of a marketing budget and that
organization, execution and promotion of the event did not benefit from
any professional expertise or staffing and were held solely through the
efforts of a few unpaid volunteers. Cook County, with only 5,000
residents, does not currently have the resources, either through the
efforts of volunteers, the already-struggling tourism businesses or
under-funded tourism associations, to mount a coordinated or consistent
strategy of festivals and events during the seven-month low season.
Implementation
This Council is preparing organizational documents for the
formation of the CCEVB \1\ and gathering additional information
relevant to the formation and initial activities to be undertaken by
the CCEVB. It is anticipated that approximately one-third of the budget
of the CCEVB (approximately $220,000 initially) will pay for
professional staffing and other administrative costs to operate the
CCEVB and that the balance (approximately $430,000) will utilized to
pay for the programming and promotional costs of the various events,
festivals and performances organized by the CCEVB. This Council is also
developing benchmarks (such as increases in lodging sales and overall
sales) to evaluate the success of the events and festivals.
---------------------------------------------------------------------------
\1\ Cook County's three tourism associations have agreed that the
CCEVB will be governed by a thirteen (13) member board of directors
with County-wide representation proportionate with the tax collections:
four (4) directors to be appointed by the Grand Marais Area Tourism
Association (GMATA), two (2) directors to be appointed by the Gunflint
Trail Association (GTA) and seven (7) directors to be appointed by the
Lutsen Tofte Tourism Association (LTTA), plus a non-voting advisory
board member appointed by Grand Portage. The resolutions passed by the
three tourism associations and the County Board provide that the CCEVB
will continue for an initial period of five (5) years and thereafter
for successive five (5) year periods in the absence of a vote prior to
the end of the fourth year by any of the three partner tourism
associations to not support the continuation of the additional tourism
taxes (in which case the use of the \1/2\ percent of the existing 3
percent lodging taxes would be restored for promotional uses by the
respective tourism associations).
---------------------------------------------------------------------------
Infrastructure improvements funded by the 1 percent local sales
taxes will be approved by the County Board of Commissioners. The
Board's resolution lists three specific recreation projects that
community groups have been working on for a number of years including a
swimming pool, a public library addition and community center amenities
(including a skateboard park, ball fields, tennis courts, youth
activity room and group meeting space), and notes the intention that
approximately $200,000 per year (out of $1.1 million) be utilized for
approximately 4 years to make the remaining payments on the bonds for
the County-owned Superior National Golf Course. The stated goals of the
resolution include providing recreational amenities for both visitors
and residents that will support economic development efforts by
enhancing the appeal of Cook County for residents and visitors, help
the County retain service workers for the tourism industry and
contribute to the tourism industry. This Council will work with the
Board and other community groups to accomplish these goals.
How Residents and Visitors Win
A. Improved Economy
1. Reduced seasonality and $31.4 million in additional sales
2. Less dependence on snow or good weather
3. $11.4 million additional wages ($5,856 per worker for 1,948
workers)
4. More universal year-around employment with benefits
5. More affordable home-ownership and improved young worker housing
options
B. Enhanced Quality of Life for Visitors and Residents
1. Opportunities for local musicians to perform and local artists,
photographers and craftspeople to showcase their work and learn from
top artists from around the world
2. New events, concerts, performances and recreational amenities to
enjoy
3. Free shuttle service will permit travel around the community to
restaurants, retail shops and performance venues, or workplaces,
without driving.
Senator Klobuchar. Thank you.
Last--and I'm glad she could be here today--is Anna Tanski,
who will deliver the remarks from Visit Duluth on behalf of
Executive Director Terry Mattson. Visit Duluth is the Duluth
tourism bureau or--how--what--describe what you are so I know.
I've certainly----
Ms. Tanski. I will do that right now.
Senator Klobuchar.--heard of you before. All right----
Ms. Tanski. Thank you, Senator.
Senator Klobuchar.--thank you.
STATEMENT OF ANNA TANSKI, DIRECTOR OF SALES,
VISIT DULUTH
Ms. Tanski. On behalf of Visit Duluth, the official
destination marketing organization for Duluth, Minnesota, and
the community's tourism and hospitality industry, we emphasize
the value and importance of tourism to our city and its
residents.
Tourism is Duluth's number-one locally owned industry,
consisting of hundreds of small businesses, all of which are
being tested by one of the toughest and most difficult times
since the Great Depression.
The impact of tourism greatly affects everyone in this
region, whether they are directly related to the industry or
not. Duluth visitor direct expenditures are estimated to be
$780 million annually. Conservatively, State government
collects $59 million and local government collects $20 million
each year attributable to Duluth tourism. Annual Duluth travel
expenditures also support nearly 18,000 full-time-equivalent
jobs. About three-quarters of these jobs--nearly 14,000--are
directly supported by Duluth visitors.
Duluth tourism promotion is the number-one way to jump-
start our local economy, according to the Knight Foundation.
Even small percentage increases or decreases in visitor
spending have a significant impact on the bottom line.
The visitor industry applauds the vision and efforts of
Senator Amy Klobuchar, as Chair of the Senate Commerce,
Science, and Transportation Subcommittee, hoping to boost
travel throughout the United States and our region. Let's all
do--let's do all we can to grow and enhance tourism and the
local quality of life, and ultimately ease our future budget
problems.
Despite consumers watching their discretionary spending
more closely than any time in recent history, 2008 Duluth
tourism revenues increased for the 20th consecutive year, and
reached an all-time high. First-quarter 2009 reports show
declines compared to the same time last year, however. The
trend for much of America is far more ominous. We remain
hopeful that these are challenging times; whether it's
marketing the United States to international travelers or
encouraging close-to-home trips, meetings and conventions, or
business travel, the tourism industry represents real economic
development.
Duluth tourism is one of America's great success stories,
yet ``flat'' may be the new ``up'' for the foreseeable future.
[Laughter.]
Ms. Tanski. This is an industry fueled by promotion. There
are ways governments can help. Tourism is one of the few areas
where government actually makes more money by investing its
resources in the common good. Jobs, families, livelihoods, and
government services all depend on tourism. Tourism also opens
doors for all other forms of economic development. Additional
tourism promotion will result in greater prosperity for all
citizens and greater economic health for our city, state, and
country.
We thank you, Senator Klobuchar, for your appreciation of
public/private partnerships that make us a competitive travel
destination. Tourism represents an opportunity to help everyone
out of the economic downturn. The return on investment and
ability to create more jobs is unparalleled. With your help,
tourism will continue to be a critical economic engine keeping
people employed.
Thank you.
Senator Klobuchar. Thank you.
I also wanted to let Mayor Ness say a few words here. I'm
so glad he stayed with us through this.
I know how busy you must be. So, thank you for doing that.
STATEMENT OF HON. DON NESS,
MAYOR OF DULUTH, MINNESOTA
Mr. Ness. Well, thank you.
Senator Klobuchar. You're almost--the microphone's almost
tall enough for you.
[Laughter.]
Mr. Ness. Well, thank you, Senator. And thank you very much
for holding this hearing in Duluth. And I want to welcome the--
our visitors to the City of Duluth. Very appropriate. And I
hope you enjoy your time and spend a lot of money in----
[Laughter.]
Mr. Ness.--in our economy.
Tourism is important to the City of Duluth. And, as Ms.
Tanski mentioned, it is a--I think, a historic success story
for our Nation. When you think of Duluth in the late 1970s and
early 1980s, we were kind of on that downward spiral, and it
was our investment in tourism and our hospitality industry in
Duluth that created this beautiful waterfront that all of the
State of Minnesota can be proud of, and provided a foundation
for us to achieve greater growth and employment.
And the strength of Duluth's tourism industry is the
strength of the relationships between government, our local
businesses, especially those that are locally owned, and those
that work in the tourism industry. And we have representatives
from the HERE Local 99 who have been strong partners in
advocating for continued investment in the tourism industry.
We've had, in recent times, questions of, when facing budget
challenges, Do we continue to invest in the tourism promotion
in the City of Duluth? Do we continue to tax ourselves in order
to build a new arena in the City of Duluth? And the local labor
community has been a strong advocate for making those
investments, and we thank them for that.
We're looking ahead in the City of Duluth. We see some
really exciting possibilities with the construction of our new
arena along the waterfront, the eventuality of passenger rail
connection to downtown Minneapolis, a vision for a new
multimodal station right across the avenue here that will make
it convenient for our visitors to get anywhere around our
community, and that continued strength of that partnership--
business, labor, government--all working together to make
tourism a vital part of our local economy.
And we know that we cannot take our success for granted. We
need to continue to make those investments, continue to promote
our visitor industry, and to make sure that our visitors have a
world-class experience every time that they come to Duluth.
So, again, thank you so much for being here and sharing
your expertise and your insight on the tourism industry. It's
fascinating for us in Duluth. I am sure we'll take lessons away
from this.
And, Senator, thank you so much----
Senator Klobuchar. Thank you.
Mr. Ness.--for being here.
And the Senator really isn't a visitor; she's here so
often----
[Laughter.]
Senator Klobuchar. I'm an honorary citizen----
Mr. Ness.--and just--as everywhere in the State of
Minnesota, we call Amy Klobuchar one of our own. So, thank you
again for----
Senator Klobuchar.--and your only----
[Laughter.]
Senator Klobuchar.--Senator. No, but thank you for that
nice remark. I will say, I was thinking, as you spoke, mayor,
about how when I was growing up, our family would come up a lot
to the North Shore, we would go to that range, and we would,
you know, go to Split Rock. But, before you developed that
waterfront, so I'm growing up in the sixties, I don't really
remember us doing that. And, my family, on the other hand,
still does those other activities, but we always stop in
Duluth, or stay overnight, and go on the waterfront and go to
all those little shops.
So it really is an example, in my own family, of how it's
changed because of that tourism development in Duluth. So I
think you're right, it's quite a amazing success story of how a
mid-sized town is able to do that. So, thank you. Thank you for
that.
I also wanted to mention--I think it was you, Mr. Edman,
that talked about how we've had our first Congressional
hearing, which is true. But, I was with Congressman Oberstar a
few weekends ago, and I actually, with all of his work in
transportation, was not aware he kind of got his start in
Congress working on tourism. And I told him I was doing this
hearing here, and he said, ``Oh, you know,'' it's a long
historical story of his involvement in tourism. And so, for all
we know--and maybe the Mayor would know this--probably 20 years
ago, he had a hearing like this here.
[Laughter.]
Senator Klobuchar. I don't know; I'm making that up.
[Laughter.]
Senator Klobuchar. But, he clearly had been very involved
in tourism at the beginning of his career in Congress, so that
was something I didn't know.
I thought I'd start with you, and people, if you have
questions, should--after I ask a few, should come up.
But, this issue of business travel, Mr. McInerney, I mean,
clearly we've had some difficulties. I mentioned, you know,
AIG, some of these companies, what happened here. And what had
happened, nationally--and I've heard this from CEOs all across
the countries, small and big--they literally canceled their
business trips, even though it wasn't actually based on
economics. And so many of them saw it as a smart way to get
their employees together, reward for sales. And then, I also
heard about these trade conventions--and I hadn't really
thought about this, but, for small businesses, it's really
their only way to share their goods and to sell things to each
other and to figure things out. And then some of those were
canceled, as well.
So, could you comment about the need for business travel
and what you foresee is happening----
Mr. McInerney. Well legitimate business is being questioned
and canceled. It is an important part of our economy.
Senator Klobuchar.--as the economy, hopefully, improves,
here?
Mr. McInerney. Sure. The important part of that is, some of
the irresponsible rhetoric on the part of some people in
Washington have really created a backlash for companies having
their events in destination resorts. Las Vegas, since the
middle of December until the end of April, lost 402
conventions. Those cancellations are putting people out of
work, and that's putting the waiters and the waitresses and
bellmen, stewards and other hotel workers out of their jobs.
Companies that have canceled meetings have to pay a
cancellation fee. There's a company that canceled the meeting
in Las Vegas, paid $600,000, the cancellation fee, moved their
event to San Francisco, paid double the price for their hotel
rooms, but they weren't on the front page of their newspaper or
on the 11 o'clock news.
Senator Klobuchar. But, if they had come to Duluth----
[Laughter.]
Mr. McInerney. Yes.
Senator Klobuchar.--you know? That would have been OK with
us.
[Laughter.]
Senator Klobuchar. But, I mean----
Mr. McInerney. But, the cancellations are causing people to
lose their jobs.
Senator Klobuchar.--I think, though----
Mr. McInerney. But, the community loses jobs and revenue.
Senator Klobuchar.--the story is, even with the
cancellation fees, people lose the revenue----
Mr. McInerney. The hotel loses revenue.
Senator Klobuchar.--from the----
Mr. McInerney. More importantly, revenue in the community
is lost.
Senator Klobuchar. Right.
Mr. McInerney. And it's not just the hotels. That revenue
turns over about ten times in the community. It's the retail
establishments that really become affected, the small,
independent owners of these businesses. I mean, my daughter, in
New York City, had a lady's dress shop that she had to close
because of the downturn in the economy. So, it affects the
small businesses when people aren't coming there to spend their
dollars.
Hopefully, the information that we sent to the Treasury
Department in February will come out as a regulation for people
to have meetings, and why they should have them, and putting up
a fiscal responsibility and accountability on it so that it
isn't anything that shouldn't happen, and that companies that
are not receiving TARP money can use that then as the best
practices for their businesses. Because hand-to-hand meetings
and face-to-face meetings are the things that are very
important.
If you remember, back maybe 10 years ago, when the United
Airlines, in the downturn, had a commercial on, and the
chairman of the board went around and handed out tickets, ``We
now have to go out and see our customers, because we're
starting to lose market share.'' And if you're not out there
seeing your customers, you're going to lose market share, and
it's going to affect the local community.
Senator Klobuchar. We had someone here from Delta, as
well--a very strong airline----
Mr. McInerney. Yes.
Senator Klobuchar.--in Minnesota, that supplies a lot of
jobs. We also have Cirrus in Duluth, the general aviation, that
produces smaller planes.
Mr. McInerney. Yes.
Senator Klobuchar. So, we see that effect, as well, on the
industry in our State.
Mr. Edman, Mr. Siegel, do you want to just comment on this
issue of the business travel and how--you know, we're talking,
here--and not Las Vegas-style conventions in Duluth or in the
Twin Cities, but how you--if you think it's possible that we
can get some equilibrium back again to get these conventions
going, and the value of this to businesses?
Mr. Edman. Well, Madam Chair, I was referencing, in my
earlier remarks, that, as Explore Minnesota, we started to work
with the convention and visitors bureaus throughout the State
on a Meet in Minnesota Campaign. And that's rather historic,
because traditionally it was not perceived as the role of the
State tourism marketing organization to be promoting meetings
and conventions. That was the purview of the local convention
and visitors bureaus and the destination marketing groups. But,
because of the things that are happening right now in the
economy, things on a national level from all the bad PR,
they've all come together and said, ``You know, we have to
start working together as never before.'' And so, what we did
is, we started out with a small PR campaign. We enlisted some
political, as well as some business, leaders together to do a
press conference, we've created some websites, we've done some
ViralVideos about----
Senator Klobuchar. Viral?
Mr. Edman. If you go to ExploreMinnesota.com, you go to our
meeting page, you'll find a fun little video about, What if you
had a meeting and no one came? Basically a meeting of one
person meeting with himself, basically. It's a lot of fun.
[Laughter.]
Mr. Edman. And it is--it is fun. But, it is just one
element on a short-term effort, that we have--that we all have
a part in this, that it's good for business. It's good, not
just for the businesses that are affected, but for the
businesses that are meeting, in terms of developing sales,
doing research, trying to develop and how their businesses can
grow, as well as the businesses that we represent, the
convention centers, the hotels, and things like that, that
benefit.
Senator Klobuchar. Right.
Mr. Edman. So, it's good for business----
Senator Klobuchar. Well, and especially----
Mr. Edman.--business and good for----
Senator Klobuchar.--in this day, where----
Mr. Edman.--the State.
Senator Klobuchar.--so many people communicate over the
Internet and on the telephone, sometimes for businesses that
have different offices across the country or across the State,
this is their one opportunity to bring people together. So----
Mr. Edman. And we hope to expand on this effort. In fact,
we just had a meeting yesterday----
Senator Klobuchar. Good.
Mr. Edman.--with Bloomington and Minneapolis and Rochester,
on how to expand this into a longer-range program.
Senator Klobuchar. OK.
Mr. Siegel?
Mr. Siegel. I would just add to it that I think that,
certainly in our case, State government can play a role in
this, as well, in that there has long been some challenges with
State agencies holding meetings at Minnesota resorts, and
there's a perception issue that occurs there, that we really
have to kind of get out on the table and be open about and
suggest that it's OK for State agencies to hold those meetings
and come to Duluth or go to Brainerd or go to the southern part
of the State and host those meetings.
Sometimes there's a--there's a negative perception, driven
by the media; they're going to be there, they're going to take
a picture of somebody who's out on the golf course instead of
being at the meeting. And that's happened in our State,
certainly, in the past.
And so, we just want to encourage those various State
agencies that are facing these challenging decisions about
meeting, themselves, that it can be very economical, and, in
fact, sometimes it's the most economical choice, to go offsite
and do a meeting at a Minnesota resort or a Minnesota vacation
destination that also has meeting capability.
Senator Klobuchar. OK.
Ms. Tanski, just this issue of business and conventions in
Duluth, your perspective on this and----
Ms. Tanski. Well, for----
Senator Klobuchar. I remember when, before I was in
government, I went to the Minnesota State Bar Association
several times at the DEC Center.
Ms. Tanski.--they will be here----
Senator Klobuchar. Oh, good. All right. Good.
[Laughter.]
Ms. Tanski. For 18 years, I have worked passionately
selling the destination for meetings and conventions. That has
been the primary focus of what I do in this industry. And not
only do I see it as vital and essential for what we do; that
portion of what Visit Duluth works on is about a $36-million
economic impact, just in meetings and conventions, alone, but
what we're working on, in collaboration with Explore Minnesota
Tourism, as John mentioned, is, this is something we're seeing
as an opportunity, because Minnesota is a vibrant meeting
destination with such a variety of destinations that can
accommodate every meeting that's out there, virtually. And so,
we are, as Duluth, situating ourselves and actually seeing an
increase in interest from meeting planners who are looking for
a viable destination that is not going to put them on the front
page of the paper.
Senator Klobuchar. There you go----
[Laughter.]
Ms. Tanski. And so----
Senator Klobuchar.--Mr. Edman. You just----
Ms. Tanski.--we are trying to----
Senator Klobuchar.--send them----
Ms. Tanski.--capitalize----
[Laughter.]
Senator Klobuchar.--we'll take them in.
[Laughter.]
Ms. Tanski.--on the fact that Duluth is not always front-
page news. But----
[Laughter.]
Ms. Tanski. And that can be a good thing.
Senator Klobuchar. OK, this is very interesting.
[Laughter.]
Senator Klobuchar. OK, we won't tell Harry Reid about this,
but we have a plan to----
[Laughter.]
Ms. Tanski. A plan.
Senator Klobuchar. No, it's good.
I want to talk a little bit about this--just with
passport--passport card requirement now coming in, in June. I
think it's--does anyone remember the date? It's June----
Mr. Siegel. June 1.
Senator Klobuchar. June 1? And obviously we've actually
just opened up a passport office in Minnesota, something I've
been pushing for. It's in the Twin Cities, but it'll help to
expedite some of these emergency calls that our office gets.
But, the Canadian travel, people coming in from Canada, it's
very important. And I thought maybe, Ms. Brostrom, do you want
to talk about that? I mean, we want this to go smoothly. The
passport card is half the cost of a passport, I think, and will
work for coming in from Canada.
Ms. Brostrom. Yes, we've been concerned about this, for
several months or more, ever since the idea was floated, that,
people are going to have to have the passport. On our own
website, right on the home page, you can click onto another
page that tells the latest requirements of coming to, coming to
northern Minnesota and then hoping to get into Canada and
coming back into Minnesota. So, we're trying to get the word
out.
The Canadian visitor is very important to Grand Marais;
we're just 40 miles from the border. And people in Thunder Bay,
for instance, it's a 90-minute drive, and they love Grand
Marais. In a very--in 90 minutes, it's--it's a whole 'nother
world for them. And they----
Senator Klobuchar. Without an exit.
[Laughter.]
Ms. Brostrom. Yes. I didn't know I had one, but----
Senator Klobuchar. No, no, no, that's what your website
says, though.
[Laughter.]
Senator Klobuchar. I'm just using your own marketing, and
repeating it so that----
Ms. Brostrom. So----
Senator Klobuchar.--it'll get in people's heads.
Ms. Brostrom. Yes. But, the interesting thing, I'm
finding--because my--I'm a marketing person, but my office is
right in the same--just behind the visitor center, in the same
room, so I have my door open all the time, and I'm listening
and helping people. And I'm really pleased that so many people
coming to Grand Marais, and then they ask about Thunder Bay, or
going to the border, they have their passports. So, somehow the
word is getting out. The passport card, I think, is a good
idea.
And I met, yesterday, with the folks--the director of
tourism in Thunder Bay and so on, and we were also talking
about this issue. So, on both sides of the border, we're trying
to get the word out.
And it's much quicker in Canada to get a passport now.
Senator Klobuchar. Right. And those are some of the
things--when I first came in, there were some huge problems, 2
and a half years ago.
Ms. Brostrom. Yes.
Senator Klobuchar. I'm looking at Zack, back there. We
handled, between Senator Coleman's office and ours, we each
handled about 1,500 emergency cases for passports, people that
called their Member of Congress because they had requested them
6 weeks before and they didn't have them.
Ms. Brostrom. Yes.
Senator Klobuchar. We saved 17 brides' honeymoons, and lost
one.
[Laughter.]
Senator Klobuchar. And it was not exactly what I wanted to
be doing in our first 2 months, with these ideological young
people that had joined the office, was working on college kids'
trips to Cancun. But, it was----
[Laughter.]
Senator Klobuchar.--what we were left with, because of
disorganization in the Federal Government at the passport
office. And so, it has improved over the years.
Ms. Brostrom. Yes.
Senator Klobuchar. That was such a fiasco. And so, it's
improved, but it still isn't where it should be, if we really
want to promote this international travel----
Ms. Brostrom. Yes. I was----
Senator Klobuchar.--especially with----
Ms. Brostrom. Yes. I was----
Senator Klobuchar.--the Canadians.
Ms. Brostrom.--stunned to learn, yesterday, that in Thunder
Bay you can get a passport there in about 10 days.
Senator Klobuchar. So, that's why I hope having this
Minnesota office will help us for our travel. But, mostly what
I'd like to see is just help international visitors----
Ms. Brostrom. Yes.
Senator Klobuchar.--to come here.
So, Ms. Somnis, I thought one of your most interesting
points was just about the workers and what this means. And I
loved that story of a kid working as a dock boy on Lake
Vermilion--I'm going to use that example; I told Mr. Siegel he
should, too--going on to manage the Chicago Hilton. But, just
what you've seen, in terms of the jobs, in a very difficult
economic time, especially with iron-ore mines--the mines were
going strong for a while, and how they've--because of the
worldwide demand, are now back where they were. We hope they're
going to come back again. But, just the possibilities for
employment and what you see.
Ms. Somnis. Well, I think that there are people working in
retail service, tourism and hospitality jobs right now
throughout the Arrowhead that would never have, in the past.
But, they are--they are needing to redirect themselves, feed
their families. And hopefully, with the travel trend for the
vacations closer to home----
Senator Klobuchar. Right.
Ms. Somnis.--our region will be busy this spring and summer
travel season, and we'll be able to put some of those----
Senator Klobuchar. And for----
Ms. Somnis.--people to work and----
Senator Klobuchar.--for people to find out deals in the
Arrowhead, whether they're--wherever they are. Are there
websites that people can check in these----
Ms. Somnis. Yes. They can check MinNEcations.com.
Senator Klobuchar. Oh, of course, I----
[Laughter.]
Senator Klobuchar.--I forgot.
Ms. Somnis. And on that----
Senator Klobuchar. OK.
Ms. Somnis. On that website, we go--you go to the Northeast
page of Explore Minnesota Tourism----
Senator Klobuchar. OK, I see.
Ms. Somnis.--and the 15----
Senator Klobuchar. And inside the----
Ms. Somnis.--communities who are participating in the
campaign----
Senator Klobuchar. They're all----
Ms. Somnis.--are linked there.
Senator Klobuchar. OK.
Ms. Somnis. And they all have their deals on their----
Senator Klobuchar. OK.
Ms. Somnis.--on their pages. And so, yes, we encourage all
kinds of travel, to come and keep our kids busy and some of us
adults, as well.
Senator Klobuchar. OK, very good.
Mr. Siegel. If I could just piggyback on--we did a survey
on our--we have a Board of Directors for the Restaurant
Association of 28 restaurant operators, and went around the
table at a recent board meeting. A little over half of them got
their start either washing dishes or busing tables. So, I think
that's just indicative of the same story that you're telling,
that this is an industry where you really can start really in
the back of the house and move your way up and get into
management.
Ms. Somnis. But, I--if I may, I----
Senator Klobuchar. Go ahead.
Ms. Somnis. Many years ago, when I first moved to the North
Shore, I worked at Edgewater, which is now Bluefin Bay, and Rob
Buntz, the developer of that resort, likes to say that I am a
poster child for tourism careers because I grew up starting,
waitressing, housekeeping, cooking, and managed to evolve into
a full-time professional----
Senator Klobuchar. Yes, I did that, too, but then I spilled
12 iced teas on one customer, and that was----
[Laughter.]
Senator Klobuchar.--my career in the hospitality industry.
[Laughter.]
Senator Klobuchar. Anyway, that's great. So, you are one of
the success stories.
Ms. Somnis. Yes, I could be one of those, myself, yes.
Senator Klobuchar. Dr. Schneider, this idea of marketing
Minnesota internationally and--what we're trying to do on the
Federal level, obviously, is to market, America, but part of
this will be, if we get this bill passed and start going,
there's going to be a $10 fee on visas on--for people coming in
from other countries, so it won't be on the tax of our
taxpayers. And again, it's exactly what other countries have
done that have been basically eating into our share of
international tourism. As this develops, I can easily see the
Mall of America being a place that people will want to travel
to; they already are--and then they--then we somehow promote
Minnesota, because I think--we have the Canadians coming down,
which is a major piece of our international travel, but just--
studies you've seen, how do you promote other parts of the
country? Because sometimes people come for 3 weeks, and if they
come to the Mall of America, we'd like them to come elsewhere,
as well, in our State.
Dr. Schneider. Other parts of the country, or other parts
of the State? I'm sorry.
Senator Klobuchar. Oh, we want them to come to our State.
Dr. Schneider. Oh, OK, sure. Well, certainly, I think there
are some cooperative efforts underway and in discussion, in
terms of promoting day trips or 3- to 5-day trips. And I think
the packaging is really important. And the ease of
transportation is one thing we consistently hear, from
international visitors, is that we need easier transportation
information, because there is an assumption that you can take a
train up to Duluth or to Grand Marais or down over to
Worthington or----
Senator Klobuchar. So you could see----
Dr. Schneider.--Detroit Lakes. So, certainly some
transportation information is necessary, and possibly
infrastructure, as well. But, definitely packaging accurate,
up-to-date information, as Explore Minnesota and other websites
are providing, would be helpful.
Senator Klobuchar. Yes. Because I was thinking, I went,
once, with our family to Denmark, and we went to Copenhagen and
then we wanted to go somewhere that wasn't just some big town,
so I looked on the website, and they have this thing in Denmark
where they promote little--they're basically bed-and-
breakfasts, but they--you stay on a farm. So, they said that
this particular farm I thought my daughter would love would
have horses, sheep, and pigs. And it had, in fact, three
horses, one sheep, and 3,000 pigs.
[Laughter.]
Senator Klobuchar. It was a hog farm. But, it was
actually--it was actually great. It was fine. We had a great
time. But, my point is----
[Laughter.]
Senator Klobuchar.--I was thinking, if this develops--and
again, we want to make the market there for bringing people to
our State, and we're going to have to get this bill passed and
work on this, but we have to think creatively about things that
Minnesota could offer----
Dr. Schneider. Well----
Senator Klobuchar.--as part of that, as part of a package
deal that doesn't just take you to the Twin Cities.
Dr. Schneider. Certainly, and there are a number of
products and experiences Minnesota offers. And, along those
agricultural lines, we've just completed a study, with a number
of partners, about the interests and opportunities for
agricultural tourism in farm stays in the State of Minnesota.
Senator Klobuchar. There you go. All right, very good.
Yes?
Mr. Edman. Yes, Madam Chair, if I could just comment just
about the U.S. promotion effort, right now in Minnesota we
market overseas, we market to Japan, Germany, the U.K., and the
Scandinavian countries, but our budget is relatively limited.
And we do----
Senator Klobuchar. So, that's----
Mr. Edman.--we do a lot of cooperative marketing with other
States--for instance, the Great Lakes States or the States
along the Mississippi River. But, unfortunately, in the United
States--I mean, one of the things that makes us great is 50
unique States, but that also makes it difficult, where right
now all the international marketing is done on a State-by-State
basis. You have a State----
Senator Klobuchar. Exactly.
Mr. Edman.--like Florida or Nevada that's doing a lot----
Senator Klobuchar. So, that allows these bigger States to--
--
Mr. Edman. Minnesota is not doing as much. And so, I think
a U.S. travel promotion organization not only would allow us to
compete, grab market share from other countries that are
capturing it away from the United States, but it also provides
experiences for travelers. Travelers do not travel--
particularly international--to geopolitical units of States;
they travel for experiences, they travel to destinations. And
right now we don't market the United States that way. This act
will allow us----
Senator Klobuchar. Right. That's----
Mr. Edman.--to do that.
Senator Klobuchar.--the plan. Thank you.
Questions? Comments on these, anyone? Probably--yes, that's
good, because Don put that thing up there pretty high. Take it
down, there.
OK?
Mr. Erickson. Hi. Yes, I'm too tall. I would pull it up----
[Laughter.]
Mr. Erickson. But, just a couple of comments. I heard a lot
of information here today, a lot of--a lot of big numbers,
actually. That's good. Billion, trillion? In my industry, I
represent low-wage hotel/restaurant workers, so I'd like to
talk about some small numbers. And it's just kind of an FYI--my
personal experience.
I represent workers in the hotel/restaurant industry, in
Duluth, the Iron Range, and International Falls. So, there are
issues on the border with Canadians coming across. I've been
hearing that. But, I would just like to bring some of the--just
a couple of quick life stories that I am hearing from my
members.
You know, the economy is bad. I won't use any names, but
Joe, at the Pickwick, who is a buser who's raising two
daughters, has been cut 1 hour a day. Well, at $8 an hour, you
know, 1 hour a day isn't a lot of money, but if you times that
out in a week, it's 5; in a pay----
Senator Klobuchar. Yes.
Mr. Erickson.--period, it's 10 hours.
Senator Klobuchar. Exactly.
Mr. Erickson. Through the course of a year, it's--it could
be anywhere from, you know, $1,600. He's not going on vacation.
And when he does go on vacation, it's very local. It's to his
parents' cabin. It's very local.
So, you know, and us continuing to build relationships and
work together, I really think, you know, if we take care of the
line workers, as were mentioned, you're going to see,
hopefully, a spike back up in tourism. You know, very
important, I think, you know, as----
Senator Klobuchar. Right.
Mr. Erickson.--part of that.
Mr. McInerney. Yes, I think that I can respond to that.
Because I think one of the reasons why the hotels now are
discounting heavily is to keep as many people employed, because
when we are going to come out of this, and when we turn around,
we want to make sure that we have those trained people that are
there. So, it's unfortunate that we have to cut some hours. We
cut middle management out of most of the hotels, back in
October, November, December, when it first started, but the
important part now is to keep the people working, at the line
level, so when we come out of this thing and the transition
occurs next year, and when business is significantly better in
2011, we need those people to be there.
Mr. Erickson. Absolutely. And that's kind of what I am
bracing for is the future.
Senator Klobuchar. We had testimony from a woman who had
this Bavarian Inn in Michigan, and she had--I asked her what
she cut, because I actually thought she was--and she had cut
hours, like you said, but she had cut mostly middle managers,
which is bad. I mean, it's jobs that they've cut, but I think,
again, your story illustrates how improving this climate, in
the economic climate, generally, but then making sure that
people see this as, it's OK to have business conventions. Maybe
you're going to scale back a little bit and go somewhere else,
but we'll keep our workers employed, and that that's so much a
piece of this, as well. So.
Mr. McInerney. Can I just give you an example of----
Senator Klobuchar. Yes.
Mr. McInerney.The Broadmoor, in Colorado Springs, is one of
the biggest private employers there. Their business is down
significantly. They had a 72-hour special book now deal where
you called and received a 50-percent discount on any room
between now and the end of the year. They wanted to sell these
rooms to keep their over 1,200 employees working. They thought
they could sell about 7,500 rooms. They sold over 13,000. And
it'll keep all those people working throughout the summer, into
the winter season, so that next year, when they come out of
this, they'll have those employees there.
Senator Klobuchar. OK. I was asking these guys if they had
a deal that they wanted to advertise, too.
[Laughter.]
Senator Klobuchar. No, we know that they are there. So,
that's a very good point. And I think people are looking for
deals, and it, again, will keep workers employed and keep the
business going. So, anything else from the----
Yes?
Mr. Buehler. If I may, Senator--thank you very much for
coming. I'm Ken Buehler. I'm the Executive Director of----
Senator Klobuchar. Oh, well, thank you----
Mr. Buehler.--the St. Louis County Heritage and Arts
Center, and we're very proud to have you and the rest of your
honored and distinguished guests with us today.
I want to go back to a comment that Mr. Siegel made which
was kind of following up on one that John made, which was about
infrastructure and getting people around. As you know, because
you've been very supportive of it, we're working on a project
to return rail passenger service between here and the Twin
Cities.
You mentioned airlines and airports, and I'm just
wondering, Senator--I know you've been supportive in the past--
rail seems to be a real interest of this particular
administration, and there is Federal stimulus money out there
for train service, there's the Amtrak bill that was passed last
year, and Congressman Oberstar is working very hard on the next
TEA bill, which we also hope will include some transportation
funding for----
Senator Klobuchar. Yes.
Mr. Buehler.--rail. And I'm just wondering if anybody has
any comments about the importance of rail, not necessarily our
efforts on the Northern Lights Express, which I've left some
posters around. Gee, I don't know how that happened.
[Laughter.]
Mr. Buehler. But, it just kind of did.
[Laughter.]
Mr. Buehler. So, I'm just kind of hoping that there would
be some support, as you have been, in the past----
Senator Klobuchar. Right, and----
Mr. Buehler.--about something that----
Senator Klobuchar. Both Congressman Oberstar and I have
made requests for that project.
Mr. Buehler. Right.
Senator Klobuchar. We have other projects I've made
requests for, as well, in Minnesota. And you are right, the
Administration's--a major priority. Vice President Biden came
out to our State and spoke about it. There's $8 billion in the
stimulus plan for rail projects that people are bidding on
right now, and then we also will have additional money in the
transportation bill. We are behind compared to other developed
nations, even developing nations, when it comes to rail, and it
creates some great opportunities.
I always like traveling by rail with my husband, because
then we don't get into a fight about directions.
[Laughter.]
Senator Klobuchar. And so, I think that there are some
great possibilities, here. So, I don't know if anyone else
wants to comment about it.
Mr. McInerney. About traveling by rail?
Senator Klobuchar. Yes.
Mr. McInerney. I think it's a great way to go from New York
to Washington, D.C., without all the confusion.
Senator Klobuchar. Yes, exactly. Well, we have some great
routes that we want to have here, too, as well.
All right, anybody want--oh, Tammy, yes.
Ms. Stanoch. Senator Klobuchar, I'm Tammy Lee Stanoch, Vice
President of Corporate Affairs at Delta Airlines. Thank you all
for being here. And just because I'm in airlines doesn't mean I
don't like rail; I think that's great, too.
[Laughter.]
Ms. Stanoch. All forms of transportation are good. But, I
particularly want to thank you all for talking about what
you're doing to promote tourism here in northern Minnesota,
because we are not successful as an airline if we don't have
people that want to fly to these great destinations. And
Northwest had a long history as--of serving the Heartland in
Minnesota, now Delta wants to continue that, as well. But, if
people don't want to fly to their lake cabins in International
Falls or Hibbing or Brainerd or Bemidji or Duluth, we're not
going to be able to be successful, either.
So, thank you very much for what you're doing. And thank
you, Senator Klobuchar, as well.
Senator Klobuchar. Right, OK, thank you.
Anything more?
Voice. [Off Microphone.]
Ms. Brostrom. I'm not able to stay very much longer,
because the grand opening is today, and I'm missing it. And
it's--they are--the grand opening is on the very first day that
it is opening. It's--you know, so they didn't have a soft
opening. But--so, what I can say is, though, is it's a
beautiful--really, for--especially in Grand Marais, for our
scale of buildings and so on--there's a beautiful building that
has been built, a coffee shop inside is--are--some pretty fancy
touchscreens for all kinds of information, particularly
promoting, you know, Canadian travel. And even though my job is
to promote, you know, business within Grand Marais, I welcome
this, because we have so many travelers coming up, especially
from the Twin Cities or, you know, south of us, who spend time
in our area, and then they go on into Canada. So, it's a very
educational sort of a building and experience. So--you know,
and cultural, as well, so it's touching on those parts of
tourism that we could use some growth in our area.
So, as I say, I'm missing the grand opening, the bagpipers
and everything else, so----
Senator Klobuchar. OK.
Ms. Brostrom.--I guess we can just say, ``Stay tuned,''
yes.
Senator Klobuchar. All right. Well, I wanted to thank
everyone for coming today. And this has been very helpful.
Wouldn't you say, Mr. McInerney, it's even less stuffy than the
Washington hearing?
Mr. McInerney. Oh, I think this is a lot friendlier.
Senator Klobuchar. Yes.
[Laughter.]
Senator Klobuchar. Exactly. And actually, I've gotten a lot
of good ideas from this that I can bring back to Washington,
good examples that we can use.
We are feeling very positive that we could finally pass
this bill that's been kicking around Washington for years and
years and years. And sometimes an economic crisis has some
silver linings, and one of them has been the increased focus on
how important the tourism industry is to our country. And if
that's what gets us there, OK. But, it would be very helpful
for our country, for the long term, to pass this bill, to make
sure people know, in Minnesota, that there are good deals close
to home, that we want to promote, this summer, if even people
go for 2 or 3 days. And then, also to understand the importance
of the workers to this industry.
And then, finally, business travel, that it is OK for
businesses to travel again. Obviously, they'll have to look at
their bottom line, and maybe they're going to scale back, but
we want to make sure people understand that there may have been
a few bad actors out there, but they shouldn't ruin it for
everyone, including our workers in the travel industry.
So, thank you for being here. This hearing is officially
adjourned.
[Whereupon, at 10:37 a.m., the hearing was adjourned.]