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Minnesota Resorts Win in Gas Crunch

September 4, 2007 by   - () Leave a Comment

High gas prices are having a somewhat surprising impact at some central Minnesota resorts, according to the St. Cloud Times.
They are attracting closer-to-home business instead of keeping families away. That, combined with an early spring and a declining number of resorts for families to choose from, has kept business brisk this year at some area resorts.
The same was true a year ago, according to a survey about the 2006 season done by the Minnesota Resort & Campground Association.
Some resorts even saw an increase in boat rentals this summer among guests who wanted to avoid the expense of towing their own boat.
Jim DeRose, operator of Riverside Resort on the Horseshoe Chain of Lakes near Richmond, said high gas prices may reduce the distance vacationers are willing to travel. But that’s a good thing because of the location of his resort.
Leander Wicker has owned Whispering Pines Resort in Kimball for 28 years. He said his two cabins have been booked solid all summer, but with people from the Twin Cities of Minneapolis and St. Paul more so than ever before.
“With gas prices as they are, people can’t afford to drive that far,” Wicker said.
And when campers stay close to home, they are more likely to offer repeat business throughout the summer.
DeRose said business has become more local in the past 10 years, and he’s seen more interest from the St. Cloud area. People have realized they get the same experience without a long drive, he said.
But those reasons are having the opposite impact on business at Red Barn Resort in Sauk Centre. Owner Dale Johnson’s experience is more like the 22% of resort owners in the survey that said business started to slow last year and worsened this year because of gas prices.
His business is down 60-70% because it relies on out-of-state travelers. His largest customer base is families from Kansas City.
The longstanding Riverside Resort has been in DeRose’s family since 1926. He took over the business in 1979.
In 1970, Minnesota resort numbers peaked at more than 2,000. Now there are fewer than 900, as listed on the Explore Minnesota website.
Minnesota is losing resorts at a rate of about 5% each year, according to Hospitality Minnesota, mostly due to the cost of running the business vs. the amount that can be made selling the expensive real estate to a private developer.
Explore Minnesota Tourism estimated the loss to be higher, at 7-10% annually.
Johnson monitors local competition. Osakis had about 20 resorts when he started business 17 years ago, and that number has been more than cut in half, he said.
Resort closures are one of DeRose’s biggest concerns, one he hopes to discuss as he reviews this year’s resort season in October as a member of the Minnesota Resort & Campground Association board of directors.
Land is more valuable than the resort business, so when the properties get sold the resorts usually disappear, he said.
Johnson wants to sell the Red Barn as he nears retirement. He’s holding out to sell it to someone who would keep the resort running, but his hope of making that happen is running low.
Lakeshore property values are high and, consequently, property taxes paid by resort owners have become a burden.
Shoreline ordinances are making it harder for resorts to stay in business as well. When resort owners try to build new cabins or expand existing units, they are tied by shore land management regulations. DeRose’s resort covers 35 acres, so he has space for expansion. But there are limits on how big or how close to the lake he can go.
DeRose also uses other strategies to keep space occupied.
For more than 10 years, the business has reduced rates in the fall with a back-to-school specials. DeRose said the end-of-August deal draws families that want one more trip before school starts.

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