10 Events That Changed Minnesota's Hospitality Industry
(plus one that will)

A glimpse at how our past got us to where we are today.

By Amanda Fretheim Gates

In 1892, the Republican National Convention came to Minneapolis and nominated President Benjamin Harrison for re-election, though he eventually lost to democrat Grover Cleveland. With the media’s attention focused on the Twin Cities as the RNC returns to Minnesota for the first time in more than 100 years, the question lingers: Comparatively, are we more hospitable now than we were then?

Over the years, our hospitality industry moved with the times, building necessary function spaces and infrastructure, all the while learning to promote the goods we have to offer. In recent years we’ve seen an increase in marketing efforts due to the upswing of many convention and visitors bureaus and noteworthy attractions. Though our meetings and events industry is rather intimate compared to some cities, our planners and vendors are more educated than ever, raising the bar with each passing year. Add to that overall societal events that can’t be ignored—the World Wide Web, green initiatives—and a picture begins to emerge, showing how the region’s hospitality industry continues to evolve.

We took it upon ourselves to compile a list of 10 events that changed our hospitality landscape. While many issues came to mind—everything from the smoking ban and 9-11 to Northwest Airlines taking to the skies and water parks bringing the sea indoors—we couldn’t cover them all. But, the following list does consider Minnesota’s place in the hospitality world today. With accomplishments such as these, we feel a visit from the 2008 RNC is just the tip of the iceberg.

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Minneapolis Convention Sites

Welcoming Republicans and Elvis fans since 1886

In 1886, the Minneapolis Exposition Building opened at the intersection of Main Street and Central Avenue. When the RNC came to town in 1892, architect David Adler had the job of converting the building into a site fit for the group. According to a New York Times article published in February of that year, “the seats for the spectators [rose] in every direction from the central space, so that each person [could] take in at a glance the faces of at least 8,000 people.”

After the Exposition Building ran its course, the Minneapolis Auditorium opened in 1906 at the corner of Nicollet Mall and 11th Street. When the second Minneapolis Auditorium opened in 1927, the first auditorium became the Lyceum Theater, home to the Minneapolis Symphony. Sitting at the intersection of Grant Street and Stevens Avenue, the new Minneapolis Auditorium cost $3.2 million and held 10,000 people. Besides conventions, the building also held Minneapolis Lakers basketball games from 1947 to 1960. As more groups visited Minneapolis, a convention hall was added to the auditorium in 1965.

In just 20 years this venue couldn’t compete with others around the country. A new convention center was completed in 1990 on 25 acres just north on Grant Street between First and Third avenues. “Through the ’90s, we had a very full building and we were a very sought-after destination,” says Kevin Lewis, vice president of convention sales for Meet Minneapolis. “So much to the point we were losing business because of availability.” With another bout of renovations completed in 2002, the Minneapolis Convention Center now boasts 480,000 square feet of show space, 87 meeting rooms and a 28,000-square-foot ballroom.

On the other side of the river, St. Paul converted the outdated Civic Center into the RiverCentre in 1998. With the RiverCentre, Roy Wilkins Auditorium and Xcel Energy Center (which was constructed in 2000) connected in the middle of downtown, the city attracts larger and more diverse groups, such as the RNC 116 years after its first Twin Cities experience.

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Convention and Visitors Bureaus

From brochure providers to destination marketers

In the early 20th century, young men decked out in orange from head to toe and employed by the Minneapolis Civic and Commerce Association—a group founded in 1911 with the job of fostering and promoting Minneapolis industries—hit the streets looking for cars with out-of-state license plates and offering visitor information. Next door, with the tremendous growth in the 1920s and 1930s due to the peak of our infamous gangster era, the hospitable city of St. Paul formed its visitors’ bureau in 1929, one of the first of its kind in the country.

Over the years, many visitors’ bureaus formed within a city’s chamber of commerce, and some remain in place today. Several of these posts transformed from glorified brochure stands to one-person departments to, thanks to the lodging tax, independent entities with much larger staffs (such as Meet Minneapolis with nearly 60 employees).

The state allows any city to use a percentage of its lodging tax to fund a local convention or tourism bureau for the purpose of marketing and promoting the city as a tourist or convention destination. For example, Bloomington’s convention and visitors bureau (CVB) receives 2 percent of the city’s 7 percent lodging tax. With nearly 60 CVBs statewide, hundreds of people work hard and spend tax dollars to promote our state, in turn bringing tourism dollars to restaurants, hotels, retailers and attractions. Oftentimes, the remainder of a city’s lodging tax goes to improving public spaces, schools and infrastructure.

Because of the high impact of tourism dollars on our state’s economy, Meet Minneapolis, the Saint Paul Convention and Visitors Authority and suburban CVBs strive to market our assets with campaigns such as the Minneapolis Arts Explosion, Minneapolis Saint Paul More to Life, and Rah Rah Rochester, just to name a few.

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Mall of America

The mega-mall that has it all

When the Vikings and the Twins moved from Metropolitan Stadium in Bloomington to the Metrodome in Minneapolis, it didn’t take long for the Bloomington Port Authority to buy up those 78 acres and form a plan for what to do with them. Some of the ideas they threw around: condominiums, office complexes, a convention and visitor center or a mixed-use retail center. In 1986, Canada’s Ghermezian brothers signed on the dotted line to develop the largest mall in the country.

When the mall opened on Aug. 11, 1992, it housed 330 shops, four department stores and more than 10,000 employees. NBC even covered the grand opening nationally. “I think, no question about it, it was the one attraction that put Minnesota on the map,” says Bonnie Carlson, president and CEO of the Bloomington Convention and Visitors Bureau. “A lot of that, too, was because of its uniqueness. There is still nothing like that in the country. It just wasn’t a mall; it was a mix of retail and entertainment. You could go there with the entire family, which opened up a lot of opportunities for us to sell it as a tourism destination.”

Of course naysayers didn’t think this monstrosity would really take off. However, the mall contributes nearly $2 billion in economic impact for the state. In 2004, mall officials hired FutureBrand, a brand strategy and design consultancy firm, to review its progress. The firm concluded that the mall’s reputation was stronger than that of Las Vegas, New York City and downtown Chicago.

In response, Bloomington flourished. Some 40 hotels within five miles of the mall now offer free shuttle service to it. “Certainly it stimulated additional hotel development in Bloomington, but the city has always had the plan to develop hospitality,” says Carlson. “That is our No. 1 industry. Of course, you don’t get people wanting to build hotels unless the occupancy and the market are strong.”

While Minnesota and its Twin Cities offer plenty of attractions for tourists, 42 percent claim the mall is the main reason for their visit. “When we market,” says Carlson, “we always market Minneapolis and St. Paul. Our thought is that we want our visitors to stay with us in Bloomington, but we know they’ll want to see our beautiful downtowns. But, since the mall’s development, we’re the magnet, we’re the attraction.”

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Education

From “party planner” to professional

Meeting and event planners often muddle through the stigma that the job only entails blowing up some balloons and tossing potato chips in a bowl. Those outside of the industry have little idea of what it really takes. But, thanks to specific certifications, designations and degrees in meeting-and-event planning, the notion begins to fade away that anyone who throws a birthday party can be a meeting planner.

In 1985, the Convention Industry Council developed the Certified Meeting Professional (CMP) certification. Currently more than 12,000 meeting professionals around the world list those three letters after their name. “When I first joined MPI in 1993 and heard about the CMP, that became a goal of mine,” says Denise Woods, CMP, director of communication and events for Associated General Contractors of Minnesota, and MPI chair of the CMP study committee. “It was something to strive for. It’s a confidence builder.”

Presented by ISES, the Certified Special Events Specialist (CSEP) certification offers a similar feeling to those in the industry. Jodi Collen, director of events and conferences at Augsburg College, took the CSEP exam to set herself apart from other planners in the industry. She credits her higher education and this designation for landing her previous job in the corporate sector of the industry. “I think it adds a level of professionalism to the industry as a whole,” she says. “It shows that we’re self-regulating and that we take what we do seriously. It gives it credence.”

Besides boosting confidence amongst planners, these new learning opportunities caused the industry to change, too. More employers prefer, if not require, CMP or CSEP designations from new hires. Vendors and clients understand the level of knowledge and experience that comes with those initials. And, colleges, technical schools and universities now provide degrees in meeting management and related fields.

In recent years, hotel management degrees increased as well. While Cornell University’s hotel school is the oldest in the nation (founded in 1922), more than 200 schools currently offer bachelor’s degrees in this field. Large hotel brands, including Hyatt and Marriott, scoop up thousands of graduates each year.

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Arts Explosion

Changing the way we market the Twin Cities

Four years ago, five Minneapolis institutions were in the midst of big changes. The Walker Art Center, Minneapolis Institute of Arts and the Children’s Theatre Company expanded and renovated old space. The Guthrie Theater and Minneapolis Central Library rebuilt from the ground up. Set to unveil within 14 months of each other, these arts organizations, with the help of Meet Minneapolis, discovered a unique opportunity to spread the news.

After six months of planning, in May 2004 Meet Minneapolis staff members, as well as Mayor R.T. Rybak, headed to New York City to announce to the world an “Arts Explosion” the city was about to experience. “People couldn’t help but listen to us, because we came in with these five institutions and with a story that was bigger than any one of them,” says Laura McCarthy, marketing communications director for Meet Minneapolis. “None of the [institutions] had the people on staff to do this, so it took us coordinating that effort to get the word out.” After many more months of shouting from the rooftops, the first major Arts Explosion story ran in Travel + Leisure in January 2006.

Publications ranging from The New York Times and the Washington Post to the Omaha World-Herald and the Ames Tribune assisted in the campaign, which received nearly 220 stories with a circulation of nearly 70 million and an ad value of $3 million, raising awareness of an eclectic arts scene the country never knew we had. “The convention sales department said they got a lot more requests from meeting planners, because there was interest in the destination due to stories running in all these magazines,” says McCarthy. “Now it’s up to us to take that and parlay it into something new. We’ve used these very glitzy, high-profile places to catch people’s eyes, and now we have to talk about those little things that make us special.”

Besides places to showcase books, art or theater, these buildings also act as destinations unto themselves. Visitors seek out the Guthrie or the library to walk the Endless Bridge or spy great architecture. According to Patrick Hanlon, author of Primal Branding: Create Zealots for Your Brand, Your Company, and Your Future, every brand needs an icon (i.e. the Nike swoosh or the Starbuck’s mermaid). Because of the Arts Explosion, Minneapolis’ brand grew stronger. The Twin Cities now boasts iconic designs from some of the world’s greatest architects, including Michael Graves, Cesar Pelli, Frank Gehry, and Jacques Herzog and Pierre de Meuron. “These buildings are becoming iconic,” McCarthy says. “We didn’t have that before. We don’t have an Arch or a Space Needle. It’s given us these iconic spaces that others can connect with our city.”

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Internet

The catch-22 of the World Wide Web

Remember using snail mail? Seen your travel agent lately? Ever since the World Wide Web came to be nearly 20 years ago, the way we conduct business, and, well, just live, changed completely. Our contacts on the East Coast were just an e-mail away. We started seeing television ads for strangely named companies such as Expedia and Travelocity. Business became easier. Or did it?

Today we rarely need to talk to other humans. We make restaurant reservations through Open Table.We book hotel rooms through the company’s Web site. We send PDFs and text messages, not faxes or letters. The electronic age affects meetings, too. Online RFPs make for much faster business, as does online registration services, or simple access to wireless Internet and Web technologies on our cell phones and in our cars.

Sure, the Internet saves immeasurable amounts of time and money. However, it has brought upon us a culture of instant gratification. We want e-mails answered now. We want that RFP approved ASAP. At the same time, associates want prompt responses from us, too. In actuality we’re busier, and more often than not, we may have less time to complete our work.

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Hiawatha Light Rail Line

Moving attendees from point A to point B

When being interviewed for this cover story, Bloomington CVB CEO Bonnie Carlson stressed that the Hiawatha Light Rail be included on the list. Because it connects Bloomington to Minneapolis, the light rail has been a huge contributor to the city’s livelihood. In fact, Mall of America’s station is the second busiest station during a weekday.

The light rail opened for business in June 2004, with nearly 500,000 rides that first month. The completed 12-mile route from Minneapolis to Mall of America opened in December of that year. More than 9 million locals and visitors hopped on the light rail in 2007, 1.2 million more riders than 2005, and the average weekday ridership hovers around 26,000. “It really is an advantage for our citizens here as they travel elsewhere,” says Kevin Lewis, vice president of convention sales for Meet Minneapolis. “But just as important is the ability for the convention attendee and the tourist to be able to take a safe, convenient mode of transportation from the airport to Minneapolis.”

Not only has the light rail changed our hospitality and tourism landscape in just four years, but with future expansions and commuter rails added, it will continue to do so. The Central Corridor light rail line, an 11-mile track due for completion in 2014, will connect Minneapolis and St. Paul via University Avenue. Adding a possible 16 additional stations, the line would provide a 35-minute commute from one downtown to the other. As Minneapolis and St. Paul continue to market the two cities as one prime destination, the future Central Corridor light rail line would make it even easier to do so, with the Xcel Energy Center and its surrounding attractions and hotels just a $2 fare away from a new ballpark and additional fine dining, hotels and theater options.

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Rise of Luxury Hotels

Giving the creative class a place to stay

Once upon a time, hopes for a large convention hotel in downtown Minneapolis loomed large—a place near the convention center that could house all the attendees of a citywide convention. It hasn’t been in the cards for our city. What’s arrived instead is an influx of luxury brands—smaller, expensive, experience-based hotels such as Chambers, W Foshay and Hotel Ivy. One hotel led the pack: Graves 601.

Open in 2003 and owned and operated by Minneapolis-based Graves Hospitality, Graves 601 anchors one corner of Block E. When the Graves family researched building a luxury hotel in the Twin Cities, they were alone in the market. This didn’t help when trying to get bankrolled. “But, we felt if we could capture 4 percent of the top 10 percent of the people paying higher rates in the city, we could do it,” says Ben Graves, president. “We were actually able to generate even higher than expected rates. We’ve always been progressive in the arts and a liberal city, but there wasn’t anything in the hospitality industry that showcased that part of the city. I just knew there was a creative class here that would be looking for a unique experience.”

Because of Graves’ immediate success, general managers of other hotels around town started closing the gap between their rates and the room rates at Graves 601. They discovered that Minnesotans and other leisure and business travelers do pay higher rates for better experiences—for the five-head showers, the flat-screen televisions and the superb customer service. While Minneapolis hasn’t grown in occupancy rates in recent years, since 2003 it has grown by double-digits in room rates. Boutique hotel brands such as Starwood and Westin took notice. “[Those higher room rates] basically help substantiate these new hotels that are coming into the marketplace,” says Graves.

Besides high room rates, Graves credits another reason for the hotel boom throughout the entire Twin Cities area. In today’s economy, a limited number of options exist to developers when it comes to building on the land they own. Condo developments have saturated the cities while additional office and retail space, particularly in either downtown, has also remained unoccupied. So they build hotels. “The only thing we can really hope for is that these hotels continue to charge high rates,” Graves says.

“Then if everyone takes a hit of 2 to 4 percent occupancy, we’ll all increase rates accordingly to hold our revenues.”

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Where Have All the Resorts Gone?

Fewer lakeside getaways exist, but after some strategic tweaks,
those that remain often thrive.

Many Minnesotans have fond memories of spending summers “up north.” We stayed at the same cabin at the same resort on the same lake every year, playing with other kids we only saw when we were at the lake. Families passed down these traditions, making resorts in northern cities such as Alexandria, Grand Rapids and Brainerd popular destinations for local and out-state travelers alike.

While frequented by families, these resorts are run by families as well. Forty years ago, more than 2,500 resorts existed in Minnesota. Today that number hovers around 900, though Minnesota still has more resorts per capita than any other state. In recent years, many resort owners across the state have found that the business value of their property has not kept pace with the land value. With such high taxes, some owners have been left with no choice but to sell or lease back to rent.

Today’s vacationers seek out more luxury resorts than past generations (who may have been just as happy with a fishing shack). For resort owners, this means paying for improvements to cabins and properties, expanding or adding RV sites. However, these changes may end up being restricted by zoning regulations and other state or county ordinances, says Joe Martin, owner of Big Foot Resort in Alexandria. “Many resorters decided that with what their property was worth, selling or developing the property was much more appealing than trying to get improvements passed.”

For the resort owners who have decided to stay in the game, the game has changed. “Owners have to be just as techno savvy as handy,” says Dave Langhoff, a second generation owner of Shady Rest Resort in Alexandria. “They need to know about the Internet, search engines, wireless connections, business plans, retirement planning and health care plans, as well as unplugging toilets, where the fish are biting and how to get fish hooks out of trees.”

Finally, once a resort owner educates himself on all of the above, he has to think about marketing. The family vacation has changed. Kids don’t talk about “going up north” anymore, because their parents take them to Disney World or Europe instead. When families do make the trip north, they’re looking to get their money’s worth. “More and more, I see kids bringing video games up to the cabin instead of fishing poles,” says Langhoff. “Resorts have seen these changes and many are offering computer classes, gaming events, environmental classes and nature hikes.”

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Casinos

More than just slot machines and blackjack

In 1988, the United States government passed the Federal Indian Gaming Regulatory Act, allowing Native Americans to build casinos on reservations across the country. Currently, Indian gaming occurs in 28 states, with nearly 20 casinos in Minnesota. Casinos such as Grand Casinos Hinckley and Mille Lacs, Mystic Lake and Treasure Island add to the state’s hospitality climate by offering event space, affordable hotel rooms, inexpensive (but tasty) food and entertainment, all at one site. When first built, these casinos also offered new reasons to visit some of Minnesota’s rural communities.

Judy Cain, executive director of the Mille Lacs Area Tourism Council, doesn’t have just one city to promote; she markets every little town that falls within Lake Mille Lacs’ 80-mile circumference. That includes Grand Casino Mille Lacs, which sits on the lakes near Onamia. For Cain, the addition of the casino was a mixed blessing. On one hand, the casino has become its own destination, while the rest of the area is just something to see on the way. Groups from the Twin Cities hop on a bus, get off in front of the casino, play their roll of quarters, hop back on the bus and motor out of town.

“I’ve been trying to work with the casino to get those people somewhere else,” Cain says. “Bring them out here where the rest of us live, and at least expose them to the lake, the hiking trails and the two state parks. We’re trying to lure people up here to fish, stay with their families, create some memories and take photos for their photo albums, but now a lot of the traffic goes straight to the casino and straight back home.”

On the flip side, for those who are in the area to take part in non-casino activities, the venue is an asset. “If the fish aren’t biting or the wind is blowing or it’s storming and people can’t go out and fish, they can always go to the casino,” she says. “And, they aren’t leaving the area.”

Economically, the casino is a definite benefit for the band and the community. With the income the band receives, it has been able to add to the cultural landscape in the Mille Lacs area. The Minnesota Historical Society opened an Indian museum across the street from Grand Casino, while the band built a new government center and new schools right down the road. “Visitors can get a picture of what [Native American life] is like today, plus what it was like 100 years ago, all in one trip,” Cain says.

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The Conscientious Consumer

Making a difference with our hospitality spending

Between Al Gore’s Oscar-winning An Inconvenient Truth and the rising cost of gas and search for alternative energy, environmental issues have captured our attention. While cost still plays an important part in our decisions, other concerns are slowly changing our habits as well. Shopping, dining, commuting and even selecting sites for events are decisions that are being made with an awareness unlike before. Whether we’re the consumer or the producer, our actions affect our future.

We boycott products or retailers that neglect the environment (think tuna vs. dolphins) and reward those that remain good global citizens (buying from companies that support a cause close to our hearts). Companies change to keep our business and improve their image, many practicing conscientious capitalism: when businesses can make money while still making a difference.

We see changes across the hospitality industry, from meeting planners posting handouts online to hotel chains using nature-friendly cleaning products. Other local examples include:

» Red Stag Supper Club
The first LEED-CI-certified (Leadership in Energy and Environmental Design-Commercial Interior) restaurant in Minnesota, the Red Stag Supper Club in Minneapolis uses LED lighting throughout. Booths, chairs and flooring were constructed with salvage materials. Plus, the kitchen composts leftover food.

» Ivy Spa
The spa at the new Hotel Ivy offers hemp robes and linens, certified organic products, and decorates with cork and teak furnishings and bamboo flooring—all renewable resources.

» Metro Transit
Already in the business of ride sharing, Metro Transit owns 22 hybrid-electric buses on the road today, with 45 more set to hit the streets by August and more than 150 added by 2012. Using a 20 percent soy ester diesel blend, these hybrids maintain 22 percent better fuel mileage and give off 90 percent fewer emissions, saving Metro Transit $6,000 per bus each year.

As years pass, we consumers will worry more about our health, our environmental footprint and the earth we’re leaving for our children, and the industry will follow. Currently, the national marketplace for goods and services focused on health, sustainable living, the environment and social justice reaches $210 billion, according to Lifestyles of Health and Sustainability (LOHAS). The more businesses and industry professionals offer consumers in terms of sustainable living and working, the more they will expect and the more the marketplace will change.

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