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An Initial Assessment of Minneapolis As a Tourist Destination

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AN INITIAL ASSESSMENT OF MINNEAPOLIS AS A TOURIST DESTINATION Kevin Hanstad March 11, 2016 TABLE OF Background & Objective Executive Summary CONTENTS The Visitor The Visitor Experience Accommodations Arts & Cultural Institutions Attractions, Sports & Recreation Branding Events Marketing & Promotion Meetings & Conventions Natural Resources Neighborhoods Restaurants, Nightlife & Retail Transportation & Wayfinding Appendix 2 BACKGROUND The key strategic initiative of Meet Minneapolis in 2016 is the development of a & OBJECTIVE tourism master plan. A tourism master plan (TMP) is a long-term (10 - 20 year) strategic plan to develop the tourism industry in a city, state or nation to drive economic impact for the benefit of the community. One of the first steps in the development of a TMP is an assessment of the locale as a tourist destination. The objective of this document is to report an initial assessment of the city of Minneapolis as a tourist destination leveraging data already in-hand. 3 Minneapolis-St. Paul welcomed 30.9 million visitors in EXECUTIVE 2014, an all-time high. SUMMARY They spent $7.4 billion. Three out of four originate from Minnesota, Wisconsin, Iowa or the Dakotas. Seventy percent visit for leisure purposes. Their primary reasons for visiting are sports, family events, shopping and “social consciousness” (volunteerism, religious conferences, eco-travel). On average, the visitors make 9.2 visits over a three- year period. They rate the quality of their visit to be very high overall, especially the arts & entertainment, nature & parks, restaurants, shopping and nightlife. There is less satisfaction with hotel quality. 4 Minneapolis is currently at a disadvantage relative to its EXECUTIVE peer set on the number of downtown hotel rooms. SUMMARY However, 1,500 new rooms are coming online within the next two years, albeit a distance from the convention center. airbnb represents about a 2.5% share of the downtown hotel market. Minneapolis provides a rich arts and cultural offering, but the museums, theaters, concerts and dance companies are under-utilized by visitors. Likewise, sightseeing is a less frequent activity of visitors, likely related to the limited number of attractions in the city. Sports is king for Minneapolis visitors – professional as well as participatory - including winter sports. The City by Nature brand is now four years-old, but with a very limited marketing spend, awareness of Minneapolis as a destination remains a challenge. 5 The number of public events in Minneapolis is also EXECUTIVE limited with two-thirds occurring in the summer months. Meetings and conventions are robust, breaking 600 in SUMMARY number for the first time in 2015, and supported by a vital convention center operating at 57% annual occupancy. The Minneapolis park system, one of the best in the country, is underutilized by visitors. The charm of Minneapolis neighborhoods is best represented by Northeast and Uptown, but an understanding of visitors’ appreciation for them is lacking. Another challenge is retail; however, the expectation is that it will follow the significant downtown residential development. Truly, the emerging restaurant scene is hot among “foodies”, but appears to remain an opportunity among visitors. The LRT is well-regarded by visitors and used by as many as four out of ten of them. 6 EXECUTIVE Opportunities Increase awareness of Minneapolis as a destination SUMMARY Consider the creation of an “iconic” attraction Attract visitors beyond the five-state area Increase visitors use of . Attractions . Museums, theaters, concerts & dance . Parks . Restaurants . Retail . Tap rooms Develop events Leverage SPORTS Improve wayfinding Gain an understanding of neighborhoods appeal to visitors Grow the advertising spend Address hotel quality perceptions and proximity to the convention center 7 THE VISITOR 8 30.9 MINNEAPOLIS- 29.4 27.9 ST. PAUL 26.8 VISITORS 25.3 (MILLIONS) 2010 2011 2012 2013 2014 Source: D.K. Shifflet & Associates, Ltd. 9 2014 METROPOLITAN AREA VISITORS Sources: D.K. Shifflet & Associates, Ltd. and Respective DMOs 10 36.8 MEET 34.8 MINNEPAOLIS 32.9 30.9 29.4 GOAL: 27.9 26.8 36.8 MILLION 25.3 VISITORS IN 2017 2010 2011 2012 2013 2014 2015 2016 2017 Sources: D.K. Shifflet & Associates, Ltd. 2010-2014 Meet Minneapolis 2015-2017 11 $7.4 MINNEAPOLIS- $6.9 $7.1 $6.5 ST. PAUL $5.9 VISITOR SPENDING (BILLIONS) 2010 2011 2012 2013 2014 Source: D.K. Shifflet & Associates, Ltd. 12 2014 VISITOR Entertainment Other & Recreation 2% SPENDING 9% Food & Beverage BY 28% CATEGORY Shopping (EXCLUDING AIRFARE) 18% $6.6 BILLION Lodging 18% Ground Transportation 25% Source: D.K. Shifflet & Associates, Ltd. Person-Days Based, n = 1,448 13 VISITORS: 30.9 MILLION VISITORS Business AND 28% SPENDING BY TRIP Leisure 72% PURPOSE (2014) VISITOR SPENDING: $7.4 BILLION Business 31% Leisure 69% Source: D.K. Shifflet & Associates, Ltd. 14 PLANNING Planning Time Frame TRIP 21% 20% TO MSP 19% 15% 11% 9% 2% 2% 2% Same Less 1 Week 2-3 1 Month 2-3 4-5 6 More Day Than 1 Weeks Months Months Months than 6 Week Months Source: D.K. Shifflet & Associates, Ltd. 2014 Stays Based; n = 1,421 15 PLANNING Resources Used TRIP None 48% Friend/Family Recommendation 16% TO MSP Google Maps, MapQuest, Etc. 14% Google, Yahoo, Bing, Etc. 12% Hotel Chain Websites 7% Expedia, Priceline, Etc. 5% Attraction Websites 4% Destination Websites 3% Printed Visitor Guides 3% TripAdvisor, Yelp, Etc. 2% Online Visitor Guides 2% AAA Travel Guides 1% Facebook, Twitter, Etc. 1% Source: D.K. Shifflet & Associates, Ltd. 2014 Stays Based; n = 1,439 16 MO 1% OK 1% STATE OF FL 1% Other CA 2% 10% ORIGIN NH 2% NE 2% IL 3% MN 45% ND 5% SD 6% IA 7% WI 15% Source: D.K. Shifflet & Associates, Ltd. 2014 Person-Stays Based, n = 1,509 17 CITY OF ORIGIN Other 23% MSP 39% Green Bay Milwaukee 2% 2% Boston 2% Rochester 2% Chicago 3% La Crosse 3% Duluth 3% Sioux Falls Madison Des 6% 5% Moines Fargo 5% 5% Source: D.K. Shifflet & Associates, Ltd. 2014 Person-Stays Based, n = 1,506 18 SPENDING Fargo $666 BY CITY OF Chicago $661 ORIGIN Sioux Falls $444 Milwaukee $382 Madison $342 Des Moines $340 Green Bay $316 Duluth $261 Rochester $208 La Crosse $161 MSP $127 Source: D.K. Shifflet & Associates, Ltd. 2014 Average Party Per Stay Spending Stays Based, n = 4,490; 2012 - 2014 19 LENGTH OF Day Trip 50% STAY One Night 22% Average Among Overnight Two Nights 14% Visitors: 2.3 Nights 3 Nights 6% 4+ Nights 8% Source: D.K. Shifflet & Associates, Ltd. 2014 Stays Based, n = 1,512 20 Other 1% ACCOMMODATIONS Non-Paid 34% Hotel 61% Paid Non Hotel 4% Source: D.K. Shifflet & Associates, Ltd. 2014 Person-Stays Based, n = 969 21 27% 26% ACTIVITY 22% PARTICIPATION 19% 6% 5%5%5%5% 4%4%4%4% 3%3%3%3%3%3%3%3% 3% 2%2%2%2%2%2% 1%1%1%1%1%1%1%1%1%1%1% Source: D.K. Shifflet & Associates, Ltd. 2014 Stays Based, n = 1,512 22 238 ACTIVITY PARTICIPATION 171 161 INDEXED TO 146 141 135135 129 TOTAL U.S. 120 110108 105 104102 99 97 95 88 87 87 87 85 82 79 78 76 62 59 57 54 51 51 46 43 38 36 36 34 32 28 26 15 7 Source: D.K. Shifflet & Associates, Ltd. 2014 Stays Based, n = 1,512 23 Millennials Gen Xers Boomers 55 ACTIVITY Amateur Sports 124 106 PARTICIPATION 159 Wedding 34 INDEXED TO 114 ALL MSP 214 Winter Sports 107 0 VISITORS BY 100 Professional Sports 138 GENERATION 81 72 Festivals/Fairs 100 122 97 Reunion/Graduation 48 131 86 Shopping 93 122 Source: D.K. Shifflet & Associates, Ltd. 2014 Stays Based, n = 1,512 24 SPENDING Golfing $854 Wedding $711 BY Professional Sports $701 ACTIVITY Reunion/Graduation $674 Shopping $619 Festivals/Fairs $527 Hunting $524 Amateur Sports $475 Volunteerism $473 Winter Sports $455 Eco Travel $409 VFR $400 Biking $326 Religious Conference $259 Business $170 Source: D.K. Shifflet & Associates, Ltd. 2014 Average Party Per Stay Spending Stays Based, n = 4,478; 2012 - 2014 25 NUMBER OF One 29% VISITS IN PAST THREE Two to Three 18% YEARS Four to Nine 23% Average: 9.2 Ten to 19 71% Repeat 16% Rate (67% U.S. Average) 20+ 14% Source: D.K. Shifflet & Associates, Ltd. 2014 Person Stays Based, n = 969 26 INTERNATIONAL VISITORS TO MINNEAPOLIS 238,000 221,000 187,000 179,000 2011 2012 2013 2014 Source: National Travel and Tourism Office, U.S. Department of Commerce 27 MINNEAPOLIS INTERNATIONAL VISITORS BY COUNTRY OF RESIDENCE 2014 12% 10% 8% 7% 7% 5% 5% 5% 5% 4% 3% 3% 2% 2% 2% 2% 1% 1% Source: National Travel and Tourism Office, U.S. Department of Commerce Countries of Less than 1% Not Displayed n = 877 28 MINNEAPOLIS INTERNATIONAL VISITORS ACTIVITIES Shopping 85% Sightseeing 57% Small Towns/Countryside 41% Experience Fine Dining 40% National Parks/Monuments 30% Historical Locations 29% Art Galleries/Museums 25% Amusement/Theme Parks 24% Sporting Event 19% Guided Tour(s) 15% Nightclubbing/Dancing 15% Concert/Play/Musical 15% Cultural/Ethnic Heritage Sights 13% Water Sports 9% Casino/Gamble 8% Golfing/Tennis 7% Camping/Hiking 6% American Indian Communities 6% Hunting/Fishing 5% Snow Sports 3% Environmental/Eco. Excursions 3% Other 3% Source: National Travel and Tourism Office, U.S. Department of Commerce n = 676 29 Average Spend Average Per Party Number of MINNEAPOLIS Nights Stay VISITORS: 9.2 INTERNATIONAL $2,056 VERSUS DOMESTIC $618 2.3 International Domestic International Domestic Sources: National Travel and Tourism Office, U.S. Department of Commerce (n = 417 and 731 Respectively) D.K. Shifflet & Associates, Ltd. 2014 (n = 1,512) (Two Nights Stay and Overnight Visitors Only Respectively) 30 MINNEAPOLIS INTERNATIONAL VISITOR PROFILE Visit Purpose Gender Top Activities 45% 55% 42% 58% 1.
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