- More than half report lower revenue than last spring.
- 63 percent say profits fell year over year in Q1 2026.
- Half of businesses expect lower profits this summer.
"Consumers seem to be holding their discretionary spending close to their chests in light of inflationary pressures and alarming concerns about the future," wrote the owner of a central Minnesota resort.
Nearly 60 percent of respondents said wholesale prices rose 5 percent or more since the same period last year. But, only a third raised their own prices by the same amount, worried that passing on the full increase would send customers elsewhere. Over 60 percent said tariffs hurt their business over the last six months, adding another layer of pressure on already tight margins.
Minnesota's new paid leave policy, which came into effect in January, also was a factor. More than 60 percent said it increased administrative time and operating costs. Roughly 40 percent saw employee absences rise as a result, making it harder to keep shifts covered. Finding staff for skilled roles remained particularly difficult, with most businesses hiring mainly to replace turnover or fill seasonal gaps rather than to grow.
A campground owner in northwest Minnesota said that it was easy to hire non-skilled workers, but skilled positions were hard to fill.
Wage growth did slow a little compared with last year. Around 21 percent of respondents raised wages by 5 percent or more over the year, down from 36 percent that did so the year before. But that moderation has not done much to ease the overall cost burden.
An accommodation owner in northeast Minnesota said that with rising gas and diesel prices, and Canadians staying away, they were not very optimistic about the current season's potential.
Looking ahead, half of businesses expected profits to come in lower than last summer and only about 15 percent expected any growth.
U.S. Immigration and Customs Enforcement’s “Operation Metro Surge” cost Minnesota’s leisure and hospitality sector an estimated 4,600 jobs and $71 million in wages, according to a new study.
The analysis by Aaron Rosenthal of North Star Policy Action and Aaron Sojourner of the W.E. Upjohn Institute for Policy Research suggests the Trump administration’s deportation agenda is weakening the labor market for both immigrant and native-born workers.
