Mom-and-pop resorts dwindle across Minnesota

Hundreds of people are spending this Memorial Day weekend at Grand View Lodge on Gull Lake north of Brainerd. It's been a vacation spot in Minnesota for more than 90 years.

Grand View has seen big changes over the years. When general manager Mark Ronnei started as a resort 32 years ago, Grand View had 70 summer employees. Today, there are 700.

Ronnei, 52, said the resort has grown to stay competitive. He said it's tough for the small, mom-and-pop resorts to keep up.

"The development costs are so high that they're still disappearing and they will continue to disappear," he said. "I would say that, 10 years from now, instead of the thousand that we had three or four years ago, we'll be down to 500."

Mom-and-pop resorts in Minnesota used to be the backbone of summer tourism, but they're disappearing fast. Since the industry's peak in 1970, the number of resorts in the state has fallen by nearly 70 percent.

Minnesota resorts that survive have done so by modernizing facilities and adding amenities like swimming pools, golf courses or conference centers, Ronnei said.

Some resorts have turned to new management models to stay in business. One that's become popular is a shared ownership model. Individual cabins are sold off, but when the new owners aren't there, the cabins are managed in a pool and rented to the public.

Ronnei said the resort business has become much more competitive, especially for the mom and pop businesses. The latest wave of competition is coming not from other resorts, but from homeowners who rent out their property.

"There's probably 500 houses for rent in Minnesota right now that are unlicensed, available by the week and that are being rented through various websites," Ronnei said. "And that's the end of the small resort. That right there is the number one factor that's leading to the demise of the small resort."

The recent recession has also been tough on resorts. About 50 have shut down in Minnesota since 2007. Last year, many resorts reported that business was either flat, or down anywhere from five to 20 percent.

Still, there's reason to be more optimistic about the upcoming summer season, said John Edman, director of the Explore Minnesota tourism office.

"I am very confident that we will have a better year in 2010 than we had in 2009 across the board in travel and tourism in Minnesota," Edman said. "And I believe that resorts will be one of the beneficiaries of the slight turnaround, because ... there's a pent up demand for people to travel. People still want to get away.

It will be increasingly rare to get away to small vacation spots like Idlewild Resort, nestled on the shore of Lake Marquette just south of Bemidji. The small resort, which has been there for nearly 50 years, has only three cabins. But families have been coming back for generations.

Janet Christiansen's in-laws bought Idlewild in 1963. She and her husband Gary took over seven years ago, though Gary has a full-time job outside the resort.

Christiansen and her husband have invested lots of money maintaining the aging cabins. But she said it's been worth it.

"Even though it's a lot of work and we're not really making a lot of money doing it, we get to live here," said Christiansen, 52. "We get to live on the lake and we get to go out and play on the water whenever we want. So that's our payoff."

The main reason resorts like Idlewild are disappearing is because of rising lakeshore values. Small resort owners find it's often more lucrative for them to sell off to developers than stay in business.

Christiansen says it's unlikely Idlewild will be around much longer, either. She and her husband will run the resort as long as they can. But unless one of their children takes over, they'll eventually stop renting out cabins.

For now, Christiansen says she has no interest in selling to a developer.

"I think when the ma-and-pa resorts sell off, it is for the money," sahe said. "But for us, I think, even if someone came in here and offered us a huge amount of money, I don't know that we'd take it... We just like it here."

The recent recession has slowed down the lakeshore land grab. That means there may be fewer small resorts sold off to private developers, at least for the moment. But observers predict the decline in the number of resorts will continue for years.

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