Resorts brace for economic fallout

Cancellations in conference business have affected area resorts to varying degrees since the terrorist attacks, but the economic hits could continue next summer.

Much will depend on the national economy.

"I think our corporate business next summer could be down dramatically," said Mark Ronnei, Grand View Lodge general manager.

There have been three major cancellations since the terrorist attacks on Sept. 11 at Grand View Lodge in Nisswa. But a Brainerd lakes area benefit may continue to come from its location and an easy drive distance from Minneapolis and St. Paul. And the area's tourist economy could see more business coming from corporations who seek the Midwest as an alternative to coast travel.

Resorters are keeping a watchful eye on an economic downturn that could affect and reduce corporate travel altogether.

Ronnei said today the cancellations included conferences with international guests and included two of the largest groups set for the lodge this year. But Ronnei said Grand View has not lost as much corporate business.

Calls to several area resorts revealed few social cancellations from personal vacations. One couple getting married at Breezy Point Resort actually drove from California.

Ronnei said the few personal vacation cancellations came from golfers traveling to Nisswa from other parts of the nation and from families with relatives in New York City.

At Cragun's Resort, Jenelle Hewitt, conference sales director, said there had been cancellations resulting from the terrorist attacks as well as from people concerned about a potential strike by state employees.

But she said those cancellations have rescheduled for alternative dates. Hewitt said the cancellations have been a loss, but she said she did not care to discuss the economic affect. As far as air travel concerns, Hewitt said she thinks confidence will return as time goes on.

Bonnie Tweed, Breezy Point Resort marketing director, said the resort has not suffered fallout on convention business with the few cancellations being recouped by last minute bookings. Corporate groups had to replace scheduled speakers who were flying in from out of state. Tweed said state group business was not reduced.

Rob Mason, Madden's Resort director of sales, said the resort lost seven conventions this past week, including an 800-room per night hit where the speakers could not fly in. Lost conventions included a Burger King convention and an Investment Center of America convention where the participants did not want to be away when the stock market reopened in New York City.

Mason said one group said they just did not feel like partying anymore. Loss of regional conventions for national corporations was the short-term effect, Mason said. However, he added state association business has been strong.

"I hope that it was a short-term hit," Mason said.

Mason said the resort has also recently received calls from groups trying to relocate meetings to the Midwest.

"That actually could be a benefit to us down the road," he said.

Madden's is within four weeks of closing for the season. Mason said most canceled business rebooked for next year. With a slowing economy, Mason said the resort was already facing an economic hit in corporate business. He said tourism-based businesses along with everyone else are waiting to see what will happen next.

"We are all preparing for a year that is not going to be nearly what we had hoped and will be looking at how to trim back labor and maintain service," Mason said. At Madden's, Mason said about 60 percent of next season's bookings are already reserved.

"Our vacation business will be strong and may help overcome a slump in the corporate sector," Mason said.

Ronnei said Grand View's reservations for fall weekends are still strong. At Grand View, a strong summer followed what Ronnei characterized as a terrible spring. It is not going to be a banner year, he said.

Corporate business accounts for about 25 percent of Grand View's resort business.

"I think the people in the (Twin Cities) are looking to get away," Ronnei said. "... We're fortunate to have our primary market within driving distance."

Ronnei said it was hard to think about business this past week. He said the next test will come with the country's overall economic look and whether businesses will have discretionary spending for trips.

One woman who called Grand View this morning said she was just looking for a few days to get away from current events.

Ronnei said: "I believe that is something people are looking for and it's something we can provide in this area."