Line 3 workers boost lodging tax revenue in northwestern Minnesota over the summer
In August, the Thief River Falls visitors bureau received almost double the lodging tax revenue from August 2020.
THIEF RIVER FALLS – Last year, Enbridge estimated the Line 3 replacement project would bring 1,200 workers to the Thief River Falls area between January 2021 and the completion of the project, said Laura Stengrim, executive director of Visit Thief River Falls.
The project to install the $2.9 billion pipeline came at a time when many hotels in the region would otherwise still be struggling to fill rooms during the COVID-19 pandemic. Now, at the end of the project, Visit Thief River Falls is reaping the benefits of a summer of full hotels.
Visit Thief River Falls is the convention and visitors bureau of the Pennington County community. It is fully funded by the city’s 3% lodging tax collected from visitors staying in Thief River Falls’ seven hotels and campsite. Minnesota state law allows cities to impose a lodging tax of up to 3% on short-term lodging, which is collected by the city and used to fund the city’s convention or visitor’s bureau for tourism.
In August, the organization received almost double the lodging tax revenue from August 2020. Stengrim said that after seeing extremely low lodging tax revenue during May, June and July of 2020, August 2020 was closest to average revenue numbers in the past.
“When we got the revenue information for August 2020, we were very pleased to see that visitation was somewhat bouncing back to our average figures,” said Stengrim. “So fast-forward a year to see that August 2021 is almost double that of August 2020."
It's a rebound that she calls "absolutely incredible.”
Visit Thief River Falls uses the money from lodging taxes to market the town to potential visitors, and this summer’s extra funds have allowed the organization to expand its marketing strategies. The organization has partnered with Explore MN for several cooperative marketing campaigns to attract new visitors to the town as the pandemic subsides.
This summer’s revenue also allowed Visit Thief River Falls to purchase a subscription to a software program that allows the organization to collect data from visitors. The software, called Datafy, is used by destination marketing organizations across the country. It uses GPS and cell phone data from various apps on people’s phones to identify where visitors are coming from, their age, household size and places they visit. Organizations like Visit Thief River Falls can use this information to target marketing campaigns to specific audiences.
While the Line 3 Pipeline replacement project continues to draw criticism for its environmental impacts , Stengrim says Visit Thief River Falls is supportive of any project that will bring visitors to the community.
“The influx of visitors we have had this year has allowed our hotels and restaurants to stay open after 2020, and it also has allowed our organization to try new and creative marketing initiatives that we haven’t been able to afford until now,” said Stengrim.
With 458 hotel rooms and 147 campsites, Thief River Falls could not host all of the 1,200 workers Enbridge estimated would come to the area, meaning other towns in the region saw increased numbers of visitors over the summer. In August, Explore MN reported that 92% of overnight lodging businesses in northwest Minnesota reported somewhat higher or significantly higher revenue in summer 2021 compared to summer 2020.
Crookston saw an increased number of visitors over the summer, and Nell DeBoer, chair of the Crookston Visitors Bureau, said most of these visitors were pipeline workers and their families staying in town. The Crookston Visitors Bureau is in its first year of operation, so DeBoer does not know how lodging tax revenue compares to previous years, but she does know pipeline workers had an impact on the local economy.
“With COVID, a big part of our hotels staying open and staying alive was because of the pipeliners,” said DeBoer.
According to DeBoer, hotels in Crookston did not price-gouge room rates, which drew more workers to stay in the town.
Enbridge announced the substantial completion of the pipeline on Sept. 29, and Stengrim says she has been notified that most of the pipeline workers have left the Thief River Falls area. While the economic benefit of the workers was temporary, Stengrim says using the revenue from workers to expand marketing and pay for the new software will help Visit Thief River Falls continue to attract more visitors.
“You can think of our revenue as a constant cycle – visitors paying in lodging tax to our organization, and then us using that to market to additional visitors,” said Stengrim. “The more money we have to work with, the more creative and bigger reach we can have.”