Hospitality Industry Faces Tough Times In Minnesota

Is Minnesota's hospitality industry on the brink of death?

A new report by Hospitality Minnesota says that the industry is 'on the brink of no return' due to factors like the pandemic, federal actions, locality responses and consumer reactions.

Hospitality Minnesota says 'the current economic environment is not sustainable,' adding that businesses are 'finding it increasingly hard or impossible to navigate regulations, consumer dynamics and politics.'

HOW MANY PEOPLE WORK IN THE HOSPITALITY INDUSTRY

The hospitality industry employs approximately 230,000 employees in Minnesota and boasts nearly 13,000 businesses. While Central Minnesota saw a .5% increase in those employed by the hospitality industry, Bloomington saw a 4.3% decrease and Minneapolis saw a 6.6% decline.

The current weekly wage average for a worker in the hospitality industry is currently $535.67, which is up from $517.67 in 2024. That adds up to nearly $5 billion industrywide.

BUSINESSES LOSING MONEY 

Currently 48% of hospitality businesses report negative financial health, which is up 16% year-over-year. On top of that, 56.8% of Minnesota hospitality businesses reported a lower profit in 2025 when compared to 2024.

92% of those businesses say they are facing price hikes and 80% say they have been forced to raise prices in the last year.

In addition to the volatile markets, customer traffic is also down at the same time, with 46% of hospitality businesses reporting lower customer traffic year-to-year.

FIXING THE CRISIS 

Hospitality Minnesota offers a few short-term solutions in its report. The first is a restructuring of service fees. Hospitality Minnesota says that exempting hospitality businesses in the state would allow for increased flexibility.

Second is a reform in the tip-pooling process, which would 'address a long-standing inequity' between front-of-house staff and back-off house staff.

The third is a reform of 'swipe-fees' or credit card interchange fees. Hospitality Minnesota says these transactions cost Minnesota hospitality operators 'millions of dollars per year.'