The mom-and-pop resort, that staple of Minnesota lake life, is becoming harder to find. Since 1970, the number of resorts in Minnesota has dropped by more than 50 percent. Industry observers say the main reason is the cost of lakeshore real estate. A price boom has made it more lucrative for small resort owners to sell off than stay in business. The phenomenon is changing the way tourists vacation in the Land of 10,000 Lakes.
For the owners of Forest View Resort in northern Minnesota, it was an offer too good to pass up. Forest View operated on Leech Lake for more than 50 years. But when a Florida developer offered to buy the resort last year, the Kinder family said yes. Neill Kinder grew up in the family business.
"Anytime you part with something that's been in the family for that long, obviously there's pangs of emotion. But under the circumstances it was the right offer at the right time and we accepted it, so we must have been happy with it," said Kinder.
Kinder says the resort will be carved into about 28 lots. Those with shoreline property will sell for up to $800,000. Neill Kinder says high taxes and skyrocketing land prices are making family-operated resorts go the way of the dinosaur.
"I think most of them are facing the same thing that farmers around a big city face," said Kinder. "Eventually, the land value of the resort far exceeds the business value as an operating business. No one can come in and buy it and operate it as a resort, and pay the amount of money that it's worth just as a development property. And it's sad that that is the case, but it's ultimately the way things are going."
The market value of lakeshore property in some parts of Minnesota has tripled in just the past decade. Realtors predict the trend will continue. Chris Galler, senior vice president of the Minnesota Association of Realtors, says the market is being driven by wealthy baby boomers looking for good retirement investments.
"I know a gentleman that recently bought a house for $400,000, and knocked it down in order to build another house on that spot, because he wanted that spot on the lake. And he knew that it was limited. So I think you'll start to see that in a number of areas," he said.
Rising lakeshore prices are not the only reason for the decline in resort numbers. Resort vacationers today are different than a few years ago, according to Randy Ruttger, who owns Ruttger's Birchmont Lodge on Lake Bemidji.
Ruttger says vacationers are booking shorter stays and want more amenities. He says catering to those needs is more expensive for the resort operators. Ruttger says he's concerned the average Minnesotan is being squeezed out of having an affordable lake experience.
"I think most of them are facing the same thing that farmers around a big city face. Eventually, the land value of the resort far exceeds the business value as an operating business...It's sad that that is the case, but it's ultimately the way things are going. "
- Neill Kinder, former resort owner
"They are closing off to the local people," he said. "You've got all your public water accesses, and there's more motels in Bemidji than ever before...but the coming up and spending a week at the cabin - that's just going to disappear, because the cabins are disappearing."
Officials with the Minnesota Office of Tourism say fewer resorts will affect tourism. Carol Altepeter, director of the agency's regional office in Brainerd, says resorts bring about $9 billion into the state each year. Altepeter says it's not all gloom and doom for the industry. There are still plenty of options out there.
"We're not at 100 percent occupancy in all of the resorts in Minnesota, so there still is a lot of choices for people out there. And when we reach 100 percent occupancy, then that will be a big worry as to where do the rest of the people go," Altepeter said.
While plenty of vacationers are still staying at family-operated resorts, the lodging industry is seeing growth in other areas - more hotels, more casino resorts, more bed and breakfasts, and a growing industry catering to recreational vehicles.
Some realtors expect the lakeshore landgrab to continue until around 2010, when most baby boomers start to retire. They say the sell-off of small resorts will continue as well. The University of Minnesota, the Office of Tourism and other groups are hoping to begin a year-long study of the resort industry later this year.More from MPR