Photo courtesy of Grand View Lodge

"Real estate taxes are killing small resorts," said Paul Welch, general manager of Grand View Lodge in Nisswa. "[Resorts] have two options: they can sell out and turn their cabins into condos, or they can turn to managed properties."

Photo courtsey of Grand View Lodge

Managed properties are accommodations that are built by the resort, then sold to an investor. The unit is returned to the rental pool and the resort manages the unit as part of its property. The investor, in return, gets a portion of the profits from renting the unit. Grand View Lodge currently manages approximately 75 properties. Cragun's and Ruttger's also manage several units. Smaller resorts, such as Piney Ridge and Heath's Resort, both in Pine River, are beginning to consider the possibility of switching to managed properties.

"Managed properties are the only way to survive," said Dutch Cragun, owner of Cragun's Resort on Gull Lake. "There's no two ways about it."

Managed properties, also known as alternative ownerships, are supported on a legislative level as well. "We're very supportive of an idea that allows resorts to stay there and also allows for public access to the lakes," said Joel Carlson, lobbyist for the Congress of Minnesota Resorts.

Photo courtesy of RuttgerÕs

There are other factors that are vital to the future of a resort. According to Welch, if a resort is going to compete in the ever-changing market, they have to be willing to transform their operation strategies.

"You're constantly changing how you do business to meet the needs of guests," Welch said. "If you don't change how you do things to meet guests' needs, you'll fall by the wayside."

For bigger resorts, this can involve large-scale renovations and additions. Welch cites several changes Grand View has made in recent years, such as building a pool, spa, and various golf courses. They are also looking at expanding to add more units and an outdoor pool, starting a new resort called Mission Lake Lodge, and renovating some existing accommodations.

Ruttger's, located near Deerwood, is also undergoing some significant enhancements. "We're embarking on a major change," said Assistant General Manager Todd Bymark. By 2007, Ruttger's plans to add 48 more units to the main property, build a new "grand" lobby, pool, and activity center as well as renovate the existing conference center.

"If we want any kind of future, we need to make improvements," Bymark said. "We need to re-invest in the resort. Our guests are changing, demanding more in the way of technology, activities, etc. In order to meet guests' needs, we're constantly renovating. We're driven by guest comments."

Resorts also have to compete with the ever-changing market and economy. "The resort market and the economy throw curve balls at you and you don't know what to expect next," said Bymark. "You have to constantly change your marketing avenue. Finding the perfect avenue is a challenge because there's so much out there for people to do."

Photo courtsey of RuttgerÕs

In the past, there was a need for golf in the area so several resorts decided to build courses to meet the demand. These included Cragun's and Grand View, among others. "Competition was fierce because there was lots of golf in the area," said Cragun.

Welch says that sometimes the resorts over meet the needs of guests. "For a while, the area was over built with too much golf. There were more courses than customers." Recently, resorts have had to deal with the changing face of vacations. Guests are no longer booking weeklong stays.

In 2005, the Minnesota Department of Employment and Economic Development found that Minnesotans traveling within the state stayed an average of three nights while non-Minnesotans stayed an average of four nights.

In a survey conducted by the Minnesota Resort and Campground Association, school sports was one of the top items cited as a reason for business decline.

"Short vacations are for families involved in sports because they don't want to miss a practice and get punished for it," the report quoted one resort owner as saying.

Local resorts agree. "We have a lot of last minute decisions on vacations," said Bymark. "It's because of the summer schedules with kids. Once they determine that [schedule] they can build a vacation around it."

"We used to be seven night stays or nothing," said Welch. "We changed because we wanted to be flexible and accommodate everyone."

Meanwhile, smaller resorts are finding their own ways to please guests. Many have kept their weeklong stays, such as Heath's Resort in Pine River or Beacon Shores in Crosslake.

"We try and change and do what we can to meet guest needs," said Karen Scholz, owner of Beacon Shores. "We want to maintain it as a smaller resort."

Beacon Shores recently tried to put wireless Internet and cable TV in each of the cabins. "We asked our guests and most of them said they didn't care. Most guests want the small," she said. "They don't want the wireless or the cable."

While needs may vary, resorts large and small have a similar passion: their guests.

"The best part of running a resort is meeting the families and getting to know them," said Scholz. "We become part of their family and they become part of ours."

"I love to sit in the lobby and watch," said Welch. "All the guests have a story. They all want something different from the resort."

"I hope we'll be able to continue attracting people," said Bymark. "Ruttger's has a 'feels like family' atmosphere. Every resort has a unique thing, an individual niche. Different resorts have different feels."

Carlson also cites the importance of keeping resorts alive. One of the reasons is that resorts serve as an access to numerous Minnesota lakes. "Without the resorts," Carlson says, "we'll become the land of 10,000 lake accesses."

"[Resorts] are a quality of life," he continues. "The stories of people coming up in the Minnesota summer, of fishing, swimming, water skiing ... you can't trade those."