DULUTH — Madden Media made its debut during Visit Duluth’s Tourism Industry Update on Jan. 29 at the Duluth Entertainment Convention Center.
The city’s selection of the Arizona-based marketing firm over local firms was controversial.
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“Lost in all the discussion at the end of 2024 was perhaps the most significant news. … Getting tourism out of City Hall and returning it to where it belongs — a healthy, strong and vibrant DMO (destination marketing organization),” Mayor Roger Reinert said during the event.
Duluth’s new destination marketing partner hit the ground running on its two-year, $3.2 million contract by immersing a handful of its team members on a tour of the Northland, with DECC Executive Director Dan Hartman as their guide.
After the two-year contract with Madden Media is up, Reinert said the next multi-year operating agreement with a destination marketing organization will not be “aligned with elections or mayoral terms.”
Visit Duluth, meanwhile, will continue its search for a new executive director while maintaining a focus on meeting and convention sales per its previous contract, according to Visit Duluth Board Chair Lynne Williams of the University of Minnesota Duluth.
Tourism generates nearly $800 million of economic activity in Duluth each year, and the 1% general sales tax is the city’s third-largest revenue source. However, Reinert said an overall decline in tourism tax revenue is projected for 2025 due to continuing inconsistent hotel occupancy rates.
Karen Pionk, general manager of the Sheraton Duluth Hotel, shared insights from the STAR Report for Smith Travel, a system used by hotels to measure occupancy, average daily room rate and revenue per available room across the industry.
The STAR Report indicated hotel occupancy from July through December 2024 was down 2% year-over-year compared to 2023. When large numbers of rooms are available, Pionk said it often results in short-term bookings. That makes it difficult for scheduling and staffing, she said, ultimately leading to high employee turnover and burnout.
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Pionk’s colleagues in the hotel industry also identified the downtown homeless population as having a strong impact on guests and associates, especially when non-guests try to access continental breakfasts or become combative when asked to leave.
“It wasn't a super strong year for hospitality,” Pionk said.
The city is prioritizing boosting its tax base by increasing a population that has remained stagnant for 60 years, according to Reinert.
“The city has a vested interest from both an economic development/public tax dollar standpoint, but we are not industry experts,” Reinert said.
According to cellphone data, 88% of Duluth’s visitors staying more than 24 hours are coming from Minneapolis.
Wellness travel and positive “vibes” are becoming increasingly more important to travelers across generations as they continue spending more money on experiences over things, Madden Media CEO Dan Janes said.
Janes outlined how the organization specializes in destination marketing, with about 10% of its efforts focused on workforce attraction and economic development.
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“We see travel and tourism as lead generation for community growth and development,” Janes said. “As we think about the first visit, that's the first opportunity that we have for somebody to consider making it their home, making it a place to start a business.”
Although the Madden team works remotely, two of its members are local. Social media strategist Hannah Ruelle relocated to Duluth about a month ago. Web content specialist Annika Spriggs lives in Silver Bay.
“So as we think about population gain, we're helping,” Janes said.
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