Minnesota's resorts spend millions to meet changing demands, stay ahead of new competitors

For decades, the family resorts of northern Minnesota held a simple appeal during the long days of summer: crisp, clean air, a place to cast a line and time untethered.

In an era of digital hyper-connectedness, to-the-minute scheduling and growing competition, that's not nearly enough for some weekenders. As the summer vacation season kicks off this weekend, resorts across the state are transforming themselves to stay competitive.

"The more you can offer, the better off you are," says Bob Cote, a third-generation owner of one of Minnesota's oldest and largest resorts, Grand View Lodge on Gull Lake near Nisswa.

Today, more and more overnighters at Grand View and other Minnesota resorts are seeking activity-filled getaways — bike rides, beach yoga, wine tastings and the like.

The Cote Family Cos. are spending $30 million to update Grand View, their nearby children's sleepaway camps and a dude ranch they own in Arizona. At Grand View, that includes several $1 million-plus cottages, Japanese soaking tubs and an activities center that includes a bocce ball stadium and pickleball court.

The expansion, the largest in the state, is a sign of changing times for the state's resorts, which are competing with private short-term rentals and overbooked family schedules. The number of resorts in the state peaked around 3,000 in the 1970s but has shrunk to fewer than 800.

"We're always looking to innovate and figure how to bring new experiences to our guests," said Abbey Pieper, whose grandfather started Madden's on Gull Lake 89 years ago.

Madden's, which was pummeled by a 2015 summer storm, recently went through a $13 million renovation. And to attract a new generation with higher expectations, it just opened two new restaurants. One features a chef from South Africa and gets fresh fish flown in several times a week. In addition to the resort's nonstop golf activities, there's a water-skiing school and a training program for those who want to fly seaplanes.

"People want to do something they don't do at home," said Pieper, who now runs the resort with her brother.

At Eddy's Resort, a longtime fishing camp on Lake Mille Lacs known mostly for its guided fishing launches, a new owner has built several more modern cabins, and a revamped gastropub-style restaurant serves gourmet flatbreads and craft cocktails.

"They're working hard to really keep up with the expectations of their guests," said Dan McElroy, president and CEO of Hospitality Minnesota.

Pat Simmons, a researcher at Explore Minnesota who tracks vacation trends across the state, said one of the most notable shifts in the industry has to do with complicated family schedules. He said that because families are more likely to have two parents working and kids in sports, finding time to commit to a week away is sometimes impossible. So resorts that offer hotel-style lodging and short-term private rentals are attracting more guests.

"The resorts that have maintained their viability tend to be the ones that have kept themselves up to date in various ways," he said.

Towering hotels, gambling

Some of the biggest resort expansions underway are happening at places McElroy calls "vertical resorts." These are typically hotels that offer gambling in areas that were once resort hot spots. Treasure Island Resort in Red Wing has a new hotel tower with 200-plus units. At Star Lake in Otter Tail County, the White Earth band of Ojibwe has long been planning a hotel, marina and small casino.

At Cote Family Cos., new Chief Executive Thomas Juliano tracks the growing competition, including private rentals on websites like Airbnb and VRBO. "Airbnb is not going anywhere," Juliano said. "Grand View's amenities help us differentiate ourselves."

Juliano was recently hired to shepherd expansions at Grand View and the company's other properties. He's worked with several upscale hotels in Vail, Colo., and Hawaii and knows that offering travelers the kinds of activities you can't get at most private rentals gives the company a competitive advantage.

Regular guest Kim Holm said she and her husband drive Up North every chance they get, often with their two children and five grandchildren. They stay in a house they bought but have enrolled in a rental program.

Though the "cabin" has a full-service modern kitchen, Holm said they rarely cook because there are so many dining options on site. And her grandkids are so stimulated after a day on Jet Skis, banana boats and bikes, there's never a chance of getting bored.

"My grandkids would rather go to Grand View than to Disney World," said Holm, who first stayed at Grand View Lodge 30 years ago.

Grand View has one edge few others can claim: a spot on the National Register of Historic Places. As the 102-year-old business enters its second century, the resort's log lodge still looks plucked from an Adirondack camp.

Soon it will add Fairway Pines, a cluster of 20 Craftsman-style houses that are being professionally designed with golf course views, an outdoor pool and a 100-yard putting course. Prices start at $500,000.

There are also 21 new four-bedroom "garden cottages that will cost $1 million or more.

The Cote family is also upgrading its Camp Lincoln, which is getting an all new indoor rec center that includes a cardio room and indoor basketball court. And at the family's Tanque Verde dude ranch in Tucson, Ariz., a new 40,000-square-foot event barn will overlook the Saguaro National Park and Rincon Mountains.

Bob Cote, whose formal role with his family company is chairman of the board, said that even as private rental ventures grow, there's still a deep well of people who want more than just a cabin by the lake.

"The question is, can you do that and continue to make money?" he said. "Some can and some can't."