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Tourism Touch and Go for Wisconsin Resorts: Navigating
 an Empty Lake Delton and High Gas Prices
By Tom Daykin, Milwaukee Journal SentinelMcClatchy-Tribune Regional News

Aug. 13, 2008 - In a summertime when the livin' ain't easy for many Wisconsin tourism destinations, the Milwaukee Brewers' promising season and Harley-Davidson Inc.'s new museum are attracting vacationers to local hotels despite the difficult economy.

Occupancy rates were up at hotels in Milwaukee and Brookfield during the first six months of the year, offsetting gloomier results so far in the Wisconsin Dells -- the state's largest vacation spot -- and other areas hit by massive flooding in June.

Meanwhile, high gas prices have led to a mixed picture in Door County, the North Woods and other places where people go to escape when the temperature rises.

In all, it's been a challenging summer, the peak season for Wisconsin's $12.8 billion tourism industry. Agriculture is Wisconsin's largest industry, with an estimated $51.5 billion annual economic impact.

Business "has definitely been softer," said Harold Friestad, general manager of Lake Geneva Cruise Line, which provides boat tours of Geneva Lake, about an hour's drive southwest of Milwaukee.

Some of Friestad's corporate clients have canceled group tours, although individual ticket sales have picked up over the past three weeks, he said.

Marcus Corp., which operates hotels in Lake Geneva, Milwaukee and other Wisconsin cities, has seen a decline in group business and in corporate travel, said Bill Otto, president of the company's hotels and resorts division.

But the leisure travel business is holding up well, Otto said. In Milwaukee, where Marcus owns three upscale downtown hotels, a winning Brewers baseball season has helped strengthen demand, he said.

The Brewers, Harley's museum and other attractions are drawing more vacationers to Milwaukee, said Doug Neilson, president of vacation planner Visit Milwaukee. The city's hotels reported a collective occupancy rate of 64% during the first six months of the year, compared with 58% during the same period in 2007, Neilson said, citing a report issued by Smith Travel Research Inc.

Brookfield's hotels also have seen a boost, with June occupancy at 78.1%, up from 77.4% in June 2007, said Rod Raschka, executive director of the Brookfield Convention and Visitors Bureau.

Dells takes a hit

But Wisconsin Dells has taken its lumps.

The Dells got some unwanted national publicity in June, when flooding led to a breach at Lake Delton's dam. The lake quickly drained, leaving behind a large, muddy hole. While most of the Dells area's resorts and hotels weren't affected, news about Lake Delton led some people to change their vacation plans.

The flooding affected bookings at Great Wolf Lodge, a 436-room water park resort operated by Great Wolf Resorts Inc., said Alex Lombardo, treasurer for the Madison-based company.

The Dells-area Great Wolf property and three other older company resorts reported a collective occupancy rate of 57.9% during the three months that ended June 30. That percentage was down from 59.3% during the same quarter in 2007. The average daily room rate for those four resorts -- the three others are in Michigan, Ohio and Kansas -- was just more than $184, a 3.1% decline for the same period.

The Dells Great Wolf Lodge also was affected by regional economic issues, including job layoffs and competition with newer, larger water park resorts, Lombardo said.

At Noah's Ark Water Park, a devastating June was followed by a much better July, said Tim Gantz, Noah's Ark Inc. president. He said hotel discounts are attracting vacationers, and he hopes August remains busy.

"It's got a long way to go to make up for what we lost in June," Gantz said.

June flooding and high gas prices have hurt another central Wisconsin attraction: the 199-room Heidel House Resort in Green Lake, said Scott Krause, general manager. He said a recent ad blitz by the state Department of Tourism and a bout of good weather have since brought an increase in business.

Other central Wisconsin resorts have been hit even harder.

The 150-unit Northern Bay Golf Resort and Marina, on Castle Rock Lake in Adams County, has filed for Chapter 11 protection, reporting assets of $52.3 million and liabilities of $32.7 million.

Also, Three Bears Resort, just off I-94 in Warrens in Monroe County, recently gave notice that it might close Sept. 29, eliminating 244 jobs, if it doesn't find a buyer. Owner Van Der Molen Recreational Properties Inc., of suburban Chicago, blamed high gas prices for financial trouble at the resort, which includes a 93-room hotel, water park and campground.

Some other Wisconsin hotel operators say bookings are about level with last year -- but their guests are spending less.

"Instead of playing 36 holes of golf, they're playing 18 holes," said Scott Anderson, president of Kohler Co.'s hospitality and real estate group. The company's operations include the 240-room American Club and 121-room Inn on Woodlake, both in Kohler, located about an hour's drive north of Milwaukee.

In the North Woods, manager Jane Bidwell has noticed the same trend at the 80-unit Treeland Resorts, in the Hayward area, where bookings are steady, but motor boat rentals are down. At The Waters of Minocqua, General Manager Todd Nasi has seen a decline in spending at the gift shop, arcade and snack bar, even as the 106-room northern Wisconsin resort's occupancy rate remains even with last summer.

One benefit of this summer's high gas prices is that some state residents and Chicago-area residents are choosing to vacation within a relatively short drive of home. That has boosted business at the 60-unit Little Sweden resort near Fish Creek in Door County, said Kelsey Higgins, assistant manager.

At Al Johnson's Swedish Restaurant in nearby Sister Bay, June business was even with last year, and July's revenue was up about 1%, said co-owner Lars Johnson. Still, the restaurant has trimmed staff to keep a tighter control on expenses, he said.

Milwaukeeans Laura and Darin Frea had planned to vacation on the East Coast this summer. Instead, they'll drive to Door County this month.

The planned East Coast trip would have been "just too expensive," Laura Frea said.

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Copyright (c) 2008, Milwaukee Journal Sentinel

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