Grand Marais Hospitality Businesses Struggle to Serve Summer Tourists
Cascade Lodge in Lutsen, Minn., near Grand Marais. Cascade Lodge on Instagram

Grand Marais Hospitality Businesses Struggle to Serve Summer Tourists

Facing a shortage of workers and affordable housing, the seasonal vacation hotspot is struggling to keep up.

Sven and Ole’s Pizza in downtown Grand Marais typically has 40 employees. This summer, it has four.

A couple of weeks ago, the pizzeria, which has been serving customers since the early ‘80s, posted on its Facebook page alerting customers of its staffing shortage, sharing updated abbreviated hours, and asking for patience. Just a day before, the owner of neighboring coffee shop Java Moose posted an Instagram video imploring visitors to be patient while waiting for service at local restaurants. Both cited serious understaffing at hospitality businesses around their town of Grand Marais, a top tourist destination on the North Shore of Lake Superior.

According to data from the U.S. Census Bureau, Cook County—home to Grand Marais and the smaller, unincorporated communities of Lutsen, Tofte, Schroeder, and the Grand Portage Indian Reservation—has a year-round population of just 5,376 residents. But each year, the county sees an estimated 1 million visitors—most between the months of May and October, said Kjersti Vick, marketing and public relations director at tourism organization Visit Cook County.

Labor shortages are nothing new for rural parts of the state; according to state data, job vacancy rates in Greater Minnesota have been growing since at least 2008. Jim Boyd, executive director of the Cook County Chamber of Commerce, said that Cook County has been “touch and go” on having enough labor for years. Since 2015, the county has routinely seen unemployment rates drop below 3 percent during summer months. Boyd cited growing housing shortages and the pandemic as the major causes.

“I know a lot of very wealthy resort owners who, at certain times of the year now, are cleaning rooms and making beds because they don’t have enough employees,” Boyd said. “That all said, though, this summer’s shortage is certainly more extreme thanks to Covid.”

International workers essential to local economy

For decades, employers in Cook County have been dependent on international workers to fill labor gaps during tourist season. The workers typically come to the U.S. via one of two visa programs: the J-1 Visa Summer Work Travel Program or the H-2B program. The J-1 program allows full-time international college and university students to live and work in the United States for up to four months. Many return for several consecutive summers while in school. The H-2B visa holders are foreign nationals who come to the U.S. to fill temporary, non-agricultural positions. They can stay in the country for up to three years.

Typically, Boyd said, J-1 and H-2B employees in Cook County work two jobs at a time: one for the companies who sponsor and house them, often large resorts and hotels, and another for smaller employers in town, like restaurants and gift shops.

That sufficed for decades, but in recent years, it’s been tougher to bring in visa holders for a number of reasons, including the pandemic and lack of affordable housing.

Covid-related travel bans around the world stifled J-1 and H-2B workers’ ability to come to the U.S. in 2020 and 2021. The Department of State even temporarily suspended all routine visa services at all U.S. embassies and consulates for a period of 2020. When they did finally reopen, Boyd said, they were so backed up with requests that many applications were denied or never processed.

Jelena McAleer, who co-owns Cascade Lodge just 15 minutes outside downtown Grand Marais with her husband, said Cascade typically employs around 10 J-1 students each summer—about a third of its total staff. However, since the start of the pandemic, the lodge hasn’t been able to hire any. “This summer, we tried to bring in a couple of returning J-1 students who previously worked with us, but they were denied,” she said. (McAleer herself came to the U.S. from Croatia nearly 20 years ago on a J-1 visa.) “The program, although active, is not currently being productive because almost everyone is being denied. We cannot count on the J-1 workers the way we used to, and we’ve had to shift our attention to recruiting locally and nationally here in the States.”

Until Cook County can get those workers back, local business owners are scrambling to stay afloat by recruiting anyone they can, working long shifts, and condensing business hours and offerings.

Long-time Grand Marais business owner Beth Kennedy and her son own two businesses in town: Birchbark Books & Gifts and Beth’s Fudge & Gifts. Beth’s Fudge & Gifts usually has 15 employees. This June, it had five.

“We would normally have four to eight international student employees,” Kennedy said, “But this year, we have none.”

To compensate, Kennedy said they’ve been forced to close four hours earlier each day than they normally would. “We don’t have a second shift staff,” she said. “I want people to understand how important those J-1 students are to our economy here.”

Barb LaVigne, three-decade owner of Angry Trout Cafe in Grand Marais, has enough workers at the moment, but she’s not confident it’ll last the summer.

Usually, about 30 percent of Angry Trout’s staff—about 12 employees—is made up of J-1 students. This summer, the restaurant has only been able to find four and has had to fill the gap with local college students. “We love college kids and certainly want to hire as many local kids as possible, but they usually leave in mid-August, when we’re the busiest,” LaVigne said. “So this year, we’re anticipating having a crunch in August.”

Housing shortage exacerbates labor shortage 

Pandemic or not, a major shortage of affordable housing in Cook County is making the shortage of labor impossible to solve, Boyd said.

“I get applications all the time for people from Duluth, Minneapolis, the Iron Range, Wisconsin—but I have nowhere for them to live,” said Sid Backlund, owner of Sven and Ole’s Pizza. “We used to rent a house or two each summer or line up some cabins or whatever was available and put out-of-town, college, or international employees in them. But over the last 10 years or so, a lot of those places have been bought up by people coming in from other places … and a lot of them have been turned into vacation homes and Vrbo and Airbnb rentals, so they’re gone now.”

LaVigne agreed. “I know there are people who would love to come to work in Grand Marais, but there’s just no place for them to live.”

When McAleer and her husband acquired Cascade Lodge in 2017, she said they quickly learned that having affordable employee housing was the only way to get by. “One of the reasons why we are in a little bit better position right now than many others in the area is that, over the past three years, we have heavily invested in new employee housing and in improving existing employee housing,” she said. “It’s a significant investment, but it’s the cost of doing business up here.” Cascade Lodge houses 100 percent of its employees on its grounds. McAleer believes that having that housing is the only reason they’ve been able to recruit locally and nationally since the pandemic, and likewise, is the biggest reason their business has survived.

Small business owners in Grand Marais who don’t own employee housing, like Backlund and LaVigne, can only obtain international workers by hiring the ones sponsored and housed by local resorts and hotels. But of course, with this year’s shortage of international workers, that’s not an option.

Building affordable housing outside of the city limits of Grand Marais isn’t an affordable option either. Grand Marais is the only incorporated town in Cook County with municipal sewer and water. “If you want to build a home outside Grand Marais … you pay for the road, the sewer, the well, the power,” Boyd said. “You have at least $100,000 in the ground before you even put up the first stud.”

“We’re really focusing on ways to create more affordable housing here,” Boyd said. “I think there has to be more discussion here about the need for higher housing densities and changes in zoning.”

Tourists still welcome

Even though business owners and employees in Cook County are exhausted from working long hours, they’re still thankful for the opportunity to serve tourists.

“We really want tourists to continue to come,” Boyd said. “We depend on having them here. We just need a little patience and understanding right now when they visit. We’re doing our darndest to treat them well and to make sure that they’re comfortable and that they have clean places to stay, good food to eat, and places to explore.”

McAleer echoed Boyd’s sentiment. “We just love that the North Shore tourism business is so strong right now. We’re hoping it continues to hold on for years to come and that we are able to keep bringing good employees here. We all need it.”

Bluefin Bay Family of Resorts and Lutsen Resort were contacted for this story. Lutsen Resort did not return calls or emails. A spokesperson for Bluefin Bay said the resort was unable to participate due to being overwhelmingly busy.