Tourism outlook: State, local leaders anticipate strong summer ahead

Jodi Schwan

May 8, 2023

Here’s a stat that might surprise you: In 2022, visitor spending in southeast South Dakota ranked first among all regions of the state.

It totaled $1.86 billion, edging out even the Black Hills at $1.81 billion, according to Teri Schmidt, CEO of Experience Sioux Falls.

“I know that’s not a big difference, but that’s big news for us,” Schmidt said. “We had a lot of event business in 2022. Big corporate business hadn’t come back yet, but small meetings and events did. And our leisure travel was strong.”

Bus tours also increasingly are stopping in Sioux Falls, she said.

“They typically would bypass Sioux Falls and go to the Hills, but now they’re starting to book and stay in Sioux Falls,” Schmidt said.

The hope has long been that once visitors experience one part of South Dakota, they’ll want to see more, said Secretary Jim Hagen, who leads the South Dakota Department of Tourism.

“For decades, the focus was on major attractors — Mount Rushmore, Crazy Horse, Custer State Park — and while those are huge anchors for us … if we can continue to cross-promote the entire state and get visitors interested in visiting the Missouri River and the northeast and southeast, once we hook them on the west they will come back and explore more, and we’re seeing more and more of that.”

This week marks National Travel and Tourism Week — a chance for the industry to promote the value it brings to states and communities and to look ahead for the season.

“We begin every season optimistic, and I’m optimistic about this season as well,” Hagen said. “There are concerns about a recession and inflation, and there’s concerns about gas prices, but that being said, we’re still looking at 90 percent of Americans who say they’re going to get out and travel.”

While tourists are starting to go back to more urban areas post-pandemic, the No. 1 reason that people still travel is to spend time with family and friends, and state and national parks and outdoor recreation rank high among what they’re seeking, Hagen said.

“So all in all, I think it’s shaping up to be a very strong summer,” he said. “It doesn’t matter where we travel around the country, my team and I have never seen the interest in our state as strong as it is today.”

In Sioux Falls, attractions such as new sculptures at SculptureWalk, concerts at Levitt at the Falls and the new diamonds at the Sanford Sports Complex support leisure and group travel.

“I think the leisure market is going to be strong this summer. I’m very optimistic,” Schmidt said. “Gas prices are hanging in there … and barring any catastrophes, I think people are ready to travel again and more.”

Through March, hotel occupancy in Sioux Falls ranked third out of its regional comparison set, behind only Overland Park, Kansas, and Bismarck, North Dakota, and ahead of Fargo, Omaha, St. Paul and Des Moines, among others.

“We fared quite well,” Schmidt said. “Business travel is picking up. Where a company might have sent five people, now they’re sending two, so we’re seeing some of that. Corporate meeting conventions are not back like they were pre-COVID, but the fact that corporate travelers are traveling again is definitely being noticed, and we’re hoping and waiting for those numbers to increase.”

Next year should bring more reasons to visit, she added. The new Canopy by Hilton at The Steel District is scheduled to open, the Cherapa Place expansion will be wrapping up, and new attractions will be opening, including at the Great Plains Zoo.

The state also has seen success encouraging residents to travel within their own state through its Passport Program, which identifies road trip-friendly destinations. It recently expanded to add one focusing on state parks and natural attractions.

Throughout National Travel and Tourism Week, South Dakota landmarks will be lit red, the official color of the tourism industry. Landmarks set to be lit red include:

  • Storybook Land at the entrance and Tin Man slide, Aberdeen.
  • Wylie Park entrance, Aberdeen.
  • Children’s Museum of South Dakota, Brookings.
  • McCrory Gardens, Brookings.
  • Visit Brookings, Brookings.
  • Crazy Horse Memorial, Custer, for one night only on May 12, dusk to 10 p.m.
  • The Mammoth Site, Hot Springs.
  • The World’s Only Corn Palace, Mitchell.
  • The Monument, Rapid City.
  • The Rushmore Hotel, Rapid City.
  • Main Street Square, Rapid City.
  • Arc of Dreams, Sioux Falls.
  • Falls Park, Sioux Falls.
  • Washington Pavilion, Sioux Falls.
  • Denny Sanford Premier Center, Sioux Falls.
  • Black Hills State University – Woodburn Hall, Spearfish.
  • The Buffalo Chip, Sturgis.
  • DakotaDome, Vermillion.
  • Sanford Coyote Sports Center, Vermillion.

Tourism by the numbers

Here’s a snapshot of the state of the visitor industry:

  • In 2022, South Dakota welcomed 14.4 million visitors, a 0.6 percent increase over the previous year.
  • Those visitors spent $4.7 billion at lodging, retail, transportation, restaurants and other businesses during their stay.
  • Visitor activity in 2022 also generated $361 million in state and local tax revenue and supported more than 56,000 jobs throughout the state.
  • South Dakota’s southeast region produced the highest level of visitor spending in the state in 2022 at 39.4 percent, which equates to over $1.8 billion.
  • Visitor spending in the southeast region grew nearly 17 percent in 2022 over the previous year, an increase of $267 million.
  • Nearly three-quarters of the region’s spending was in Minnehaha County, which captured 29 percent of all visitor spending statewide.
  • In Sioux Falls, there were 1.19 million visitors, with an economic impact of over $445 million to the city — the estimated visitors and economic impact based on numbers Experience Sioux Falls could count.

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