Duluth's tourism industry has not had what anyone would call a good summer.

Taxes collected from hotels, motels, restaurants and bars in July were down 26.3% percent compared with the same month last year.

But Duluth Finance Director Wayne Parson described feeling "pleasantly surprised" by just-released July tourism tax collection numbers.

"We've made up a lot of ground," he said.

He noted that the latest tourism spending figures compare quite favorably to what Duluth saw early on in the COVID-19 pandemic.

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"When I look back at April, that was our worst month. I mean, hotels were down 86% and food and beverage sales were down 60%," Parson said.

The latest stats for July show hotel and motel business down 29.3% and food and beverage sales down 20.4% compared with the same month last year.

That continued decline versus 2019 comes as no surprise to Parson.

"We've lost all our marquee events, so obviously that's going to have an impact on the numbers," he said.

Anna Tanski, president of Visit Duluth, said the city is seeing signs of recovery, "which is exactly what we were not only hopeful for, but we were very intentional in our marketing and promotion to sort of really work toward seeing this type of bounce.

"So, I think it was a combination of our very targeted and very limited marketing efforts," she said. "We had to be very strategic in the placement and the messaging we were using."

Visit Duluth began marketing the city as a vacation destination in earnest in late June, hoping to encourage July travel, Tanski said.

"As you will recall, it was a very different time just a few months ago in how we were really sharing that message and wanting to encourage safe and responsible travel," she said.

Tanski attributed the rebound not only to marketing efforts, but also several other factors, including "the spectacular summer weather that we had and just the growing pent-up desire for people to have a getaway and reconnect a little bit" after months of relative isolation.

Mayor Emily Larson earlier had shared budget projections with the Duluth City Council forecasting that tourism tax collections this year would be about half of what they were last year, due to the effects of the COVID-19 pandemic and efforts to maintain social distancing to slow the spread of the coronavirus.

Those numbers are running a little stronger, however, with year-to-date tourism tax collections through July coming in 35.6% lower than for the same period last year.

Reflecting on the situation, Parson said: "Even with a 50% shortfall, we are able to cover our debt obligations. So, if we do better than 50% it may free up some money, if you will.

"But of course, I think as we get closer to the end of the year, we'll have a better handle on how our fall season looks, and if our trend continues or if there's going to be another shutdown. There are all kinds of things that could happen yet here in the next few months," he cautioned.

If the city's initial forecast holds true and tourism tax collections come in at about half of what they were last year, Parson said the costs of serving outstanding debt will consume nearly all the proceeds. Those debts are related to Amsoil Arena; seawall repairs; the lower chalet and Adventure Park at Spirit Mountain; recreational amenities throughout the St. Louis River corridor; and the Minnesota Slip pedestrian bridge.

Visit Duluth is working to sustain the upward trend in tourism spending. But Tanski acknowledged that could be a tall order for hotels, motels and restaurants.

"We do anticipate August collections to show signs of continued recovery, but we're bracing for a very challenging fall, because by every indication we will start to see weekends that are fairly strong, which is a typical trend for Duluth," she said. "That's nothing new. But the mid-week occupancy levels will decline because of the lack of meetings and conventions that typically take place.

"So, while we're celebrating this temporary recovery, we know that the fall is going to pose some pretty significant challenges, and we do expect declines again," Tanski said.