COVID fatiguing US business

By Merna Emara
Staff Writer

Amanda Schmidt and her husband bought the Hilltop Lodge Motel in International Falls, Minnesota, in 2019 after a testament from the previous owners that they had made a good investment purchasing the border business. While Amanda and her husband saw predictions of revenue on paper, they never saw them materialize, due to the pandemic.

“We saw tens of thousands of dollars in cancellations,” Schmidt said. “We purchased our business in the fall of 2019 and immediately started renovating and hoping for a booming 2020 season. [COVID-19] was a shock for us.”

Schmidt said during the fishing season before the pandemic, Hilltop Lodge Motel would see full occupancy on Fridays and Saturdays. In 2020 during the peak fishing season from March to August, occupancy rate was less than 20 per cent, for the 11 room and five cabin facility.

The Schmidts are not the only business owners navigating uncharted waters.

Chocolate Moose Restaurant in International Falls is also struggling to keep up with the rules set out by the state of Minnesota.

Tiffany Crane, general manager at Chocolate Moose Restaurant said Minnesota Governor Tim Walz has enacted regulations around operating capacity.

Crane said business is slowly picking up with the vaccination rollout, but she does not see it going back to normal with the borders shut.

“Everything changed during the pandemic,” Crane said. [COVID] is killing all these small businesses and we’ve lost so much business, especially in the summer. But I think out of all of it, probably the thing that stings the most would be the border not being open.”

Crane works for Tony and Michael Jerulle, who own both Chocolate Moose Restaurant and Sammy’s Pizza. She said during a typical summer her cash till would be full of Canadian bills. The sight of Canadian money is a rare occurrence now.

Crane said businesses in International Falls are suffering because Canadians cannot cross the border and Americans who usually drive up to fish in Canada are no longer able to.

“We do have some people coming up fishing but I don’t know how it’s going to be this summer,” Crane said. “Who knows what the changes will be, but we definitely won’t see it like we normally have with all the fishermen that come from across Canada.”

Orders from railroad workers, Canadians who work for CN Rail and the paper mill in International Falls are the only customers keeping the restaurant afloat.

For someone like Sandy Netland, who owns both the Voyageurs Motel and the Voyageurs Restaurants in International Falls, the challenges are multiplied by two.

Hilltop Lodge owners, the Schmidts, purchased the business in 2019, and have been hit hard by the border closure.

The loss of revenue from both of her businesses adds up to more than 75 per cent, Netland said. She added that the restaurant was affected more because they had to close many times, while the motel still saw some reservations from workers crossing the border for essential work.

Netland said the biggest challenge is keeping their staff. With unemployment insurance during COVID-19 providing $600 per week to those who lost their jobs during the pandemic, Netland said her former employees do not want to work for her again because they make more money not working.

“When the motel and the restaurant opened up again, I put a job ad and posted out here for two months for the motel, I could not get any help here,” Netland said. “At the restaurant, people don’t want to come back because if they lose their unemployment, they lose that extra $600 a week.”

Netland said she and her husband are in their 70s and it has become so difficult managing both businesses during COVID that they are thinking of selling them.

As far as financial relief programs from the American federal government to small businesses, Netland said they were only eligible for the Paycheck Protection Program. This program provides loans to help businesses keep their workforce employed during COVID. Businesses with 20 or fewer employees were only eligible for this loan.

Netland said this loan helped their businesses retain some employees, but they had to lay off others before the support came, and they are still losing money despite the help.

Unlike Netland, Schmidt said they have been denied loans from the Small Business Administration because they just purchased the business in 2019.

“What they’re requiring of their applicants is to prove their financials from the previous year, which does not apply to us,” Schmidt said. “We are a square trying to go into a round peg for them. However Koochiching County has been able to provide us with a grant.”

Schmidt said her husband is on the Lodging Association Board for the Rainy Lake international Chamber of Commerce and is trying to make up for lost revenue by attracting people from the Twin Cities.

Whatever the outcome is, Schmidt said, they will remain positive and hopeful for coming seasons.

“We have a lot of people that have been loyal to our property for decades,” Schmidt said. “And my husband and I didn’t even get a chance to meet them last year. So we’ve developed these relationships as they call and book and call and cancel and call and book again. We are just looking forward to meeting everybody and trying to be positive until we find a reason not to be.”