Wildfires cost region $9 million in lost visitor spending

ELY- The wildfires that forced the temporary closure of the Boundary Waters Canoe Area Wilderness cost the Arrowhead region an estimated $9 million in economic activity, according to a University of Minnesota analysis.
Researchers arrived at the figure by using cellphone location data to estimate the number of visitors this summer. They combined that data with tourism spending estimates to arrive at a final estimation of lost economic activity.
According to the analysis, the Ely area saw 22,000 fewer summer visitors compared to the previous two years. As a result, Ely lost an estimated $4.4 million in economic activity, while Grand Marais lost another $4.6 million. Together, the communities recorded nearly 48,000 fewer visitor-days in July compared with the previous two years.
The closure began July 14, following wildfires that burned more than 70,000 acres in the region. Restrictions overlapped with the height of the summer tourism season. The cancellation of Ely’s Blueberry Arts Festival, which historically draws tens of thousands of visitors, added to the disruption. The closure caused revenue losses among outfitters, hotels, restaurants, retail shops, and more.
What the estimate is, and isn’t
Michael Vasichek, a student at the University of Minnesota Duluth, wrote the analysis with the help of Monica Haynes, the director of the Bureau of Business and Economic Research at the university.
Vasichek said he used Placer.ai, a location-data platform that estimates visits using cellphone data, to calculate how many fewer people visited Ely and Grand Marais compared to the same time in the previous two years. He then estimated how much those missing visitors would typically spend on lodging, restaurants, recreation, and other activities based on existing consumer spending data.
The spending estimate was fed into Implan, an economic input-output model that calculates not only direct losses but also their broader effects throughout the economy.
“It also calculates ripple effects throughout the economy. So you know, if hotels aren’t as busy, then there’s also less need for laundry services,” Haynes explained.
The analysis also estimated that the missing spending would have supported approximately 72 jobs across the region. However, researchers cautioned against interpreting that number as 72 people actually losing their jobs.
“It’s a little bit hard, I think, to interpret that number when you’re talking about just a short window of time,” Haynes said.
The researchers acknowledged several limitations. Placer.ai can distinguish local residents from non-residents, but it cannot reliably identify why someone visited an area. Firefighters, emergency personnel, and others working in the region were therefore included in visitor counts, despite potentially spending less on tourism-related activities than vacationers.
“There’s no way to filter out knowing whether someone in the community was there as a firefighter fighting the fire versus there on vacation,” Vasichek said.
The researchers also had to estimate how much each missing visitor would have spent.
“We don’t really know how much that person would have spent in the community,” Haynes said. “It’s just based on our past experience with how much a visitor typically spends.”
Broader economic conditions could also have contributed to the decline. Gas prices and other tourism trends may have affected visitor numbers independently of the fires, making it impossible to attribute every dollar of estimated losses directly to the closure.
The analysis focused on July so that the findings could be delivered to the community quickly. However, Vasichek and Haynes suspect that visitation may have dwindled after the Boundary Waters reopened as concerns remained about smoke and air quality.
“Once they had that impression, I think a lot of people maybe stayed away just out of fear or worry,” the researcher said.
A separate University of Minnesota Extension study, based on surveys of local businesses, is expected to provide additional insight into the closure’s effects on individual operators.
For now, researchers say the $9 million estimate offers a useful measure of the disruption, rather than a definitive accounting of every business’s losses. By measuring missing visitor spending and its wider economic effects, the analysis illustrates how a short-term closure during peak tourist season can have consequences extending well beyond the wilderness itself.