ICE surge, tariffs hammer Twin Cities hospitality

A new survey from the Federal Reserve Bank of Minneapolis and Hospitality Minnesota shows Twin Cities restaurants and hotels took a clear hit this winter, with more than half of 125 respondents reporting declines in customer traffic and profits in late 2025 and metro operators more pessimistic than their Greater Minnesota counterparts. Nearly 60% said tariffs have hurt their operations, particularly those importing goods, and many cited rising labor costs, new taxes, and Minnesota’s new paid leave policy as additional pressures driving up expenses and complicating staffing. More than half of surveyed businesses said recent immigration enforcement actions and protests cut into customer demand, with about 30% forced to temporarily close or reduce hours during the crackdowns — turning some previously busy, especially Hispanic‑owned, Twin Cities commercial strips into "ghost towns." Only 17% of respondents said they’re currently hiring for new positions, and 45% described their outlook for the first half of 2026 as pessimistic versus just 27% optimistic, signaling a sector that is hunkering down rather than expanding. For Minneapolis–St. Paul residents, this means more fragile neighborhood restaurants, fewer hospitality jobs and a local economy where federal immigration tactics and trade policies are showing up directly on paychecks and darkened storefronts, not just in talking points.