ICE surge, tariffs and state policies hammer Twin Cities hospitality
Minnesota's hospitality sector is "stressed and on the brink," with profits and customer traffic falling after an early‑2026 federal immigration enforcement surge and tariff increases, according to Hospitality Minnesota’s 2026 State of Hospitality Report and local coverage. The industry is urging state fixes — including credit‑card swipe‑fee reform, changes to the liquor posting law, and adjustments to the new paid‑leave rules for seasonal workers — as Twin Cities chefs Andrew Kraft and Gustavo Romero warn shrinking profitability may force closures or reduced hours.
📌 Key Facts
- Hospitality Minnesota’s 2026 State of Hospitality Report formally characterizes the industry as "stressed and on the brink."
- The report explicitly ties an early‑2026 federal enforcement (ICE) surge to further declines in customer traffic and increased financial strain on restaurants.
- Named Twin Cities chefs Andrew Kraft (Bungalow Club) and Gustavo Romero (Oro by Nixta) say traffic is down, profitability is shrinking, and 2026 may force decisions about closing or cutting staff hours.
- Hospitality Minnesota is lobbying for credit‑card swipe‑fee reform so fees are not charged on taxes and tips.
- Hospitality Minnesota is seeking adjustments to the liquor posting law.
- Hospitality Minnesota is seeking fixes to the new paid‑leave law to address impacts on seasonal workers.
📊 Relevant Data
The ICE Operation Metro Surge has resulted in an estimated $81 million in losses for restaurants and small businesses in Minneapolis.
Minneapolis business struggles continue after federal immigration surge — KARE 11
Nearly 60 percent of Minnesota hospitality businesses reported that tariffs had a negative effect on their operations, particularly those importing goods.
New year, new challenges for Minnesota's hospitality businesses — Federal Reserve Bank of Minneapolis
Immigrants make up more than 30% of the workforce in U.S. restaurants and foodservice, with even higher concentrations in urban markets like the Twin Cities.
The Hospitality Labor Report — The Staffing Agency
There are an estimated 50,000 undocumented workers in Minnesota's labor force, with about one-quarter employed in services industries, which include hospitality.
The Role of Undocumented Immigrants in Minnesota's Workforce — Minnesota Department of Employment and Economic Development
Hispanic or Latino workers have the highest labor force participation rate in Minnesota at 77.5%, compared to other racial and ethnic groups.
Hispanic and Latino Minnesotans: An analysis of employment trends — Minnesota Department of Employment and Economic Development
Minnesota's workforce includes more than 197,000 Latino workers as of 2024, representing approximately 6.5% of the total workforce while Latinos make up 6.7% of the state's population.
The Latino Economy: A Powerful $70 Billion Engine of Growth in Minnesota — Empowering Strategies
📰 Source Timeline (2)
Follow how coverage of this story developed over time
- Hospitality Minnesota’s 2026 State of Hospitality Report formally characterizes the industry as 'stressed and on the brink.'
- The report explicitly ties early‑2026 federal enforcement surge impacts to further declines in traffic and financial strain on restaurants.
- Hospitality Minnesota is lobbying for specific relief measures: credit‑card swipe‑fee reform so fees are not charged on taxes and tips, adjustments to the liquor posting law, and fixes to the new paid‑leave law for seasonal workers.
- Named Twin Cities chefs — Andrew Kraft of the Bungalow Club and Gustavo Romero of Oro by Nixta — say traffic is down, profitability is shrinking, and 2026 may force decisions about closing or cutting staff hours.