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Original article URL: http://bridgemi.com/2013/02/1-billion-economic-impact-thats-pure-michigan/

Economy & competitive position/Quality of life

$1 billion economic impact? That’s Pure Michigan.

Massachusetts resident Delia Marshall came to Michigan last summer for a family reunion at a beach house on the shores of Lake Michigan. A week later, she left as an ambassador for a state that claims to be home to “the perfect summer.”

“We stayed in a house with a private beach and I just can’t say enough about how beautiful the lake was,” Marshall said. “There was this sense that nature was with us and that Michigan is not just about making automobiles.”

Marshall was one of a growing number of out-of-state residents who are vacationing in Michigan and transforming the state’s $17.7 billion tourism economy. (While growing, the tourism sector still accounts for less than 10 1 percent of Michigan’s $300-billion plus economy.)

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Long dominated by in-state travelers, Michigan’s tourism industry has fundamentally changed in recent years. Out-of-state travelers now account for the majority of leisure travel spending in Michigan, according to state data.

That shift occurred in 2010 and continued into 2011, according to the most recent data available. State data show that out-of-state visitors in 2011 spent more money on leisure travel in Michigan ($6.8 billion) than state residents did ($6.2 billion).

Call it the Pure Michigan effect.

Since launching in 2006, the slick marketing campaign — anchored by television ads showcasing the state’s natural splendor and narrated by the soothing voice of actor Tim Allen — increased overall travel spending at the same time per capita income among Michigan residents was decreasing.

The key: Attracting visitors from other states. The campaign hit its stride in 2009, when the state began running Pure Michigan television ads nationwide.

In 2011, the Pure Michigan campaign was credited with attracting 3.2 million out-of-state visitors who poured $1 billion into the economy, according to state data. Two million of those visitors came from the Great Lakes region; the other 1.2 million came from more distant states.

“We believe that our potential to get a bigger and bigger share of the national travel market, especially for summer travel, is enormous,” said George Zimmermann, vice president for Travel Michigan at the Michigan Economic Development Corp. “In some ways I feel like we’re just getting started.”

101 million

Number of travelers (residents and non-residents) who visited Michigan in 2011.

73
Percent of travelers in Michigan who are Michigan residents.

81

Percent of travelers in Michigan who travel for leisure.

19

Percent of travelers in Michigan who travel for business.

Michigan’s relatively mild summers, abundant natural resources and varied cultural attractions lure a wide variety of leisure travelers, Zimmermann said. He said residents of southern states that bake in the summer, like Texas, are increasingly coming to Michigan for vacations.

“Since 2009, we’ve been promoting our summers —we are now using climate as a marketing tool, indirectly,” Zimmermann said. “One of the phrases we’ve used in our ads is, ‘America’s perfect summer.’ That’s really what we offer.”

For the past several decades, blue-collar autoworkers who enjoyed ample vacation time and earned enough money to own a cabin up north dominated Michigan’s tourism industry. But that era has passed, said Sarah Nicholls, a tourism expert and associate professor at Michigan State University.

“A lot of those jobs are gone now,” Nicholls said.

Michigan’s per capita income dropped from 20th nationally in 2001 to 36th in 2011, according to U.S. Census data. The state’s population also declined during that period.

That sucked some of the life out of Michigan’s tourism industry, Nicholls said. Out-of-state travelers are filling that void.

“Traditionally most leisure travel in Michigan was by Michigan residents,” she said. “I’m not sure we’ll ever see it swing back that way again.”

100 million visitors and counting

According to the most recent industry data, 96 million travelers visited Michigan in 2010. That figure includes business and leisure travelers from out-of-state and Michigan residents who traveled within the state.

Leisure travelers account for 81 percent of all travel in Michigan; the other 19 percent are business travelers. Three-quarters of all travelers in Michigan are residents of the state, but they spend less on average than out-of-state visitors.

Visitors to Michigan in 2011 spent $13.1 billion on leisure travel and $4.6 billion on business trips. Tourism accounted for nearly 200,000 jobs and generated $995 million in state tax revenue that year, according to state data.

The 2012 travel data won’t be finalized until June, but Zimmermann said hotel bookings last summer were indicative of a banner year. Statewide, the hotel occupancy rate hit a record high of 56.8 percent for the year, he said.

“We know that the Pure Michigan campaign has been a big part of that because we’ve seen no big change among in-state travelers; the big increase has been in out-of-state visitors,” Zimmermann said.

The southeast quadrant of Michigan’s Lower Peninsula — a region that extends from the Ohio border to Bay City and encompasses metro Detroit — is by far the state’s largest tourism market.

Southeast Michigan accounted for 45 percent of all leisure travel days in 2010, according to a study by the firm DK Shifflet & Associates. Southwest Michigan ranked second in leisure days (21 percent), followed by northwest Lower Michigan (14 percent), northeast Michigan (13 percent) and the Upper Peninsula (7 percent).

While a top state official for tourism says new ads aimed at hot southern states are paying dividends, Michigan has long touted its temperate climate, as this ad attests to Michigan being “delightfully air-conditioned by four Great Lakes.” (courtesy photo/state of Michigan)

Wayne County was the state’s top county for tourism revenue in 2010, with $4.4 billion, according to state data. Kent County ranked second, followed by Saginaw, Oakland and Grand Traverse Counties.

Frankenmuth, which is Michigan’s most popular tourist attraction, propelled Saginaw County to the top of the tourism revenue chart. The Bavarian village attracts 3 million visitors annually, according to industry data.

About 20 million travelers visit the three-county region of metro Detroit annually, and 64 percent of those come from outside of Michigan, according to the Detroit Metro Convention & Visitors Bureau. Metro Detroit encompasses Wayne, Oakland and Macomb counties.

“This is a major destination … we have people from all over the world visiting metropolitan Detroit,” said Mike O’Callahan, chief operating officer at the Detroit Metro Convention & Visitors Bureau.

O’Callahan said the city of Detroit’s political strife, high crime rate and negative reputation have created “a gigantic challenge” for tourism promoters.

On the up side, O’Callahan said, downtown Detroit and the surrounding suburbs offer numerous attractions: Four professional sports teams, The Henry Ford museum, casinos, great restaurants, excellent shopping, abundant music and theater offerings, numerous boating and fishing opportunities, historic architecture, the auto industry and numerous other businesses.

“That’s what we’re selling,” O’Callahan said.

Jeff Alexander is owner of J. Alexander Communications LLC and the author of “Pandora’s Locks: The Opening of the Great Lakes – St. Lawrence Seaway.” A former staff writer for the Muskegon Chronicle, Alexander writes a blog on the Great Lakes at http://allthingsgreatlakes.wordpress.com/.

Complete coverage

$1 billion of economic impact? That’s Pure Michigan.

Plan calls for Pure Michigan to be big, too

Next frontier for state tourism – the world

4 comments from Bridge readers.Add mine!

  1. Jack Matthias

    All the stories are good. We lost 50,000 tourism jobs from 200,000 to less then 150,000 – while some have been recovered due to the Pure Michigan promotion not all of them have yet. There is an absurdity. The state spends a $1 on Pure Michigan – gets back $4.90 in incremental tax revenue. “It is win-win-win and truely a No-Brainer!” That ratio holds up as you raise the investment. The industry has unused capacity. We should be spending $50,000,000 now – not ramping up to it in 5 years. Why – because there is instant payback, a substantial profit and it puts laid off people back to work! Why does it not happen? I think there is a mentality at the legislative level that says we have so many dollars to spend this year based on revenue estimates from state budegt agencies – so if we spend more on tourism how do we defend that to all the other interests that are competing for revenue dollars – schools – prisons,etc? Wrong question? If you spend more on Pure Michigan – the budget enetities and legislators and the governors office need to go back and increase the revenue estimates to reflect the $4.90 payback – at which point you actually have anyother $3.90 to spend on those competing needs. They can’t do the math!

    1. Dixie Wong

      How can you prove that pay-back ?

      I live in the St. Joseph-Benton Harbor area. We don’t have a lot of bike paths. We do have areas that would be wonderful bike paths to the lake. Do you have any stats as to how much tourism we get from bike paths? I understand that Michigan has the most bike paths than any other state.

  2. sam melvin

    Yes TOURIST come to see DETROIT..My boos from a foreign country rented a van and drowe around ALL NIGHT to see A MURDER or a person getting shot or etc..He was very disapionted and voice his oppinon of THAT iT is not true what is given to the public.. SO much for a Hart nights work.
    BUT please get the roads fixed and finally RUN the TRAIN alaround lake michigan and lake HuroN great sienic view from th etrain will bring in Older citzen that donot want to drive any long distance.

  3. CK

    We rent a house with private beach on Lake Michigan, so I sent the article to my husband. Here is his response:

    And we did our bit!

    (A lot of math errors in that article, though.  $17.7 billion is a lot more than 1% of $300 billion.  And if $6.8 billion cam from out-of-state and $6.2 billion from in-state, where did the other $4.7 billion come from?)

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