Local Tourism Forecast Is Sunnier

March 14, 2003
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If there is any glimmer of optimism locally in a gloomy outlook for Michigan’s $12.8 billion tourism industry, it’s geography.

Communities and travel destinations in West Michigan, particularly those along the Lake Michigan shoreline that target the Chicago area, stand to fare better than the rest of the state this year, according to a top industry researcher.

Chicago’s relatively close proximity to West Michigan could give travel destinations in the region an advantage over their counterparts statewide, said Don Holecek, director of Michigan State University’s Tourism Center. With the continued soft economy, falling consumer confidence, rising fuel prices and the threat of war, travelers in Chicago who do travel this summer are more apt to opt for a week or a long weekend at the beach or traveling up the Lake Michigan shoreline, instead of a lengthy vacation via flying or driving long distances, Holecek said.

“People are going to be looking for some alternatives and perhaps they’ll spend more time in Michigan,” Holecek said. “It’s a market where there is some potential growth, where the rest of the state is going to be in a funk, I’m afraid.”

Statewide, the MSU Tourism Center’s recently released 2003 industry outlook forecasts a 2 percent increase in travel volumes this year but a 2 percent decline in travel spending. The forecast comes after a 2002 travel season that saw a deep 10 percent decline in travel spending, despite a 3.1 percent increase in travel volumes.

Given the proximity to the key Chicago market, the tourism trade in West Michigan — including the shoreline destination communities of Muskegon, Grand Haven, Holland and Saugatuck — could still see increases in travel spending this year, Holecek said. Lakeshore destinations traditionally have fared better than the rest of the state in tourism volume and spending.

All of the forces that are combining to make it a difficult year for the state’s tourism industry makes cooperative marketing campaigns that target Chicago and other nearby markets all the more important, Holecek said.

Travel Michigan and 10 shoreline visitors’ bureaus are planning their second year of the $200,000 “Beachtowns” promotion that markets the shoreline to Indianapolis and Chicago. The Chicago market has also traditionally been a major target area for shoreline visitors’ bureaus.

“There’s probably going to be some good news for people that target the Chicago market,” Holecek said.

Overall, the threat of more terrorism and rising gasoline prices are the wild cards for the tourism industry this year. Gas prices, if they rise well beyond $2 per gallon and approach $2.50, “could really put everything into a tailspin,” Holecek said.

Last year saw travel spending decrease for the second straight year, the first back-to-back declines since 1985.

While accurate in its 2002 prediction for a travel volume increase, the Tourism Center “missed by a mile” the outlook for spending. The center a year ago predicted a 5 percent to 6 percent gain in travel spending.

The 2002 outlook was predicated on economic forecasts that turned out too rosy because of the lack of a rebound in business travel, threat of war with Iraq, growing unemployment, falling consumer confidence and mounting stock market losses, Holecek said.

The center’s outlook for 2003 sees casino gaming and shopping as having chances for growth, with each forecast at 3 percent to 4 percent increases. Outdoor recreation and camping are forecast to experience flat volumes to a 1 percent increase over 2002 levels, and golfing at upscale resorts is forecast to remain flat.

The outlook for the lodging industry forecasts a 2 percent to 3 percent decline, although the volumes at lodging establishments will vary greatly statewide. Those relying on business travel will fare the worst, while those located in drive-to communities with strong leisure travel economies will do the best, Holecek said.               

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