A Soft Summer In Travel Industry

October 11, 2004
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Coming off what’s best described as a “soft” summer travel season, the state agency responsible for promoting Michigan’s $15 billion tourism industry is preparing for next year with a funding freeze.

The $5.7 million appropriated to Travel Michigan for the state’s 2005 fiscal year to promote Michigan as a vacation destination is a historical low, but at least the agency didn’t experience another funding cut.

Given the state’s fiscal crisis of the last few years, Travel Michigan Vice President Dave Lorenz is satisfied with the tourism budget the legislature and Gov. Jennifer Granholm approved.

“In a difficult situation, I don’t think we could have expected anything better,” Lorenz said.

Still, Travel Michigan’s FY2005 promotional budget compares to $8 million just four years earlier and as much as $12 million at one point in the late 1990s.

As it has the last three years, Travel Michigan in 2005 will rely heavily on partnerships with destination communities and visitors bureaus around the state that enable participants to leverage available funding and better target key markets in Illinois, Indiana, Wisconsin and Ohio.

The partnerships, focusing primarily on the busy summer travel season, allow Travel Michigan to make the best use possible of limited funding that provides few resources to promote the state during the fall color and winter seasons, Lorenz said.

“We’re really going fishing where the fish are,” he said. “But when you’re a four-season state, that just isn’t sufficient.”

Travel Michigan in FY2004 provided matching funds totaling $665,000 for nine partnerships statewide.

Among them were the “Beachtowns” campaign that featured several destinations on Lake Michigan — Holland, Grand Haven, Saugatuck and Muskegon among them — and each received $100,000. “Michigan’s West Coast,” organized by the Grand Rapids/Kent County Convention & Visitors Bureau, received $150,000 in matching funding under a partnership with Travel Michigan.

In Muskegon, the county-run visitors bureau got $75,000 from Travel Michigan for an ad campaign touting the new high-speed, cross-lake ferry to Milwaukee, the Lake Express.

The Lake Express is credited in Muskegon with boosting tourism, which is an exception to the statewide results. Collections from county room taxes were running 2 percent above last year, Convention & Visitors Bureau Director Sam Wendling said.

In FY2005, Travel Michigan plans to fashion marketing partnerships that allow smaller-market visitors bureaus with small budgets to participate. In past years, Travel Michigan has required a minimum local contribution of $75,000 to form a marketing partnership, Travel Michigan spokeswoman Kirsten Bergstrom said.

The change was made to generate a higher number of marketing partnerships for FY2005, Bergstrom said.

‘We’re really trying to work with the industry,” she said.

It’s an industry that this year slogged through a rough summer travel season that was hindered by poor weather, high gasoline prices and consumer concerns about the economy, according to a recent survey of travelers and tourism-related businesses in Michigan.

Nearly half of the respondents to the survey, conducted the week after Labor Day, said their business had fared worse this year than in 2003. A little more than one-third reported a better 2004 than last year.

Similar results were reported when respondents were asked about just the summer travel season.

While the Travel Michigan Travel Barometer report found travel volumes about the same or a little less than last year, travelers were spending considerably less and traveling for significantly shorter durations.

The survey found people traveling in Michigan took an average of 2.3 trips to the state this last summer, down from the average of 3.2 trips in 2003. They stayed for an average of 3.7 nights, which compares to an average stay of six nights in 2003.

In announcing the survey results late last month, Travel Michigan labeled the summer season as “soft.” Lorenz goes even further, saying 2004 was a “poor” summer for the tourism industry.

“I would call it a very disappointing season for us,” Lorenz said.

Yet, as with the budget allocation, Lorenz chooses to see the bright side and keep in mind the conditions, particularly the weather, with a cool and rainy June and cool August, the industry faced this past summer.

“With all of these factors fighting us, maybe we shouldn’t be as down as we are.  The industry, quite literally, weathered the storm. It just didn’t turn out as we expected,” Lorenz said.

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