Lodging And Tourism Group Pins Hopes On Legislature

April 7, 2008
| By Pete Daly |
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GRAND RAPIDS — The Michigan Lodging & Tourism Association is excited about Driving Tourism 2008, the theme of its annual meeting here April 14-15 at the Amway Grand Plaza — but most of the group’s attention right now is focused on the Michigan House of Representatives, due back Tuesday from a two-week break.

"The big issue is legislation to dramatically increase state funding for tourism promotion. And that funding package has already passed the Senate," said Steve Yencich, president and CEO of the association, which was formerly known as the Michigan Hotel, Motel and Resort Association.

A key part of the Senate package would refinance some of Michigan's tobacco settlement bonds to "provide an additional $50 million for tourism promotion funding, without a tax increase," said Yencich.

The House is expected to pass the three Senate bills proposed by Sen. Jason E. Allen, R-Traverse City, after making some minor changes, according to Yencich. The Senate approved them in late March.

However, the effect of Senate bills 1223/1224/1225 is only temporary, boosting the state budget for tourism promotion just in 2008 and 2009. Yencich noted the current year budget for Travel Michigan, the state government's tourism promotion department, is "only $10 million."

Another proposed bill would set a permanent budget for advertising/promotion by Travel Michigan, amounting to about $30 million a year. That amount would be funded by the state sales tax.

The permanent funding proposal is "a battle we're going to fight later," said Yencich.

According to Allen's Web site, the Senate package going to the House now will appropriate $50 million for use in 2008 and 2009. It also requires that at least 75 percent of the $50 million be dedicated to tourism promotion, with the remaining 25 percent for promotion of business opportunities in Michigan.

The bills also stipulate that the overall tourism marketing strategy must promote all four seasons in Michigan, not just the summer months. The legislation also includes safeguards so that the money will not be diverted to other purposes.

Allen cited tourism industry research that indicates that for every dollar a state government spends on promotion of its tourism, it receives two to three dollars back in tax revenue.

Norm Saari, chief of staff at Allen's office, said the total proceeds of the bonds to be issued would be $60 million, with $15 million of that for use this year and $35 million in 2009, with "an understanding" that the remaining $10 million would be available in 2010.

Richard A. Winn, general manager of the Amway Grand Plaza Hotel, is also chairman of the Michigan Lodging & Tourism Association. He said the Michigan state government spends far less on tourism promotion than many other states.

According to Yencich, the state of Wisconsin spends more than $15 million a year in tourism promotion, and Illinois spends about $50 million. Other state promotion budgets are Pennsylvania at $32 million, Texas at $63 million, California at $58 million, Hawaii at $85 million and Florida at $42 million.

Those state governments wouldn't be making those investments if they weren't providing a significant return on the investment, said Yencich.

"Our approach, short term and long term, needs to be to take a more nationalistic approach to our advertising, and draw people in from out-of-state," said Winn.

"The difference for us is, we're not a drive-through state. People don't get to experience us unless they (decide to) come to the state. We need to reach out to those people."

Yencich said Michigan has "a tremendous set of attractions and amenities. The tourism product in this state is, we believe, among the best nationwide: the most golf courses, the most registered boaters, the (most miles) of freshwater shoreline in the entire world. ... But you can't get someone to buy a product that they don’t know exists."

According to Yencich, 70 percent of the recreation traffic in Michigan has historically been Michigan residents, something to consider now in view of the state’s weak economy compared to other states.

"It's never been more important to reach out (to) those states that have stronger economies, containing people who are looking to vacation and experience new places," said Yencich.

The daunting cost of gasoline could be a potential benefit to Michigan, rather than a threat to tourism, according to Yencich. People who live in nearby states who might have been thinking about a motoring vacation out West this summer might "rethink those kinds of plans and try to vacation closer to home," due to the high price of gasoline, he said.

With the proposed increase in funding, Travel Michigan "could reach out into St. Louis and some of those new markets where we've never had (an advertising) presence, and bring those families to Michigan," said Yencich.

A major factor affecting Michigan tourism is weather, a topic on the agenda at Driving Tourism 2008.

Ironically, while many Michigan businesses and motorists just suffered through a long snowy winter with a lot of pavement damaged by repeat freeze/thaw cycles, there was a silver lining to it all, as far as the winter sports industry in Michigan was concerned.

Yencich said he spoke recently to a Northern Michigan ski resort manager. “They had a tremendous winter … a huge increase in the number of skiers and number of room nights sold."

The Michigan Lodging & Tourism Association works with Travel Michigan, with tourism studies faculty at Michigan State University and with tourism groups throughout the state in putting on the annual tourism conference. Winn said the association’s officials "expect 350 registrants this year, maybe more."

Gov. Jennifer Granholm may be one of the keynote speakers at the convention this year, said Yencich. The featured speaker at the session’s closing night event will be Michigan State University basketball coach Tom Izzo.

Yencich said the convention this year will showcase Grand Rapids, with evening events taking place at the Grand Rapids Art Museum, Frederik Meijer Gardens & Sculpture Park, and the new JW Marriott hotel.

The Michigan Lodging & Tourism Association is a 103-year-old Michigan trade organization, based in Lansing, representing more than 500 hotels, motels, resorts, and bed and breakfast outlets, comprising more than 30,000 guest rooms. Other membership categories are open to both for-profit and nonprofit organizations involved in some aspect of the tourism industry in Michigan.

The association successfully fought for passage of legislation in 2005 that now requires all schools to open after Labor Day, a measure to help extend the tourism season in Michigan.

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