Pure Michigan wows em at tourism conference

March 30, 2012
| By Pete Daly |
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The Pure Michigan national advertising campaign is in the limelight. The release of data at the state conference on tourism in Grand Rapids last week indicates it brought 3.2 million visitors to Michigan in 2011 — and about $1 billion.

Adding to the good mood of the state’s tourism industry is the prediction by an MSU expert that tourism should bring in about 6 percent more revenue in 2012 than 2011, which was a very good year.

“The Pure Michigan campaign is delivering impressive results for our state, bringing millions of new visitors and their dollars to Michigan,” said Gov. Rick Snyder at the conference at the Amway Grand Plaza Hotel. “It is because of the campaign’s positive impact on Michigan jobs and businesses and proven return on investment that I have made consistent and substantial funding for Pure Michigan a top priority of my administration.”

On the heels of the launch of Michigan’s largest national tourism ad campaign to date, a new study by Longwoods International indicates that last summer’s Pure Michigan advertising campaign brought record numbers of out-of-state visitors to Michigan last year, who spent $1 billion and paid $70 million in Michigan taxes.

There was $14.2 million spent on Pure Michigan summer advertising outside Michigan last year, with almost $10.5 million spent on national cable television advertising and the remainder on regional market advertising in Indiana, Illinois, Ohio and Wisconsin. Travel Michigan, the state’s official tourism promotion arm, said Longwoods has calculated the state received $4.90 back for each dollar invested in Pure Michigan advertising in 2011. The cumulative return on investment since the Pure Michigan campaign began in 2006 is now $3.70, up from $3.29 last year.

The announcement last week states that of the 3.2 million out-of-state visitors lured by Pure Michigan last summer, 2 million came from the Great Lakes region and 1.2 million came from more distant markets around the country. In 2010, the Pure Michigan summer advertising motivated a total of 2 million trips from out of state, 1.2 million from the Great Lakes region and nearly 900,000 from more distant markets.

Michigan is only in its fourth year of national tourism advertising, “but we are making progress toward our goal of making Michigan one of America’s most popular summer vacation destinations,” said George Zimmermann, vice president for Travel Michigan, which is part of the Michigan Economic Development Corp.

The Pure Michigan national advertising campaign this year will include more than 5,000 Pure Michigan commercials on cable television channels through June, costing $12 million.

The state government commissioned the Longwoods International research on last year’s campaign. Doug Small, president of the Experience Grand Rapids convention and visitors bureau, was asked if he feels the Pure Michigan advertising was as effective as reported by Longwoods and he said, “There’s no doubt about it.”

Small described Longwoods as a phenomenal tourism research firm with a great reputation. “It’s as good as you’re going to get when it comes to the most objective data possible.”

Small said the travel and tourism business in Kent County last year “was through the roof, and we are a partner with Pure Michigan.”

Small said just two short years ago, Kent County had a hotel occupancy rate of 49 percent. “We finished 2011 at 57.5 percent occupancy.” He noted that the increased occupancy did not result from reducing room rates. In 2009, the hotel revenues were $93 million, and rose to $114 million in 2011.

“As occupancy has been growing, we’ve been able to maintain hotel room rate integrity,” said Small.

Small said Experience Grand Rapids expects hotel room revenue in 2012 to increase by another 5 percent over 2011. In just the first two months of this year, revenue was up 9.3 percent over the same time frame last year.

“You’ve got to give a lot of credit to Pure Michigan — and I do,” he said.

Small said he talks to his peers around the country, and there is “optimism in the air.” A key element is the return of the corporate travel sector, said Small, which shrunk dramatically during the recession.

He pointed to Detroit’s experience as a prime example. Last year, Detroit’s hotel occupancy rate grew at a faster pace than any other of the top 25 metropolitan markets in the nation. “Granted, they started a lot lower” than others, he added, but “they’ve shown, now, two years of sustainable growth.”

Convention and leisure travel picked up a little in Detroit, but it’s corporate travel that is driving its numbers, he said. “Corporate business in Detroit, which was basically devastated, has started to emerge again.”

About this time three years ago, Michigan State University tourism industry experts predicted a decline of 3 to 4 percent in the state’s revenue over 2009. This year, it’s very much the opposite.

Michigan’s $17-billion-a-year tourism market — one of the state’s largest industries — should have a very strong 2012, said Dan McCole, assistant professor of tourism at MSU.

McCole, who also spoke at the state tourism conference along with Sarah Nicholls, another associate professor of tourism at MSU, said tourism spending in Michigan jumped a surprising 8 percent in 2011 and should increase by 6 percent this year, reflecting the ongoing economic recovery. The data is contained in the annual tourism research conducted by MSU.

“As long as the weather is good — and that’s always the big ‘if’ — I think we’re going to see a very strong year for tourism,” McCole said.

Even though 2011 was 3 percent cooler and 16 percent wetter than 2010, spending on tourism was still double the projection the MSU researchers had made for last year. Spending projections are based on state sales tax and use tax collections.

Hotel occupancy in 2011 was up 7 percent statewide and 10 percent in Detroit, marking the second straight year that Detroit saw the biggest gain of any of the 25 major metro markets, Nicholls said.

The MSU researchers said Michigan’s tourism industry has been hurt by a statewide population decline and fewer people working in high-paying blue-collar jobs. But that trend has been at least partially offset by an increase in visitors from other states and countries.

Gas prices in Michigan increased 26 percent last year and continue to rise, with many areas now seeing unleaded prices around $4 per gallon. McCole believes this will have an effect on some destinations and businesses, but doesn’t think the jump in gas prices will have a significant effect on tourism for the state overall this year.

“Gas prices will certainly change some people’s travel behaviors, which will likely impact certain places more than others,” he said. “But we’re also finding that people are very protective of their vacations, so I don’t anticipate too many people canceling because of $4-per-gallon gas. Plus, the people we’re expecting to travel this summer are doing pretty well financially and are better able to absorb the increase.”

Travel Michigan, which runs the Pure Michigan campaign, matches advertising dollars for municipalities, including Traverse City and Ann Arbor, and attractions such as The Henry Ford Museum. This year, there are 40 partners in the program, including Experience Grand Rapids, up from 31 last year, for a total local and state investment of $3.7 million in advertising, up from $3.1 million, according to the MSU experts.

Last August, “Good Morning America” named Sleeping Bear Dunes National Lakeshore the “Most Beautiful Place in America” — the kind of publicity that could help the Traverse City area have an outstanding year for tourism, McCole noted.

McCole said he, too, has no reason to doubt the conclusions of the Longwoods study, adding that he understands the 3.2 million out-of-state visitors cited in the research came here specifically in response to the Pure Michigan campaign.

The change in tourism industry business year-over-year is impressive, said McCole, but he added it is “pretty consistent with what we’ve heard anecdotally about out-of-state visitors” from people in the industry.

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