Economic Development, Lakeshore, and Travel & Tourism

Region’s water economy swells

Report finds water industries create $666M West Michigan annual impact.

May 3, 2019
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Region water economy
One of the cruise ships that docks in Muskegon is the Pearl Mist, which holds just over 200 passengers. Courtesy Pearl Seas Cruises

(As seen on WZZM TV 13) A new study shows water-related tourism and industry creates an estimated annual economic impact of $666 million and supports nearly 6,300 jobs in West Michigan.

Muskegon and Grand Haven were the two area cities analyzed in the study showing Michigan’s ports and harbors in 2017 had an impact of approximately $19.7 billion with about 151,000 jobs supported. An estimated $15.4 billion of this total was derived from water-related tourism and recreation.

Facilitated by the Michigan Port Collaborative, which is a nonprofit representing the ports of Michigan and their communities, the finding is four times higher than any similar study in the state previously. That’s because beyond assessing direct spending, this study also analyzed ripple effects.

“We had a hunch the economic value of our ports and harbors was far greater than previously reported,” said Felicia Fairchild, president of the Michigan Port Collaborative.

Statewide, the study found water-related industries created $7.7 billion in labor income; the economic impacts of water-based tourism and recreation are nearly four times that of commercial industry; the state and communities collected $1 billion from water-based tourism; and the federal government collected about $1.3 billion.

The group said it plans to use the information gathered to promote its interests going forward.

“We will utilize the results to educate our legislators and state officials regarding the monetary value of our ports and harbors going forward,” said Marci Cisneros, treasurer of the MPC and executive director of the Grand Haven Area Convention Visitors Bureau.

A survey distributed between May and July 2018 via social media and email received responses describing 5,088 visits in the past two years. The survey asked respondents questions regarding their spending and water-based recreational habits.

The study was commissioned in November 2017 and conducted by MPC board members Vincent Magnini and John Crotts of the Institute for Service Research in Virginia Beach, Virginia, and Bill Boik, a consultant formerly of the Michigan DNR. Expert review of this study was conducted by Muzaffer Uysal of the University of Massachusetts.

The study was funded through a grant from the Michigan State Waterways Commission and matching funds from the Michigan State Housing Development Authority and the participating localities: Alpena, Cedarville, Detroit, Douglas, East Tawas, Elk Rapids, Grand Haven, Manistee, Marquette, Muskegon, Onekama, Rogers City, Saugatuck, Sault Ste. Marie, South Haven, St. Joseph and Traverse City. 

Muskegon

The total 2017 water-based economic impact for Muskegon is an estimated $358.3 million. This supported 3,896 jobs around Michigan with associated labor income of $139.1 million, $79.9 million of that direct spending.

Water-based tourism and recreation created $306.8 million in impact.

Muskegon residents and visitors spent roughly $24.4 million on lodging and $23.3 million in restaurants around Michigan. This supported 2,540 jobs around the state and $116.4 million in labor income, $70.6 million of that direct spending.

This overall activity indirectly contributed roughly $171 million to the state’s GDP, according to the study.

Muskegon is continuously ramping up opportunities to attract additional visitors.

Great Lakes cruise ships, for example, began docking in 2015 and last year docked nearly 20 times, allowing tourists to explore downtown and visit local businesses. Use of the local trolley company alone generates $14,000. Local mechanical contractors are sometimes called in to service the ships, which regularly receive in excess of 30,000 gallons of gas per load.

Since 2004, the Lake Express ferry has offered transportation to and from Wisconsin. In 2017, the ferry recorded nearly 700 embarkments in Muskegon.

With access to Lake Michigan and several other bodies of water, the area’s several thousand boat slips are most often occupied.

New festivals and events are being developed in Muskegon, including the Great Lakes Surf Festival, Burning Foot Beer Festival and the Stand Up For The Cure stand-up paddleboard fundraiser.

Muskegon County’s largest festivals are held directly on Muskegon Lake at Heritage Landing: Rockstock July 4th Festival, Moosefest Country Music Festival, Unity Christian Music Festival, Shoreline Jazz Festival, Michigan Irish Music Festival and other smaller events. Muskegon’s 150th anniversary celebration includes a three-day concert series at Heritage Landing July 11-13.

The activity comes on the heels of perception that Muskegon is unsafe or overly industrial, the study noted, and the community is making progress to break away from this perception.

The study noted the U.S. Army Corps of Engineers is able to continuously dredge the port because Muskegon meets the current criterion of moving at least 1 million tons of goods per year. An increase of that minimum amount could be problematic for Muskegon.

The study also said some of Muskegon’s competitors for leisure tourists have better water access for pedestrians; enhanced access, such as a pedestrian bridge, would help the city.

An earlier Business Journal story reported the Imagine Muskegon plans, which aim to improve water access and refocus the downtown toward Muskegon Lake.

Grand Haven

The total impact in the Grand Haven area was $307.6 million with direct spending accounting for $149.8 million.

Water-based activity supported 2,382 jobs, creating an associated labor income of $119 million.

Water-based tourism and recreation in the Grand Haven area accounted for an estimated $228 million, $125.2 million of that direct spending.

Grand Haven residents and visitors spent roughly $17.4 million in restaurants around Michigan and $17.6 million for lodging.

Water-based tourism and recreation in the Grand Haven area supported an estimated 1,891 jobs, with labor income of $86.6 million. A 2016 study found that 2.1 million people visit the Grand Haven harbor each year.

The economic activity generated $15.5 million in state and local revenues and $19.1 million in federal revenues.

The Grand Haven area also has a robust commercial component that complements the tourism and recreation sectors. About 1.3 million short tons of commercial cargo were handled in Grand Haven during 2017. The study noted that the area’s U.S. Coast Guard presence further augments the water-based economy.

With the newly renovated waterfront stadium on the Grand River, which opened during summer 2018, the tourism numbers are expected to increase. There also have been a number of recent improvements made to the catwalk, pier and lighthouse.

Potential threats noted include the harbor being continuously filled in by sediment, fluctuating water levels and invasive species.

There also is an expensive, unfunded need to replace 3,000 feet of sheet piling and boards on the boardwalk.

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