Tourism Fund Hopes for Boost of $9.5 Million

2010-03-11 / Front Page

‘Tidal Wave’ of Impact Rolled Through State From Michigan Campaign Last Year
By Mark Tower

Another $9.5 million or more may be added to Michigan's meager tourism promotion budget with Senate passage Wednesday, March 3, of a bill to put more money into the Michigan Promotion fund, which supports tourism and business development in the state. It is administered by Travel Michigan.

This new money will be taken from the state's general fund and will be added to the $5.4 million already taken from the Michigan Strategic Fund. At $15 million, it will still be only half of the $30 million shelled out in 2008 for regional and national tourism campaigns promoting Michigan destinations, although the House Tourism and Recreation Committee may try to add more when it looks at the bill this week.

The Senate bill was sponsored by Senator Jason Allen.

This large price tag last year consisted of about $19 million for advertising and $11 million for the Pure Michigan Web site and other costs.

Travel Michigan Director George Zimmermann said that $15 million in 2010 would pay for advertising in nine Midwest markets, including major cities in Illinois, Indiana, Ohio, Wisconsin, and Ontario, which all received Pure Michigan advertising in the 2008 and 2009 campaigns.

What would be cut, according Mr. Zimmermann, would be $10 million that bought 7,900 cable television advertisements in 2009 that were seen by about 60 million viewers across the country.

“After going national for the first time last year, for it to not be there this year would be a tragedy,” he said. Pulling out of an advertising market after one year, he said, risks losing the recognition that was built.

According to a study by Longwoods International, the 2009 national campaign alone sparked 680,000 trips to Michigan from outside the Great Lakes region, and those new visitors spent $250 million in the state and contributed $17.5 million to state taxes.

The study went on to say that the return on investment was $5.34 in state tax revenue for every dollar spent in the regional campaign, and $2.23 in new taxes for each dollar spent in the new national campaign.

According to a study done by the same firm on the advertising campaign between 2004 and 2008, each dollar spent on advertising generated $2.86 in state tax revenue.

This high rate of return in the national campaign's first year surpassed the expectations of Travel Michigan officials.

“We were very pleased with those results,” Mr. Zimmermann said. “We are sitting here with a campaign that we know works.”

Steve Yencich, president and CEO of Travel Michigan, said the rate of return for local business in tourist areas is even higher than for the state, saying that each dollar spent on Pure Michigan advertising generates about $40 in revenue for the tourism industry.

“It is not a ripple effect that went through Michigan because of this campaign,” Mr. Yencich said, “it's a tidal wave.”

Echoing Mr. Zimmermann, he noted the most crucial part now is to continue the marketing strategies so the effects of last year's campaign do not disappear in 2010.

“If you market tourism in March and April, people will come in June and July,” he said. “It takes time, repetition, and consistency. That is why it's so important to keep funding it.”

Other sources also noticed an unexpected increase in tourist traffic during the summer season in 2009, including the Mackinac Bridge Authority, which reported 103,587 more cars this year than last year crossing the bridge from April through August.

The St. Ignace Visitors Bureau reported hotels saw a slight increase, about 0.29%, in business during the busy month of July, and that many hotel employees said there were more out-of-state license plates than usual. Mike Lilliquist at the St. Ignace Welcome Center said he also observed more out-of-state plates in 2009.

“Overall, the campaign seems to definitely be working,” Mr. Lilliquist said. “I think it has changed people's perspective of Michigan, that it is not just Detroit.”

He said visitors from places like Texas, Delaware, Connecticuit, and Maryland visited the Welcome Center and mentioned, without being asked, that they had seen the television advertisements.

“People are just curious,” Mr. Lilliquist said. “It has piqued their curiosity as to what Michigan has really got to offer.”

Dan Trotochaud from the Baymont Inn and Suites in Mackinaw City said he noticed many more out-of-state visitors than usual during the 2009 season, from as far away as Georgia, Florida, Alabama, and South Carolina.

“We are seeing guests from greater distances this year than we have ever seen,” Mr. Trotochaud said. “Without that campaign, it could have been a very dismal season. Occupancy for 2009 was actually up slightly for us.”

Tourism in Michigan is estimated by some sources to be a $17.5 billion-a-year industry that employs 200,000 people. In Mackinac County, residents depend on seasonal employment and virtually all local business is in some way tied to tourism.

Mr. Zimmermann said deadlines are looming for spring and summer advertising and he hopes the legislature finds funding for it soon.

“The clock is running,” he said. “We haven't been able to have our agency place spring and summer media yet because we don't have the spending power. Until it is a done deal, we can't really act.”

Getting advertising contracts signed before summer hits is important to placing ideas in people's heads before they make their travel plans, Mr. Zimmermann said.

“We wouldn't start running our summer advertising on July 1,” he said. “At that point, it's too late.”

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