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Saturday, August 30, 2008
Michigan Tourism Industry Looks At Down Summer Travel Season
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| LANSING - Now that Labor Day weekend is here and the peak summer traveling months are over, the tourism industry and the state are beginning to take stock of how far the millions spent in marketing have gone to increase travel in the state - some say the state's stock is rising, others say travel promotion hasn't outpaced troubling economic conditions that lead to fewer vacations.
George Zimmermann, vice president of Travel Michigan, said that the state won't know how many travelers made Michigan their destination this summer until results from surveys come in around January, but after talking with visitor's bureaus around the state, he is confident that more people enjoyed a night or two away in the Great Lakes State this summer than last.
Steve Yencich, CEO of the Michigan Lodging and Tourism Association, said that he has also only heard anecdotally from his members about their season's success, but would guess that occupancy has at least held steady this year over last.
But others said that even with success in pockets of the state, high gas prices and a sluggish economy probably discouraged many travelers from trekking to Michigan destinations this summer.
Jack Matthias, chair of the Hillman-Fletcher Pond-Thunder Bay Visitor Bureau said that although he and others have certainly felt the effects of increased state spending on travel promotion, he thinks travel is still likely down.
"Travel Michigan is putting a bright face on the tourism picture because they don't want to add to the bad news that is already coming out of the state," he said.
Michigan State University professor Robert Richardson, who foretold fewer travelers this spring when he spoke at the Driving Tourism Conference, said that, true to his prediction, nationally, people drove 12 billion fewer miles in June than the year prior in order to save on fuel and likely traveled less over the summer in general.
Smith Travel Report, an industry publication that tracks occupancy levels around the country, said that in June, Michigan's hotel stays slumped by 1.7 percent over the year before, bringing the occupancy levels in the state to around 61 percent that month.
With a year-to-date occupancy rate of 50.7 percent, Michigan ranked dead last in occupancy levels among the 50 states.
Michiganders also took hotel rooms and to the roads less in June, 8.4 percent less on rural roads and 6.6 percent less on urban roads, said Richardson.
While all of that gas conservation may perhaps be good for the environment, it's bad news for tourism.
The Mackinac Bridge, for example, had 11 percent fewer travelers in June than last year, while some state parks took substantial hits to their visitation rolls, Richardson said.
At Sleeping Bear Dunes there were 21 percent fewer visitors in the first six months of the year than in 2007. Meanwhile, entry into Pictured Rocks National Lakeshore is down by 12 percent and Isle Royale National Park has had a whopping 30 percent fewer visitors.
Mary Dettloff, spokesperson for the Department of Natural Resources, said that as of August 23, reservations for campgrounds are down 5.1 percent overall in the state from last year.
While some parks in the state actually boosted their numbers, parks in the Upper Peninsula dropped in occupancy enough to drag the entire state average down.
Especially in the central and eastern portions of the UP, declines for overnight stays were as high as 12 percent.
Richardson said fewer people crossed over into the Upper Peninsula because of a combination of higher gasoline prices, high home foreclosures, and persistent unemployment.
Dettloff attributed much of the lag in campers to June's bad weather.
Hotel occupancy rates in some areas backed up the conclusion that travelers opted out of booking a rainy campsite. For example, there were fewer overnight state park visitors in Marquette in June, yet hotels had 3 percent more guests than last year.
Even after the clouds lifted in July and August, the usual suspect - steep gas prices - took most of the blame for lower traffic at state parks, since the areas that in other years have gotten visitors from lower Michigan didn't see as many travelers this year willing to pay for the scenic camping experience "up north," Dettloff said.
But, what harmed the UP may have actually helped other parts of the state, she said.
Travelers from the south side of the state who usually head north for their wilderness experience stayed closer to home this summer, leading parks on that side of the state, such as in Brighton, to experience a "bonanza" year, Dettloff said, filling sites to capacity for the first time in years.
And while pockets of tourist activity suffered, others, such as Grand Rapids, Traverse City and Marquette, thrived this summer, reporting increases in hotel occupancy by as much as 10 percent over last year.
Pat Black, president of the Marquette County Convention and Visitors Bureau, said that after working for years in the hotel industry and seeing severe slumps at hotels over Labor Day Weekend, she is surprised that many lodgings in her area are booked to capacity over the final official weekend of summer.
Although she doesn't yet have the data, Black said she thinks July and August occupancy increases will be much higher than June's 3 percent.
In large part, most areas that have managed to attract a steady stream of visitors over the years attribute their success to out of state guests.
In fact, Matthias, who also owns Thunder Bay Resort in Hillman, on the state's east side, said non-resident charters for motor coach tours signaled the only improvement in business his resort saw this year over last.
He said the east side of the state has taken more than its share of the estimated $675 million in net losses from travel declines in 2007 and the additional $1 billion in losses he estimates the state will see from less in-state traveling 2008.
And even though the situation on that side of the state, which was dire in the spring and last winter, has improved over the summer, likely due to funding increases that mean $10 million more dollars spent on advertising this year than three years ago, the state is still dead last in its year-to-date occupancy rates, he said, quoting the Smith Travel Report.
"The $10 million isn't enough to offset the decline in in-state travelers," Matthias said, adding his prediction that the state will lose $1 billion and 11,000 tourism jobs from fewer Michigan travelers that lead to staff layoffs at hotels, airlines and the like.
The travel report said nationally in June, hotel stays are down by 4.5 percent, a number that Michigan would have contributed to at much higher rates, said Mr. Matthias, if it weren't for the film incentive package that resulted in thousands more booked rooms.
However, he said, the hotels helped by the film package are in concentrated areas such as Grand Rapids, Traverse City and Detroit and include about 20 properties at most, which doesn't benefit the rest of the businesses around the state that are struggling.
"It's likely that, excluding the film program, Michigan hotel occupancy was likely down at least as much as the national average (and) our job cut backs have continued at high levels in the auto industry, and other segments," Matthias said. "(Applying) a 4.5% decline in hotel occupancy to about an $18 billion dollar industry in Michigan, that would be a net decrease of about $810 million, equaling 8,500 to 9,000 jobs lost this year."
For his part, Matthias said he has reduced his staff by 25 percent and he estimates that others in his area have had to make similar cuts.
In order to avoid a further decline in jobs and in fact bring in new tax dollars for the state, Matthias has been pushing lawmakers to adopt SB 690 and make it effective for FY 2008-09.
In combination with the $30 million lawmakers have already authorized for the next fiscal year for Travel Michigan, Matthias' plan would tack on the revenue from the Senate bill as well, amounting to a $60 million promotional budget.
He said that investment would generate up to $1.7 billion in additional out-of-state travel spending for the state, based on studies done by Longwoods International that every dollar spent on promotion generates $40 in additional travel spending and $3 in tax revenues.
While he worked with fervor at the beginning of the year to convince lawmakers to pass the bill by October 1, Matthias said this week that he feels he has failed to get through to the Legislature that there is no reason not to double the budget when the rate of return is so good.
"Most people in the Legislature thought they dealt with this issue already in the spring (when they approved the $30 million for 2008-09)," he said.
Considering the bill's sponsor, Sen. Jason Allen (R-Traverse City), said he'll reintroduce the bill next session if he needs to but that he understands that pressure to get it passed this year was lifted by the one time stipend, Matthias is likely correct that the bill won't see any movement in the near future.
Allen, the chair of the Senate Commerce and Tourism Committee, said he sees his bill, which allocates 25 percent of certain tax revenues to travel promotion after funds are deposited for other expenditures, as a way to sustain the current $30 million level of funding in perpetuity and doesn't intend it to piggy back on the one time stipend.
Others in the travel industry agree with Allen's approach, but aren't quite as content to wait months for its passage.
Black, from Marquette County, said she plans to attend the next committee hearing on SB 690 to ensure it gets passage as soon as possible and Annette Rummel, CEO of the Saginaw County Convention and Visitors Bureau, said that she sees the bill as "an important piece of legislation, not only for tourism, but for the entire economy."
This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com
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Author: Staff Writer
Source:
Gongwer News Service
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