Monday, June 25, 2007

Summer Means Tourism

Pure Michigan is upon us. That's the campaign promoted by Travel Michigan featuring broadcast media spots with Tim Allen at a cost of $8.7 million on out-of-state ads and $1.5 million in the state. (source)

So, how are we doing?

In March, the Michigan Travel Commission released the Michigan Tourism Strategic Plan, the product of a vast collaborative effort initiated in September of 2005.

From the Executive Summary:
"Michigan is primarily a regional tourism destination drawing about 70% of its business from Michigan residents and 20% from residents of adjacent states and Ontario. Its reliance on this regional tourism market is problematic both in the near term and the long run. The Michigan economy has been weak for several years and is projected to remain so for some time. Population growth in this region of the US is projected by the US Census Bureau to lag the rest of the country, which poses a long term threat to Michigan’s tourism industry."

So we have some challenges.

I spoke with George Zimmermann, Vice President of Travel Michigan. "We have traditionally marketed the state regionally for budget reasons. The current Travel Michigan budget is $15.6 million, and the promotion part of that is $13.2 million." About 80% of that is spent out of state and 20% in state. The main regional markets include: Chicago, Cleveland, Cincinnati, Indianapolis, Milwaukee and Ontario.

Good news for the immediate future: passport rules have been eased and the Canadian dollar is strong. Michigan saw improvement in May's unemployment figures in part due to 19,000 new hires in leisure and hospitality services mainly in northern counties.

But like the arts, tourism promotion endured a steady funding decline from 1990 to 2005. Zimmermann said,"In 1990 we had the seventh largest state tourism promotion budget and by 2005 we had dropped to 31st. We did get a reprieve when the 21st Century Jobs fund was created. That provided a one-time funding boost that brought us up to the $15.6 million level. So this year we're back up to 17th. But with the 2007 budget we're at the end of that money."

In addition to maintaining regional promotion efforts, the next big challenge is transforming Michigan from a regional tourism destination to a national destination and ultimately, a global one. Consensus among tourism professionals holds that Michigan can become a national and global destination.

But, given the likely shrinkage of the 70% stay-at-home tourism market, what is being done to grow the other 30%--in particular, the 10% coming from somewhere other than our region?

The May 2007 Travel Michigan Newsletter reports a recent initiative to reach German travelers:
"Travel writers from the North Rhine-Westphalia area of Germany recently toured Michigan to help promote a new KLM/Northwest Airlines direct-flight from Düsseldorf to Detroit. ...The writers represented publications with a combined circulation of over 2.8 million readers. The new direct flight, which begins service in early June, is expected to encourage more visitations through the Michigan gateway by German travelers, seeking a combination of exciting city experiences, active outdoor soft adventure and a more relaxed, freshwater Great Lakes holiday."

This program was part of regional promotion by Great Lakes of North America. Zimmermann said,"The one international effort we are involved in is a consortium of the Great Lakes States, called Great Lakes of North America. It’s been around for almost 20 years. The state tourism offices in Pennsylvania, Michigan, Ohio, Indiana, Illinois, Wisconsin, Minnesota, jointly fund regional promotion in Europe. It’s a way to have influence in the market. We are able to do promotions to get travel writers to come in and we work with tour operators to make sure they feature the Great Lakes in their catalogs and programs."

Zimmermann was very enthusiastic about recent performance of the Travel Michigan website. Michigan's tourism industry web site,, is being tauted as busiest state tourism web site in the nation. "Our marketing strategy is to get consumers to go to the website, get more information there and then travel. So this is very encouraging," Zimmermann said.

What about 2008? "With 'Pure Michigan' we feel like we have a compelling campaign at this point, but what markets we can be active in next year will be 100% dependent on budget. That will determine if can we even maintain the six primary out-of-state regional markets. That will be strictly a financial decision. Once we know what our budget is we can figure out what to do with it,"he said.

But here's the bottom line--“Visitors spend about $17.5 billion annually, which employs 193,000 people statewide and contributes $971 million in state taxes.”

Tourism, it's Pure Michigan.