Gov. Jennifer Granholm’s proposal to pump $60 million over two years into tourism and business promotion is a sign the state is finally taking the industry seriously, travel promoters say.
Part of a $1.8 billion economic-stimulus package included in the governor’s 2009 budget proposal, the money would temporarily give the tourism industry what it has long wanted — a substantial increase from the state in promotional funding.
While the money Granholm proposed is a long way from final, it provides the industry with a rallying point to push its cause even harder at the grassroots level.
“It is inspiring and it is motivating and we’ll continue to work toward our goal,” said Marci Cisneros, executive director of the Grand Haven Area Visitors Bureau and outgoing president of the Michigan Association of Convention and Visitors Bureaus.
“Our hope is we’ll get as close to that money as possible,” she said.
Language in Granholm’s fiscal year 2009 budget proposal, unveiled last week, provides for a one-time increase in funding for tourism and business promotion from $30 million to $90 million over two years.
The proposed funding comes as tourism promoters argue that the industry could provide the state’s beleaguered economy a much-needed boost by drawing more visitors from around the nation to Michigan to spend their vacation money.
“There’s never been a more important time for us to come together and reach an agreement that produces meaningful change for our state’s economy — and additional money for tourism promotion is just that,” said Steve Yencich, CEO of the Michigan Hotel, Motel and Resort Association and head of a coalition pushing for greater promotional funding.
“The product is there. It’s the promotion that needs work, and you can’t get someone to buy something they don’t know is there,” Yencich said.
Michigan lags well behind other Great Lakes states in tourism promotion, he said.
The additional funding, of course, is subject to the legislative appropriations process that will play out in the coming months, and tourism would not get all the money. Part of it would go to pump up the Michigan Economic Development Corp.’s promotional budget that seeks to lure new business investments.
But the proposal is seen as a proverbial step in the right direction and signifies a changing attitude toward how the industry is viewed in Lansing, tourism promoters say.
“People are beginning to realize that it is successful and an important part of our economic puzzle,” said Dave Lorenz, vice president of Travel Michigan, the state agency responsible for tourism promotion.
Granholm’s proposal comes as the industry continues pushing for an annual, permanent $30 million allocation in the state budget to take the MEDC’s award-winning Pure Michigan campaign national. The campaign now primarily targets markets in border states.
Legislation introduced last summer by Sen. Jason Allen, Republican from Traverse City, would earmark a portion of revenue from the state’s six percent sales tax to pay for tourism promotion. The measure, if approved, would generate roughly $30 million annually.
In her State of the State address last month, Granholm voiced support for Allen’s bill and higher spending on tourism promotion.
“We agree that we must significantly increase our advertising of this beautiful state to attract tourists and businesses,” Granholm said. “We are eager to pass what will be the largest investment in marketing Michigan in our history, expanding to new markets, trumpeting our virtues across the nation and around the world.”
Advocates of higher spending on tourism promotion cite data showing a large return on investment that would incur in the same year.
A 2006 study, conducted by Toronto-based Longwoods International and commissioned by the Motel, Hotel and Resort Association, concluded that spending $30 million annually on a broader promotional campaign could generate $1.24 billion a year in additional economic impact and more than pay for itself through $87.3 million in incremental state tax revenue.
The industry generates an estimated annual economic impact of $18.8 billion, employs more than 200,000 people and produces $1.1 billion in state tax revenue.
Travel Michigan for several years has received $5.7 million annually for promotion, primarily targeting Chicago, Indianapolis and Cleveland.
The amount was bolstered the last two years by a $15 million, one-time allocation from the state’s 21st Century Jobs Fund.
Travel Michigan is convinced that taking the Pure Michigan campaign national and sustaining the message would pay dividends, Lorenz said.
The increased funding the last two years enabled Travel Michigan to make “great strides” in the markets it presently targets.
Potential markets for expanding the Pure Michigan summer campaign include Dallas and St. Louis, Lorenz said.
While the passage of Allen’s bill is the ultimate goal for the industry, Cisneros sees the Granholm proposal as a potential opportunity to gather data on the return on investment of high promotional spending to use later.
“We would see it as an opportunity to prove the ROI and finally have an opportunity to showcase that this industry brings long-standing value and is worth investing in competitively with other states,” Cisneros said.