Mich. aims more cash at tourism

Economists say Pure Michigan campaign, Super Bowl, Tigers offset economic issues last year.

Jennifer Youssef / The Detroit News

Despite a sour economy and high gas prices last summer, Michigan tourism held its own in 2006 with the help of the biggest advertising blitz in the state's history, some high-profile events and a new law that delayed the start of school until after Labor Day.

The $13.2 million "Pure Michigan" marketing effort that targeted out-of-staters, Super Bowl XL, the Detroit Tigers playoff run and lower gas prices at the end of last year helped offset the economy's pinch on tourism, according to tourism officials, industry professionals and economists.

Pure Michigan is back for a second year to try to help the state's second-largest industry tread water until the economy turns around.

"If gas prices stay in check and the economy doesn't get any worse, I think the advertising will have an impact," said Ken Hayward, vice president of sales and marketing at the Grand Hotel on Mackinac Island, which had a small bump in business in 2006. "I feel strongly that the ads are good."

Travel Michigan used half of a two-year, $15 million grant it received last year to help pay for Pure Michigan; the other half will be used this year to continue the promotion. The grant bumped the state to No. 14 nationally in tourism promotion spending in 2006 from No. 31 in 2006.

Because 70 percent of the $17.5 billion spent on travel in 2005 came from in-state residents, Pure Michigan's aim was to lure out-of-state vacationers, and their disposable incomes, to the state's tourist attractions, said George Zimmermann, vice president of Travel Michigan, the state's tourism agency.

The ads targeted the markets of Milwaukee, Cincinnati and southern Ontario for the first time. They also were shown in previously targeted areas -- Cleveland, Indiana and Chicago -- as well as Michigan.

The grant from the state's 21st Century Jobs Fund expires this year, so a newly formed coalition already is lobbying for more money for 2008.

Tourism Improving Michigan's Economy, spearheaded by the Michigan Hotel, Motel and Resort Association, is so pleased with the campaign's results that it is asking the Legislature for additional money to boost the tourism promotions budget to $30 million.

It likely will be a tough sell, given the projected $800 million state budget deficit, but tourism advocates are pushing ahead.

"We need to get the word out," said Steve Yencich, president and CEO of the association. "A compelling argument is that the hotel industry contributed $35 million to $40 million to the economy last year."

More money would allow Travel Michigan to expand the campaign to more markets, Zimmerman said. "It's crucial to continue to get the message out to other states."

A final tally of 2006 tourism spending in the state won't be available until this summer, but Zimmerman says it was "up a little bit, but not dramatically."

Hotel occupancy in Michigan was up 0.9 percent in 2006, according to the annual report from Smith Travel Research. The amount of money hotels made per available room was up 6 percent.

Comerica Bank's quarterly Michigan tourism index, released last week, showed the fourth quarter of 2006 was down 1.3 percent from a year earlier, but was better than the first three quarters of the year.

Dana Johnson, chief economist at Comerica, was careful not to attribute the improvement to any one factor, but he believed lower gasoline prices, warm temperatures and the ad campaign may have played a role.

"To me, the broader picture is that tourism, just like everything else in Michigan, isn't doing great, but it's getting better," he said.

The strain of the economy, however, is showing. On Friday, Great Wolf Resorts announced it expects to take a $51 million charge to its fourth-quarter earnings, in part because of slow business at its Great Wolf Lodge water park resort in Traverse City.

At the Grand Hotel, occupancy rose 2 percent in 2006 over the previous year, Hayward said.

"We had a good 2006, not a great 2006," he said. "There's still room for improvement, but it was a positive year for us."

Hayward attributes the increase in visitors, at least in part, to the ad campaign. He said there is already a 6 percent increase in the number of reservations this year because of an increase in out-of-state conventions.

Crystal Mountain Resort, southwest of Traverse City, had its best-ever July in 2006, sparked by a new water park and 36-hole golf course. Resort officials credit the state's ad campaign.

"Overall, (business) was down a little bit," said Brian Lawson, public relations manager. "But summer was good; this July was the best July we ever had."

You can reach Jennifer Youssef at (313) 222-2319 or jyoussef@detnews.com.