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Business Review Western MI
Business Review Western MI
Priming the Tourism Pump
(2007-08-29)
(wgvu) - Tourism promoters hail a proposal to significantly boost funding to
better promote Michigan as a travel destination, saying it would help
the economy, and more than pay for itself.

A bill introduced by Sen. Jason Allen, Republican of 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 to spend on a promotional
campaign.

Backers of the idea say it's long overdue, particularly as several
other Great Lakes states have increased promotional budgets while
Michigan's except for a current one-time appropriation has
generally remained stagnant amid its ongoing fiscal problems.

I definitely think it's time to get serious about tourism. It's
obviously part of what keeps us going, said Sally Laukitis, executive
director of the Holland Area Convention & Visitors Bureau, which pegs
the local economic impact from tourism at $108 million.

Travel Michigan for several years has received $5.7 million for
promotion, primarily targeting Chicago, Indianapolis and Cleveland. The
amount was bolstered the past two years by a $15 million, one-time
allocation from the state's 21st Century Jobs Fund.

As the state continues to struggle economically, elevating spending on
tourism promotion would generate immediate re turns, argues Stephen Yen
cich, CEO of the Michigan Hotel, Mo tel & Resort Association.

The state's $17.5 billion tourism industry is highly dependent on
in-state travel by Michigan residents. Investing in a promotional
campaign that is more national in scope, rather than aimed at
neighboring markets, would bring more travelers and their money
into Michigan at a time when in-state travel is down, Yencich said.

The most recent Michigan Tourism Index issued by Comerica Bank reflects
ongoing weakness, continuing a downward trend of the past four
years.

Given the state of our economy, the bottom has dropped out of that,
and there's never been a more important time to reach out to other
states with a more vibrant economy, said Yencich, who also heads the
industry coalition Tourism Improving Michigan's Economy, or TIME.

This is the time to make that investment, he said. It's time
for Michigan to reach out into those markets and aggressively
compete.

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.

Backers of the bill believe that kind of return on investment will
enable it to earn passage. But one economist questioned the wisdom of
using public tax money to promote a single industry.

Comerica Bank chief economist Dana Johnson believes the state's focus
needs to go toward creating the best business climate possible. While he
doesn't disagree that better-funded tourism promotion will yield
results, Johnson takes the broader philosophical view of the issue.

I get a little worried when states start picking winners and losers
and pick one industry over another, he said. Just create a great
business environment, and things will sort themselves out.

Holland's Laukitis counters that tourism isn't like any other
industry because unlike products made in Michigan and sold elsewhere
it brings people directly into the state.

Promoting Michigan nationally as a travel destination creates a better
image for the state overall, Laukitis contended.

She also cited examples where she's seen people, after visiting the
state on leisure trips, decide to move their residence or business.

Tourism is one thing that will make people go, Hmmm...' she
said. Tourism is economic development.

Beyond the $17.5 billion in direct spending, tourism in Michigan
supports 193,00 jobs and generates $971 million annually in state tax
collections.

Allen notes his proposal could lift the economic impact higher without
any new fees or taxes.

In my book, that's smart economics and sound public policy. he
said.

The bill comes as a task force formed by House Republicans is looking
at ways to strengthen the tourism industry.

Rep. Ken Horn, a Frank enmuth Republican who chairs the Tourism Task
Force, said he likes Allen's bill. Increasing funding for tourism
promotion has been a common theme voiced in a series of hearings the
panel has held across the state, he said.

We all have something in common in the industry and something to
rally around, Horn said Friday prior to a hearing in Spring Lake.
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