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Wednesday, 04 April 2012 09:09

Gas price impact on tourism negligible

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GRAND RAPIDS — Even amid high gasoline prices, Michigan’s tourism industry should have a strong year in 2012, Michigan State University researchers say.

An annual outlook from MSU projects a 3 percent increase this year in travel volume over 2011 and a 6 percent increase in travel spending. Travel prices should grow 3 percent over a year ago.

Dan McCole“We are expecting a very, very good year for Michigan tourism,” said Dan McCole, an assistant professor of tourism at MSU.

The difference in the projected growth in travel volume and travel spending for 2012 stems from a tendency by both in-state and out-of-state travelers to remain in one location for a longer period, said Sarah Nicholls, an assistant professor of tourism at MSU.

“We’re spending more and we’re staying more once we get to our destination,” Nicholls said.

Nicholls and McCole presented their predictions at the Pure Michigan Governor’s Conference on Tourism on March 27 in Grand Rapids.

Despite gas prices that were hovering above $4 per gallon last week, McCole didn’t see them having much of a large effect on travel decisions. Gas prices typically peak in May or June and most people who want to travel have the economic ability to absorb the higher prices and have gotten over the resulting psychological effect by the peak summer travel season, he said.

Travelers are “very protective of their vacations, so I don’t anticipate too many people canceling because of $4-per-gallon gas,” said McCole, whose outlook last week came just prior to gas prices spiking above $4 a gallon.

“Gas probably doesn’t matter that much” on travel decisions, he said. “We don’t think it’s going to have an overall effect on the state this year.”

The average price for a gallon of gas as of March 28 was $4.12 per gallon in Grand Rapids, versus $3.97 a week earlier and $3.60 a year ago, according to gasbuddy.com.

Gas averaged $4.13 per gallon the Kalamazoo area, which compares to $3.98 the week before and $3.60 a year earlier, gasbuddy.com reports. Across Michigan, gas averaged $4.10 per gallon as of last week.

Even if high gas prices do alter plans for some travelers, those people who defer a long trip may instead opt for a shorter drive, for instance, to Lake Michigan’s beaches that generally draw well from large population centers such as those in Detroit and Chicago, McCole said.

As always, the single biggest factor influencing travel decisions remains the weather.

“If the weather is freakish, that’s going to override all of this anyway,” McCole said.

Driving the industry up in 2012 are improved national and state economies, lower unemployment and higher consumer confidence, he said.

In 2011, even though it rained a little more than in 2010, Michigan’s $17 billion tourism industry enjoyed solid growth rates. Statewide hotel occupancy rates alone grew 7 percent, Nicholls said.

Travel spending grew 7.8 percent last year and prices increased 2.7 percent, according to MSU. Data show 2011 travel volumes actually declined 2.2 percent from 2010, a result which McCole calls “a little odd” and could reflect a need to improve data collection.

“No one believes there was a 2 percent decline in travel in the state” in 2011, McCole said. “Clearly we need to look at that.”

Read 1572 times Last modified on Sunday, 12 August 2012 09:55

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