Published in Economic Development
An analysis by Indianapolis, Ind.-based Strategic Marketing & Research Insights shows the Pure Michigan campaign generated $9.28 in tax revenue from visitor spending for every $1 in state money spent on the advertising. An analysis by Indianapolis, Ind.-based Strategic Marketing & Research Insights shows the Pure Michigan campaign generated $9.28 in tax revenue from visitor spending for every $1 in state money spent on the advertising. COURTESY PHOTO

Tourism promoters expect action to restore Pure Michigan funding

BY Sunday, January 19, 2020 05:45pm

A lack of state funding for the popular Pure Michigan campaign that promotes the state as a travel destination complicates plans for tourism promoters now preparing for the 2020 summer season.

To get the best rates and ad placements, they need to start buying soon. Waiting two or three months to buy ads would likely result in them paying higher rates and not getting the best positions.

“Summer is our big season, so we’re coming into a critical time,” said Marci Cisneros, executive director of the Grand Haven Area Convention & Visitors Bureau.

“We are already missing out on ad buys. Right now is when things are in play for later this year and into next year,” Cisneros said. “It’s something we may not see or feel right now, but it’s already having a negative impact. The sooner we can get it resolved the better.”

The Grand Haven Area CVB for years has partnered with other communities along Lake Michigan on a “Beachtowns” summer promotion using the Pure Michigan brand.

Beachtowns and other Pure Michigan promotions are on hold after funding for the campaign got caught up in the fall budget battle between legislators and Gov. Gretchen Whitmer. More than three months after the start of the state’s 2020 fiscal year, Pure Michigan remains unfunded.

The lack of a Pure Michigan campaign “would be a significant negative impact to our economy” in Grand Haven, a popular summer destination where tourism in 2018 had an estimated economic impact of nearly $80 million, according to Cisneros.

Despite the present lack of funding for Pure Michigan, there is hope in Lansing for travel promoters.

A state lawmaker from the Traverse City area in December proposed legislation to fully restore $37.5 million in funding for the decade-old Pure Michigan campaign.

“From tourism to business location decisions, we want people to come to our great state, and the Pure Michigan campaign brings them here,” said state Rep. Jack O’Malley, R-Lake Ann. “Pure Michigan has been a fantastic way to promote everything our state has to offer — from the Upper Peninsula to Detroit and everywhere in between. It benefits every region of our state, and this funding must be restored to help continue Michigan’s economic comeback.”

Travel Michigan, a unit of the Michigan Economic Development Corp. that promotes the state’s $4.2 billion tourism industry, also has felt the effects of the funding veto. Lacking an ability to conduct a winter travel campaign, Travel Michigan experienced a 35-percent decline in traffic to its Michigan.org website in early January compared to the same period a year earlier, said Vice President Dave Lorenz.

Website visits “are a very good indicator of the intent to travel,” as prospective travelers seek information on destinations, Lorenz said. The decrease in website traffic is a “direct sign that the failure for us to have our winter advertising out there right now is already hurting us,” he said.

“We already basically lost winter,” Lorenz said, noting Travel Michigan staff so far has sought to use public relations, news media outreach and social media to continue promoting the state.

Travel Michigan received $36 million in state funding for the Pure Michigan campaign in 2019, an amount consistent with what was allocated in prior years and a large portion of which is spent for promoting summer travel.

In 2018, the agency spent nearly $16.5 million alone for regional and national campaigns for the summer travel season. Using TV, radio, print, digital and outdoor billboard ads, the regional ads targeted the key travel markets of Chicago, Ill.; Milwaukee, Wis.; Indianapolis, Ind.; and Cincinnati, Cleveland, Columbus and Dayton, Ohio.

Travel Michigan also matches dollar-for-dollar spending by local visitor bureaus and businesses for localized, co-operative campaigns that use the Pure Michigan theme. That includes Beachtowns, which in 2019 included Grand Haven, Holland, South Haven, St. Joseph, Muskegon, Silver Lake Sand Dunes and Saugatuck.

Spending on the co-op campaigns last year totaled about $7.5 million, Lorenz said. Because local partners needed to set 2020 budgets, Travel Michigan may not have as many co-op campaigns and “extension of the brand” for this summer as in past years, he said.

Support bolsters case

Lorenz is confident that legislators will enact Rep. O’Malley’s bill and that Gov. Whitmer will sign it to restore full funding for Pure Michigan in time to mount an ad campaign for the busy summer travel season.

The veto of Pure Michigan’s 2020 funding resulted from the broader budget debate, rather than any standing opposition to the annual appropriation, Lorenz said.

“It’s more likely that there will be funding than not,” he said. “Pure Michigan just kind of got stuck in the debate between the legislature and the administration about the budget. We were just kind of collateral damage in that whole conversation.

“The good thing is that the vast majority of the legislature and the administration support us. They understand the value of Pure Michigan, but they also have these bigger-picture issues that they needed to discuss. We got stuck in the middle along with a lot of other programs that are universally accepted as being beneficial.”

Lorenz expects action to restore funding could come in the weeks ahead.

Even if it does, Travel Michigan will begin ad buys later than usual and probably lose out on the best rates and prime placements, Lorenz said. The agency also was unable to get creative and marketing elements in place during the fourth quarter, he said.

“We’ve been in just a standstill mode when it comes to the marketing effort,” said Lorenz, who notes that in an election year, there’s greater competition for ad buys from political campaigns.

“(The campaigns) are going to have advanced ability to get those good positions and by the time we get that funding, let’s hope, it will cost more, it will be more difficult to be efficient and effective, but we will be as efficient as possible,” he said. “The last thing I want to do is spend money inefficiently. What we will do is make adjustments (and) we’ll find ways to get out there, and we’ll find ways to get the message out that Michigan is this beautiful place that is deserving of people’s visits.”

An annual analysis pegged the economic impact of tourism in Michigan at $4.18 billion from direct and indirect visitor spending in 2018, the most recent year for which data are available.

Traveler spending directly supported nearly 25,000 jobs that year that paid nearly $650 million in wages, plus another 36,500 jobs indirectly with $1.2 billion in associated incomes, according to a June 2019 analysis by Pennsylvania-based Tourism Economics.

Tourism Economics credits the Pure Michigan campaign with directly influencing 2.1 million trips in 2018 and $2.5 billion in visitor spending on lodging, transportation, food and beverages, retail purchases, and recreation.

Promoters cite that kind of data and a separate analysis conducted by Indianapolis, Ind.-based Strategic Marketing & Research Insights that shows the Pure Michigan campaign generated $9.28 in tax revenue from visitor spending for every $1 in state money spent.

Talking to the world

Cisneros at the Grand Haven Area CVB credits the Pure Michigan campaign with having a “night and day” effect on tourism promotion over the prior “Great Lakes, Great Times” campaign. The promotion represented a “significant shift” that had unified support in the industry to create a brand for the state.

“It was a noticeable difference and it was refreshing that we were able to be a competitor on the state level, and to be able to capture the interests of travelers within the U.S. and beyond with such a strong marketing campaign coming out of Lansing,” Cisneros said.

Doug Small, president and CEO of Experience Grand Rapids, views the campaign as going well beyond tourism. A decade ago, as Michigan’s economy was “at the bottom,” Pure Michigan sent a positive message across the country, Small said.

“I realized at that point that it was not just about visitors. It was Michigan’s message to the world,” Small said. “Pure Michigan is promoting the state as a great place in hopes people will live, work and play here, and want to visit.” 

The campaign has become an economic development tool “and others benefit from it beyond tourism,” he said. To halt funding “is just not a wise business decision, period.”

If the state government were a business, then Pure Michigan is essentially a marketing arm of the state, he said.

“I have never seen a successful business without an aggressive marketing department,” said Small, who’s confident the funding will get restored.

“I can’t believe that mistake will be made twice,” he said.

Despite the industry support and reported return, the ideological question remains about whether state government should spend public money to promote a private industry. The Midland-based Mackinac Center for Public Policy for years has advocated pulling the plug on public support for the Pure Michigan campaign. As well, Senate Majority Leader Mike Shirkey, R-Clarklake, was quoted in news reports last month that he personally favored having the industry support it.

“I believe that those who benefit the most from Pure Michigan should be the ones who primarily fund it,” Shirkey said, according to a Dec. 10 Detroit Free Press report.

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