The Economist, a British-edited publication generally regarded as among the world’s best news magazines, ran a piece on Michigan several weeks ago under the headline, “The Dark Ages.”
It was largely what you might expect — but with one silver lining. After reciting the all-too-familiar facts of Michigan’s many woes, the article went on to praise the Pure Michigan advertising effort as one of the state’s few good things.
“A lovely tourism campaign has advertised Michigan’s beaches and forests, a bright antidote to relentless gloomy news stories.”
They were on the mark. The campaign, funded last year at $40 million, proved hugely effective. Market research conducted by Travel Michigan, the state’s tourism agency, indicated that the 2009 campaign – the first national TV campaign the state has ever executed – brought in 1.2 million tourists who would not have visited the state if they hadn’t seen the Pure Michigan ads.
Other research conducted by Longwoods International for the tourism office found the Pure Michigan ads returned to the state nearly three bucks in increased sales tax revenue for every dollar invested in the ads. Travel Michigan boss George Zimmerman says these tourists spent an increase of $250 million in the state in 2009. (Full disclosure: I’m the unpaid vice-chairman of the Michigan Economic Development Corporation, which houses Michigan Travel.)
Anecdotal evidence of the campaign’s success abounds. Daniel Musser III, President of Mackinac Island’s Grand Hotel, told a Senate Finance Committee hearing that half the customers who booked the top packages last year were from out of state.
So while the automotive sector declined, hopes and badly needed profits surged in Michigan’s tourist business, which vies with agriculture for standing as our number two industry.
Sensibly, this was followed last month by the Michigan House of Representatives last month approving — nearly unanimously — $33 million in Pure Michigan funding for this year, coupling that with a promise of long-term sustained support.
The bill was then passed on to the Senate Finance Committee, chaired by Sen. Nancy Cassis (R-Novi), who promptly embarked on a muddled discussion about the methodology that lay behind the 3:1 return on investment research report. She charged Travel Michigan with failing to provide her with the details. “None of this can be verified,” Cassis told me when we talked last week.
When I asked Travel Michigan head George Zimmerman about this, he responded that the full research report for 2009 had not been completed, but that the return on investment part was complete and had been transmitted to Senator Cassis. He also said that there were no pending requests for information from the Senate committee.
So tourism supporters were saddened when the Senate last week approved only $9.5 million in extra funding to keep the Pure Michigan campaign from going dark this year.
Added to the $5.5 million previously appropriated, this limits Pure Michigan spending for this year to around $15 million, hardly enough to put on a full national ad campaign. “The loss of momentum for Michigan travel is tragic,” Zimmerman said.
But it looks as though that’s it, at least for this year. State Representative Dan Scripps (D-Northport), one of Lansing’s bright lights, told me the House is likely to go along with the $9.6 million measure as the best that can be done for now.
EDITOR’S NOTE: On March 9, the House actually stuck to its guns and substituted Scripps’ bill for the Senate bill led by Cassis. Scripps bill is a long-term solution which would pay for future tourism marketing with growth in tourism related sales taxes and a fee on car rentals near Michigan airports. The standoff is now headed to a House-Senate conference committee and, if it isn’t worked out soon, the delay will threaten the success of the summer tourism marketing campaign.
Sen. Gretchen Whitmer (D-East Lansing) commented at a Finance Committee hearing that “reasonable people choose amputation over death, so I’ll vote for amputation.”
How sad. How shortsighted. And how silly.
As any business person knows, the key to running a successful company is to identify its key, durable, distinctive competitive assets. This done, you have to mount a sustainable long-term program of investing in them. This is first-year business school stuff.
We all know that one of Michigan’s key competitive assets is the beauty and wonder of our natural resources that make our state a great tourist destination. And we all know that the Pure Michigan campaign is successful and cost-effective.
So what happens? Thanks to Sen. Cassis, our legislators decide to cut investment in promoting one of Michigan’s world-class competitive assets. Does this make sense? No.
Is it a missed opportunity? Absolutely.
But sadly, in this case, as in so many others, Michigan seems to rarely miss an opportunity to miss an opportunity.
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Editor’s Note: Former newspaper publisher and University of Michigan Regent Phil Power is a longtime observer of Michigan politics and economics and a former chairman of the Michigan chapter of the Nature Conservancy. He is also the founder and president of The Center for Michigan, a bipartisan centrist think-and-do tank which is sponsoring Michigan’s Defining Moment, a public engagement outreach campaign for citizens. The opinions expressed here are Power’s own and do not represent the official views of The Center. He welcomes your comments at ppower@thecenterformichigan.net
6 Comments
Your reference to “first year business school stuff” is similar to a comment I posted about a month ago and that this is “accounting 101″.
If I, as a business owner, could lay out (even if I borrow the money) $1 at the beginning of the year and before the year is over I could get close to $3 back to repay the $1 I may have borrowed, I would be standing in line at the bank to borrow more money to get such fantastic results.
When most Michigan businesses are trying just to break even or keep the doors open it is mind numbing to me to see the thought process displayed by our representatives in Lansing such as Cassis and Whitmer. Don’t they understand the concnept of ROI?
Bob
You obviously believe the return on investment numbers being tossed about. I personally have reservations regarding the claims. Anyone who has ever commissioned a study knows you can influence the outcome by when you set up the criteria Do they take into consider the economy, which is forcing people to drive and stay closer to home ? Probably not.
I often wonder why we don’t also mention, in Michigan’s favor, that, besides beauty, lakes, beaches, bike trails etc., we are 600′ above sea level, (take that all you coastal folks), don’t have huricanes, maybe and occasional little easthquake and once in awhile a tornado. And,we have four distinct and beautiful seasons. What other state can make all these claims? None that I can think of.
This is exactly why we need to vote this group of embarrassments out of office and start over. The current batch of nincompoops is why term-limits may be a good thing. These people cannot get past their own short sighted positions to compromise with the other side for the benefit of Michigan. They are so polarized, by choice, that Michigan is guaranteed to fail. And we in Michigan will fail along side of them because we cannot get out of our TV chairs to get involved in letting Lansing know what we want. I agree, how sad.
Frankly I don’t understand the negativism associated with this topic?
Even if you believe the numbers were exaggerated, say it was $2 for every dollar spent, the results are still very impressive and it supports one of Michigan’s largest industries. Tourism is an industry that brings hard dollars into the hands of small business owners.
Why is it wrong to support the state, emphasize a positive and make a few bucks for our hard pressed citizens?
I know these ads work by the questions that I’m asked and the distance that people have come to ask them. They want to know the best places to take in the “cool pure waters” and where can they find the wine trail maps. These are not just Michiganders staying in state, they are from California, Arizona, Europe, Asia, South America… they are from everywhere.