By Steve Yencich, President/CEO
Businesses looking to generate new sales would be better off repaving their parking lots instead. That’s the conclusion the Mackinac Center appears to have reached in their blog titled, “State Tourism Spending Ineffective.”
The Mackinac Center has constructed a “statistical model” which they say proves that the State loses 99 cents of every dollar invested in the eight-time, national award-winning Pure Michigan campaign. They say the current $29 million invested in Pure Michigan would be better spent on repairing roads. We disagree.
The Michigan Lodging and Tourism Association rejects the notion that national, regional or local advertising does not work. Clearly it does, and in the case of Pure Michigan, it works very well.
Since the program’s inception in 2006, our industry has seen steady increases in occupancy, tourism outcomes, and employment levels with corresponding increases in tax revenue to the State. Tourism industry employment levels have increased from 142,000 in 2009 to over 214,000.
Certainly, some of these improvements are due to a strengthening economy among other factors. However, to imply that the Pure Michigan campaign has had no impact, and has lost money defies proven results.
The Mackinac Center correctly points out that the House road funding plan redirects Pure Michigan funds to road repair. However it incorrectly implies that the Michigan Economic Development Corp. (MEDC) might continue to fund Pure Michigan as it “reprioritizes” its remaining resources.
The MEDC’s core mission is business and economic development. As would be the case with any other organization, if funding is cut they will apply remaining resources to core objectives. So it’s more accurate to say the House transportation plan eliminates funding for Pure Michigan, because that’s what it does.
We also disagree with the Center’s suggestion that legislators should pull funding from programs that make the state money and redirect it to fixing Michigan roads and bridges. If we’re going to do that, we might as well suggest that legislators pull money out of State investment vehicles and redirect the principal and interest towards road repair.
But the State depends on that investment income for a variety of important programs and economic outcomes. The same can be said for investment in Pure Michigan.
Finally, tourism rises and falls on discretionary spending and is dependent on a vibrant and diversified Michigan economy. We’ve already tested the theory that we could afford to put all our eggs into the auto manufacturing basket and lost nearly one million jobs as a result.
Eliminating funding for Pure Michigan and gutting MEDC resources would do great damage to efforts to grow, and diversify Michigan’s economy.
Logic is often compelling and can align divergent opinions into a single shared perspective. We think advertising works; and a stronger, more diversified economy is always good news for the state’s future.