MSUToday
Published: March 21, 2011

Michigan tourism industry should continue recovery in 2011

Contact(s): Andy Henion Media Communications office: (517) 355-3294 cell: (517) 281-6949 Andy.Henion@cabs.msu.edu, Sarah Nicholls CARRS and Geography nicho210@msu.edu, Dan McCole Commercial Recreation and Tourism cell: (517) 802-7011 mccoleda@msu.edu

KALAMAZOO, Mich. — Michigan’s tourism industry should continue showing signs of moderate recovery this year, according to Michigan State University’s annual forecast.

Tourism spending is expected to increase 4 percent, while tourism volume and prices are both expected to increase 3 percent, said tourism analyst Dan McCole. He presented the forecast today with fellow MSU researcher Sarah Nicholls at the Pure Michigan Governor’s Conference on Tourism in Kalamazoo.

“As predicted, 2010 showed the beginning signs of recovery for the state’s tourism industry,” said McCole, assistant professor of commercial recreation and tourism. “The expectation for the coming year is that last year’s positive momentum will continue at a slightly higher, but still moderate rate.”
 
At the governor’s conference, Nicholls reviewed last year’s economic, transportation and weather conditions and a summary of Michigan tourism activity, while McCole gave his projections for 2011. The projections are based on discussions with a dozen of the state’s industry experts.

Nicholls noted several encouraging trends in 2010, including increases in statewide traffic counts of 1.2 percent and Mackinac Bridge crossings of 1.8 percent. The Blue Water Bridge also saw its first increase in annual crossings since 2000.

Statewide hotel occupancy increased by more than 10 percent, Nicholls said. In addition, consumer confidence rose nearly 18 percent, suggesting households are likely to increase their spending on discretionary items such as leisure travel.

“Given the challenges associated with projecting these tourism indicators over the past few years, and given the turbulent times we have been going through, we were very satisfied with the accuracy of our 2010 projections,” said Nicholls, associate professor. “Though we may not be out of the woods completely just yet, most indications are that the industry held firm in 2010 and, given the continuing funding and success of the Pure Michigan campaign, is poised to experience continued growth over the coming years, barring unanticipated crises.” 
 
McCole warned that the positive outlook for 2011 does not mean a return to high spending and volume the state’s tourism industry experienced before the recession. Volume is essentially defined as the number of people traveling in Michigan on leisure.

“The change to Michigan from the recession was profound. Our state was the only one to lose population in the latest census, and many Michigan residents are still unemployed,” McCole said. “However, the worst is behind us now, and those who do have jobs are feeling increasingly confident in the economic recovery and in their overall financial situations.”

Business travel is another area for optimism. Nationwide, business travel, which experienced a deep decline in volume and spending during the recession, has been rebounding faster than expected. McCole noted that the resurgence of the auto industry has been good for business tourism in southeast Michigan in particular.

“We expect to see a continued recovery in business travel and the beginning of the rebound in meeting and convention business,” McCole said.

High gas prices are a concern, the researchers said. But barring an even more dramatic rise – due, for instance, to the spread of Middle East unrest to a large oil-producing country such as Saudi Arabia – McCole doesn’t think the high gas prices will keep people home in large numbers.

“Certainly some people will travel less because of gas prices, but those canceled plans could be offset by a boost in regional travel as families postpone trips that involve either increasingly expensive airline travel or long driving trips to destinations like the Grand Canyon and Yellowstone,” McCole said.

“More importantly, however, is that vacations are increasingly seen as a right,” he said. “One thing we learned from the recession is that people will prioritize their discretionary spending on experiences with family and friends over merchandise. I think if the weather is good and people realize that Michigan can serve as the setting for the creation of lifelong memories, they’ll pay a little extra at the gas pump to get here.”

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Dan McCole is an assistant professor of commercial recreation and tourism at MSU

Dan McCole is an assistant professor of commercial recreation and tourism at MSU

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