Michigan tourism spending is poised to rise an estimated 4 percent this year, creating a second consecutive growth year for the industry, according to a forecast released Monday.
In addition, tourism volume and prices will rise 3 percent, according to Michigan State University’s annual projection at the Pure Michigan Governor’s Conference on Tourism 2011 in Kalamazoo.
The modest, two-year recovery follows three years of downturns. Spending fell 13 percent to $15.1 billion in 2009, the last year for which information is available. Early indicators, however, point to growth last year.
Gasoline prices of $3.50 a gallon or higher are a concern — especially with instability and continued fighting in the Middle East — but the rising costs could boost regional travel for people who don’t want to drive far or fork out for costly airfare, said Dan McCole, an assistant professor of commercial recreation and tourism at Michigan State University.
Michigan has experienced an uneven economic recovery, but “people who have money are starting to spend again,” McCole said.
And consumers feel entitled to recreation time after weathering the economic stresses of the past five years, he added.
“People are prioritizing travel over other purchases,” McCole said. “Vacation has become an expectation.”
Comerica Bank Chief Economist Dana Johnson also forecasts bright skies ahead, saying in an early March report that the state’s tourism will improve modestly during the next several quarters.
Comerica’s tourism activity index has improved in spurts during the past two years after declining from 2004 to 2008. The bank’s tourism index was flat for the last three months of 2010.
“Households and businesses are gradually becoming more willing to increase their discretionary spending as they sense the economy is experiencing a sustained, moderate expansion,” Johnson wrote in the report.
Gov. Rick Snyder increased state funding for Pure Michigan, the state’s tourism advertising campaign, to $25 million this year from $15 million after the Legislature failed to restore more money for it.
The additional money will finance regional promotion campaigns targeting travelers from Midwest cities such as Chicago, Cleveland, Columbus and Indianapolis.
Business travel nationwide is rebounding; statewide hotel occupancy last year increased more than 10 percent.
Other strong signs for the state include a 1.2 percent rise in traffic counts and a 1.8 percent bump in Mackinac Bridge crossings in 2010.
But the rise in tourism spending doesn’t mean a return to the heady days of high spending, McCole said. Michigan was the only state to lose population in the last census, he noted. And consumer confidence — which has reached three-year highs on two indices — remains far from robust by historical standards.
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