Michigan’s current state budget impasse could do long-lasting harm to the state’s tourism industry, with industry leaders predicting years of decline if tourism funding is axed. The Pure Michigan brand is among the most successful in the nation and indeed a state commissioned report highlighted how effective its marketing strategy has been.
The Pure Michigan moniker has become part of the local vernacular with a high level of awareness among taxpayers, and has strong bipartisan support. However, that has not stopped Pure Michigan becoming a political bargaining tool, with its immediate future very much in the balance.
The uncertainty derives from Gov. Gretchen Whitmer’s swingeing amendments to a proposed $59.9 billion state budget, removing nearly $1 billion through 147 line item vetoes. Crucially, one of these vetoes is the removal of $37.5 million funding for Pure Michigan. It leaves the future of state tourism marketing on a knife edge, despite Whitmer reiterating her support for Pure Michigan. There is also widespread GOP support but a supplemental bill just introduced by Republican Sen. Jim Stamas in response surprisingly didn’t include the reinstatement of funding for the Pure Michigan campaign, even at a reduced rate.
The Governor said she was forced to make tough choices due to an ‘unbalanced’ budget that misused dollars, but still left the door open for some of the vetoes to be restored. At the heart of the matter is Whitmer’s insistence on extra funds for roads. A fuel tax increase has been proposed to pay for it and GOP members say Whitmer is using tourism marketing funding and other programs as a bargaining chip to achieve it. The Pure Michigan campaign still has another two months before its funding runs out.
“Pure Michigan is facing what is now a familiar challenge: governments that are in difficult budget situations considering cuts even to programs that are respected and effective. What political leaders need to understand is that cutting tourism promotion always hurts economic activity and jobs, and therefore generates a net loss in tax revenues—the evidence proves it over and over again,” said Roger Dow, president and CEO, U.S. Travel Association
“We’re in the process of building awareness on this in Michigan, and we’re hopeful there’s still time to head off this self-destructive decision.”
Michigan Economic Development Corporation spokesperson Otie McKinley told MLive all Pure Michigan partnerships will be suspended unless a last minute deal to restore funds is reached. Time is fast running out.
If it does lose all funding, past history suggests Michigan’s tourism industry could be in for a prolonged period of decline, and even if this is eventually reversed in the future, there is no quick fix.
“It’s so disheartening when the impact of a tourism campaign as successful as Pure Michigan isn’t recognized and protected. Tourism campaigns are proven revenue generators, and that’s why destinations across the US and the world are increasing their investment in tourism promotion, not cutting back,” says Cathy Ritter, director of Colorado Tourism Office.
“Colorado learned that lesson the hard way back in the 1990s, when voters eliminated funding for the state’s $12 million tourism promotion program, ultimately costing the state about $2 billion a year in lost traveler spending.”
She said it took Colorado 21 years to reach the market position it had prior to losing its funding.
This is echoed by Amir Eylon, president & CEO of Longwoods International, a market research consultancy which works with Colorado Tourism.
“It is a very competitive landscape out there. Naturally, Michigan’s competitors will be looking to take advantage of this, and history tells us that a destination that stops its promotion quickly falls out of the minds of the consumer.”
Pure Michigan is effectively in limbo as both sides try to reach a budget consensus. It is finding out, like Colorado, that state funded tourism campaigns are an easy target despite hard evidence showing how the state prospers from tourism. It is after all the third-largest contributor to Michigan’s economy.