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Michigan Forecast: Tourism Spending Up 4% in 2011

May 26, 2011 by   - () Leave a Comment

Mackinac Bridge

Most southern Michigan state park campgrounds are booked to near capacity this weekend and, surprise, they might be pretty full throughout the summer, the Grand Rapids Press reported.

Year-to-date campsite reservations are up 14.5% from 2010, according to the Michigan Department of Natural Resources.

That’s one of several indicators that suggest state tourism could be in for a hot summer.

“I was pleasantly surprised because I thought with the general economy in Michigan, and gas prices taking that leap they did, that would be a depressing factor,” said Harold Herta, chief of resource management in the DNR’s parks and recreation division.

“Maybe it’s more people are sticking closer to home and they’re not going to Disney World. Maybe people have adjusted to life in Michigan and hunkered down.”

A Michigan State University study projects a 4% increase in tourism spending this year, fueled largely by a return of wealthier travelers to higher-end destinations. But rising campground bookings suggest an increase across the tourism market, said Dan McCole, who authored the report with Sarah Nicholls.

Tourism spending was up 3.4% last year after a 13.6% decline in 2009.

Though the study released in early spring was based on a peak summer gas price of $3.70 per gallon, McCole said the current price flirting with $4 a gallon likely will have little impact on most travelers. A road trip in a typical car from Grand Rapids to the Mackinac Bridge and back, for example, would cost an extra $32 in gas compared to last summer’s price at the pump.

Michigan’s summer tourism forecast

  • State campgrounds. Annual entrance fee is $10, down from $24, “Right off the bat, any camping trip is going to be $14 cheaper the first time,” said Harold Herta, Michigan Department of Natural Resources official.
  • Higher-end destinations. “It’s primarily the haves that we’re expecting to spend again. That would mean the sectors expected to do well will be on the higher end,” said Dan McCole, Michigan State University professor
  • Hotels. “The first four months of this year have been good (for Kent County). We’re leading the state of Michigan as far as room revenue growth year to date,” said Janet Korn, vice president of marketing for Experience Grand Rapids.

The losers:

  • Remote destinations. “Obviously there’s some kind of tipping point (with higher gas prices). Areas that are further away from major population areas, they’re going to be affected more,” McCole said.
  • Hotel customers. “Hotel price is truly a function of demand. As demand increases there’s some upward movement in price. One could almost argue they were under-priced before,” Korn said.

The wildcards

  • Gas prices. “We don’t expect high gas prices to have too much of an effect, but what is high gas prices? There’s some (unknown) tipping point where a lot of people will travel differently,” McCole said.
  • Weather. “It looks like it may be cooler than last year but not as cold as it was the year before. Highs probably around 80 most of the time. Lows in the 50s and precipitation is normal,” said Bob Suttle, National Weather Service meteorologist.

“Vacation has become a right,” said McCole, a professor in MSU’s Department of Community, Agriculture, Recreation and Resource Studies. “Because vacation is still important to people, they’re likely to say ‘Hey, you know what, we’ll make cuts in other parts of our lives. The extra $30 (in gas), we’ll suck it up because we really want to have this vacation.’”

More than 1.1 million Michigan residents will travel this weekend, based on responses to a AAA Michigan survey, and more than 90% will drive. Six out of 10 respondents said gas prices will not affect their plans, while 70% of the rest said they would cut spending in other areas. Some travelers plan to take a shorter trip.

Gun Lake Rentals in Barry County bought two more boats and raised some prices in anticipation of high demand this summer. About 75% of his fleet is reserved for this weekend, owner Alex Cazala said.

“We’ve seen a change from people coming from out of town and doing weekly rentals to a lot of local people coming out for the day from Grand Rapids and Kalamazoo,” he said. “Basically, people are staying local so we’re still busy.

“We expect to see good business as long as we get a nice warm summer.”

The summer forecast calls for temperatures cooler than last year’s 82.6-degree average high, but not as cold as the typical 77.6-degree high in 2009, with normal precipitation, said Bob Suttle, a meteorologist with the National Weather Service in Grand Rapids.

Good weather proved helpful in attracting an estimated 400,000-plus people to this month’s Tulip Time, said Gwen Auwerda, executive director. Hotel stays were up 33% from last year, she said.

“We feel that attendance was up,” Auwerda said. “It didn’t appear that anybody had a struggle getting here. We a had a lot of people from what we call the ‘one tank away’ as well as people from all over the country (and beyond).”

Reservations at Boyne in northern Michigan are “on par” with past years, with no change in the average 2.5-day length of stay, spokeswoman Erin Ernst said. A longer booking window in the winter has shortened this spring, perhaps due to rising gas prices, she said.

McCole said tourist destinations farther from big cities could see less traffic if gas prices push higher.

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