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TICOM UPDATE
What Legislators Don’t Know About Tourism Can Hurt Us
By Steve Yencich, CAE, President of the Tourism Industry Coalition of Michigan and President/CEO of the Michigan Hotel, Motel & Resort Association
 It’s surprising how much people outside of tourism don’t know about this state’s second largest industry. I should know; I was one of them just over two years ago. But now, like those of you who have spent your careers in the travel & tourism industry, I understand the following facts about our business.
- Our business outcomes are entirely dependent on discretionary spending. Our profit margins, or lack thereof, rise and fall on discretionary spending patterns of both tourists and business travelers. To make things even more interesting, individuals’ assessments of their financial well-being and their decision to spend discretionary monies are based on subjective, as much as objective factors. It’s a sad economic fact of life, but people just don’t spend money they don’t feel or think they have.
- Discretionary spending is to a large measure impacted by events and conditions outside of our control. As we enter the fourth year of a bear market, and approach a third year of a recession, we understand all too well how dependent tourism is on overall economic conditions. Yet as we continue to struggle to shake the malaise created by the sad events of 9/11, fears of a pending war with Iraq and a return of possible terrorist activities, we also understand how much world events can impact our businesses and our industry.
- Most people don’t understand how much weather affects our industry. In fact, tourism is much more sensitive to weather patterns than is agriculture. For example, tell a farmer that you guarantee him two days of rain per week, and he’ll jump for joy. Say the same thing to a hotelier in Traverse City or an entertainment park manager in Muskegon and mention, “Oh, by the way, it’s going to come on the weekend,” and they’ll burst into tears every time.
- And weather is a year round threat. Anyone who works for a snowmobile or ski resort remembers how warm last winter was. Golf course owners and resort operators can tell you how cold temperatures in May caused their profits to shank into the rough. And now this winter has been as dry as it’s been cold, with many trails unsuitable for use due to lack of snow. I used to think that farmers were the biggest gamblers of all time. At least they have federal loan guarantees, but travel and tourism business owners take the same risks without any such safety nets.
Those of us in this industry understand all these things that our average customer does not. But what about the average State Representative, Senator, or our state’s new Governor? Are they aware of the above facts? Probably not. Are they aware of the important contributions Travel & Tourism makes to Michigan’s economy? Are they aware of the fact that tourism contributes in excess of two billion dollars in state and local tax receipts each year? Are they doing the kinds of things necessary to promote the health and vitality of Michigan’s second largest industry?
These are some of the reasons the Tourism Industry Coalition of Michigan, (TICOM), was formed. Given the diverse composition of our industry, it is important that we speak, whenever possible, with a common voice.
Thanks to the efforts of fellow TICOM members: Bill Sheffer, Director of the Michigan Association of Recreational Vehicles & Campgrounds; Bill Lobenheiz, Vice President of the Michigan Soft Drink Bottlers Association, Chris Lawrence, Public Affairs Director for the Association of RV Parks & Campgrounds and Linda Singer, President of the West Michigan Tourist Association, TICOM is beginning to do just that.
TICOM recently mailed a letter to all Michigan legislators. The letter, which outlines some basic facts about Michigan tourism, represents the first, small step in the direction of our industry speaking with a more unified voice.
Working with fellow TICOM member Barry Cargill of the Small Business Association of Michigan, TICOM’s Executive Committee will begin meeting with key legislative leaders to continue this important educational process. In coming months, TICOM will invite legislators and representatives of Governor Granholm’s administration to attend portions of our quarterly meetings.
These are but small steps for our industry. However, in the past 12 years, the amount of money Michigan appropriates in support of tourism promotion has dwindled from $13 million in 1990, to just over $12 million in 2002. But time, inflation, and the efforts of other states march on. As a result, Michigan’s tourism budget rank has dropped from 7th largest nationwide in 1990, to just 23rd largest in 2002. So, while they may be small steps, it’s clear they are well overdue.
We encourage you to support your association’s efforts on behalf of TICOM. Good things can only happen when we work together in support of our industry.
Steve Yencich, CAE
TICOM President & President/CEO, Michigan Hotel, Motel & Resort Association
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