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Tourism Enhances Michigan’s Economic Climate
By Philip J. Alexander, District Extension Agent, Michigan State University Extension
(Reprinted with permission from the June 2003 issue of Michigan Planner, a publication of the Michigan Society of Planning.)
Tourism is like Rodney Dangerfield—it doesn’t get any respect. This may be caused by a lack of awareness, understanding, or credible information. This article address these three concerns by drawing on the tourism research and studies conducted by extension tourism specialists from Michigan, Minnesota, and Wisconsin. Since 1946, Michigan State University has been a national leader in tourism research and educational programming. Extension educators work with entrepreneurs and community leaders across our state to help them make informed decisions.
Let’s begin by defining tourism. Although there isn’t a universally accepted definition of tourism, typically tourism is defined as people traveling 50 miles or more from their home for recreation, entertainment, or an enjoyable experience. Examples include activities such as attending a festival, bird watching, camping, canoeing, going to a casino, snowmobiling, or visiting a museum. These attractions are scattered throughout the state and appeal to a wide range of interests. Visiting friends and relatives accounts for one third of Michigan’s tourism.
Studies show that more than 60 percent of Michigan-destined trips originate in Michigan, and over 25 percent originate in adjacent states and Ontario. It is estimated that 95 percent of these trips are made using automobiles. Tourism in Michigan varies by season with nearly 45 percent of travel occurring in summer, 25 percent in the fall, and 15 percent each in winter and in spring.
Tourism is Michigan’s second largest industry. For many counties – especially in the Upper Peninsula and the northern part of the Lower Peninsula – it is the largest industry. According to the Travel Industry Association of America’s most recent report, Impact of Travel on State Economies, direct spending by domestic travelers in Michigan was $12 billion plus an additional $765 million by international visitors. This spending produced 173,000 jobs and over $2 billion in tax revenue.
Research examining tourism in various Midwestern communities conducted by Wisconsin Extension reported that developing the local tourism industry makes sense for many small communities that are experiencing drastic economic changes. With proper planning, tourism can be a part of the solution to the economic problems of small communities. Consider the following benefits of targeting the visitor market:
- By bringing in outside dollars, a community can benefit from a larger and more diverse mix of retail. Residents of small cities and villages can enjoy shopping conveniences and selection such as those offered in larger, more distant places.
- Tourists bring in dollars from outside the community. Outside revenue stimulates the local economy and those dollars are often recirculated within the community in the form of wages, purchases of goods, supplies and services, construction contracts, etc.
- Tourism can provide new entrepreneurial opportunities for community residents. Tourism is an “export” industry in that it sells goods and services to consumers who reside outside of the area.
- For many rural communities, tourism brings customers with comparatively high disposable incomes. These visitors are more likely to buy retail goods that can yield high profits.
- As an export, tourism brings in outside monies that increase tax revenues. Although some of the revenues will be needed to maintain the community infrastructure utilized by the visitor, residents will benefit from capital improvements as well as any surpluses.
- In general, tourism enhances the infrastructure, viability, and visibility of the community, increasing its attractiveness as a place to visit, work, or call home. (Ryan, 1999)
The concept that tourism is an export may sound strange at first. Perhaps that is because we typically think of exports as product being produced in a factory or on a farm and shipped to the consumer. In the case of tourism, the difference is that the customer must come to the product. This is another reminder that tourism fits neither the manufacturing nor agriculture paradigm of economic development.
The distribution of the tourist dollar is called the multiplier effect. The money filters through the local economy and much of it remains in the community. This income can be thought of as fresh money because it was brought in from outside sources. Even if you are not in direct contact with tourists, your customers who earn their living from the tourist trade are filtering their money to you. (Alexander, 1986)
However, tourism is more than economic development (jobs and income). It impacts and is impacted by social/cultural, environmental, and political factors that are intertwined in a variety of ways. Understanding that tourism development may result in many and complex impacts suggests that local elected officials, the tourism industry, and community residents should work cooperatively and carefully to plan for its future growth and development. (Kreag, 2001)
In addition to the benefits, there are potential drawbacks that tourism can have on a community. Included are added traffic congestion, seasonal employment, inflated real estate prices which can make affordable housing difficult for local residents, noise, destruction of natural resources due to overuse or over development, and increased demand (and expense) of public services such as roads and police protection that are paid for by local residents. With a better understanding and appreciation of tourism, communities can evaluate the costs and benefits of tourism development and determine the appropriate fit that makes sense and enhances the quality of life for both the residents and visitors.
Planning is not enough. Active implementation and management of plans and prompt attention to emerging tourism issues will maximize positive and minimize negative impacts. (Kreag, 2001)
Implication for Planners: get the facts. Don’t assume tourism is only burger flipping jobs and a drain on government services. Likewise, tourism isn’t the silver bullet that will solve all of the community’s economic problems. Tourism may or may not be right for your community. Assess your situation and determine how you can capitalize on tourism’s positive impacts and minimize its drawbacks.
Here are some specific action steps to consider:
· Since the predominate mode of transportation is personal vehicles, added consideration must be given to roads, traffic flow, directional signage, and parking needs.
· Inventory what your community currently has to offer the visitors. Include both natural and man-made attractions, lodging accommodations, retail shopping, entertainment, restaurants, and other travel related services. Compare your assets with other similar communities as well as with what visitors want and need.
· Talk with local tourism leaders at your chamber of commerce, convention and visitors bureau (CVB), major attractions, etc. to learn about current tourism trends, issues, and future opportunities.
· Find out what local residents think about tourism in their community. Ask them what types of tourism should be developed and promoted, how much tourism is desired, and the best time of year to encourage it. Use this input to help determine the proper balance of tourism development.
· Actively include tourism interests in your community’s comprehensive plan. Keep in mind that tourism does not fit neatly into any existing boxes. It is scattered throughout several zoning classifications such as residential, commercial, agriculture, and forest/recreation. In some counties, second homes contribute significantly to the tourist/resort industry. The state and federal government are also major land owners and service providers directly related to tourism.
A clear statement of the community’s vision of tourism should be an integral part of a community’s comprehensive plan. Active planning directs tourism toward the goals of the community. (Kreag, 2001) Tourism requires planning, and community planning must include tourism in order to help shape the preferred future for the current.
Sources:
Alexander, Phil. Tourism and its Significance in Local Development, Michigan State University Extension, Bulletin No. E-1937, 1986.
Kreag, Glenn. The Impacts of Tourism, University of Minnesota, Publication No. T 13, 2001.
Ryan, Bill et. al. Tourism and Retail Development: Attracting Tourists to Local Businesses, University of Wisconsin Extension, Publication No. G3713, 1999.
For Additional Information, take a look at these resources found on the MSU Tourism Area of Expertise web site: http://www.tourism.msu.edu1) Tourism Educational Materials: A searchable database of over 100 on-line research reports and other publications
2) Tourism Profiles for every county in Michigan
3) Michigan Tourism Impact Model
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