I have accumulated several possible themes for this editorial, but with the publication date for this issue looming, choosing which one on my list to feature here has left me staring at a blank piece of paper for far too long.  So, to overcome my writer’s block, I’ve decided to cover multiple topics in this column. 

1.  Michigan Tourism Outlook Conference Presentations:

Earlier this month, the Tourism Resource Center hosted the 19^th annual Michigan Tourism Outlook Conference.  Attendance was near a record level, and we have received a lot of positive feedback about the program from participants.  PDF versions of the conference presentations are downloadable at the Center’s website, www.tourismcenter.msu.edu. 

2.  The Center’s Outlook for Michigan Tourism in 2004:

After two down years, Michigan’s tourism industry appears to have curbed its downward slide in 2003, although year-to-year growth was only an anemic one percent.  Healthier growth is projected for 2004, with travel volume increasing at a 3-4% rate and travel spending increasing in the 4-5% range.  These growth projections are in line with the averages the industry has experienced over the last twenty years.  While travel volume has continued to inch forward over the past three years, large declines in travelers’ spending have cut into industry profits.  Even if travelers’ spending rebounds, as projected, total spending will lag behind the level reached in 2000, before the economy entered into recession. 

3.  Gasoline Prices and Michigan Tourism:

The topic of gasoline prices is once again a regular news feature and will probably make headlines off and on as the year unfolds.  Crude oil prices are at record levels, may go higher, and almost certainly will not fall dramatically this year.  The gasoline production and distribution system in the U.S. needs to operate at peak efficiency to meet demand, and even minor disruptions result in significant spikes in gasoline prices. 

In this environment, we can expect gasoline prices to remain relatively high all year with periodic price spikes that will attract media attention.  Based upon my observations and earlier research, I have concluded that the amount and tone of media coverage of gasoline prices are more damaging to tourism in Michigan than are moderately high prices for gasoline or even sudden price increases.  Thus, it is important this year to be prepared to counter negative media coverage surrounding the influence of volatile gasoline prices on tourism. 

Consumers and the media should be reminded first, that even a large gasoline price increase will result in a relatively small increase in the total cost of the typical Michigan trip, and, secondly, that when inflation is factored in, gasoline is relatively inexpensive even given higher current nominal prices.  I would also encourage readers to be prepared with a “share your gas pain” marketing strategy should gasoline prices become a persistent media theme.  Such a strategy, if well conceived, has the potential to exploit negative news for your competitive advantage. 

4.  Return on Investment to the State Treasury as a Result of Tourism Advertising by Travel Michigan:

With demand for travel rebounding, the market is likely to be more responsive to promotion than it has over the last couple of years.  Recent research conducted by two independent consulting firms, Certec Inc. headquartered in Kentucky, and Longwoods International from Toronto, indicates that $2.28 is returned to the state treasury for every $1.00 that Travel Michigan invests in advertising.  In addition, approximately $20.00 in sales to Michigan tourism businesses is generated for every dollar that Travel Michigan invests in advertising. 

These rates of returns on tourism advertising are not fixed.  They will vary with the level of investment, how well the money is invested, and how receptive the target markets are when the money is invested.  Given that demand for travel is projected to be stronger this year, it is reasonable to assume that the previously noted rates of return on Travel Michigan’s advertising could actually increase in 2004, so long as that agency continues to invest its advertising budget as effectively as it has in recent years.  It would appear that an increase in Travel Michigan’s promotion budget would have a net positive impact on the state’s fiscal circumstances this year.  Of course, projected stronger demand also should improve the return on investment in advertising made by individual tourism businesses and destination marketing organizations. 

5.  Canadian Tourists as a Target Market:

If the time is right, as I think it is, to boost investment in travel advertising, what then are promising markets to target?  In my monitoring of the national scene, I’ve noted frequent discussions of marketing initiatives directed at international markets.  The terrorism attacks on 09/11/01, followed by the war in Iraq, have had a major negative impact on international travel to the U.S.  Since international visitors spend considerably more time and money than do domestic travelers, they are especially attractive travel marketing targets. 

With the exception of Canada, Michigan isn’t among the most popular U.S. destinations for international travelers.  Until recently, the relative weakness of the Canadian currency versus the U.S. dollar made selling Michigan as a travel destination to Canadians problematic; as a result, Canada has slipped off the radar screen of most Michigan destination marketing organizations.  The resurgence of the Canadian currency suggests it is time to put Canada back on our lists of possible target markets for Michigan destination advertising.  It is also important to work with the U.S. Homeland Security Agency to make entry by Canadians to the U.S. as “hassle free” as security considerations allow.  It is counter-productive to invite Canadians to visit our state in our advertising and then treat those who accept our invitation to visit as unwelcome intruders at border crossings.

Feel free to send your thoughts about these issues to dholecek@msu.edu.