Tourists and Meetings Flock to Michigan

The television is on in the background, but you hear the opening notes of a commercial and you know what’s coming.

The mellow voice of Birmingham’s own Tim Allen extolling the sand, the lighthouses, the snow, the total pleasure of Pure Michigan.

It makes you feel warm and fuzzy about the state you live in – but does it work for the millions of leisure travelers and the corporate and association meeting planners at whom Pure Michigan is also aimed?

The short answer is “yes.”

The inception of Pure Michigan
George Zimmerman is the vice president in charge of Michigan’s tourism efforts. He was there at the beginning of the Pure Michigan campaign.

The Pure Michigan campaign seeks to highlight the state's assets from small towns to large cities. Here, Dow Gardens in Midland gets its moment on camera. Dow Gardens is a botanical garden that cultures plants that will grow in central Michigan in landscape settings.
The Pure Michigan campaign seeks to highlight the state’s assets from small towns to large cities. Here, Dow Gardens in Midland gets its moment on camera. Dow Gardens is a botanical garden that cultures plants that will grow in central Michigan in landscape settings.

“Back in 2006,” he recalls, “we put out an RFP for a new advertising agency. In that, we asked for new ideas to position Michigan. McCann Erickson went above and beyond typical RFP responses and they built this very compelling architecture for what is now ‘Pure Michigan.’

“It went live in 2006 and then, in 2009, it went from being a regional ad campaign to a national one. Tim Allen was the first and the only person, ever asked (to do the voiceover for the ads.) Sometimes ‘great’ works out!” Zimmerman laughs.

Is Pure Michigan working for destinations throughout the state?

“Almost every one of them!” Zimmerman says. “Since the end of the national crisis, the tourism industry has just taken off. Smith Travel Research surveys thousands of hotels every month to track trends and occupancy rates, the rates hotels are getting for rooms – benchmarks over time. We’ve been getting data from them since 2004. And 2013 was by far the best year ever, statewide. By every metric it was the best for a decade, probably longer.

Pure Michigan is a winner across the state, says George Zimmerman, vice president of Travel Michigan.
Pure Michigan is a winner across the state, says George Zimmerman, vice president of Travel Michigan.

“Michigan hotel rates have lagged the country for a long time, and we’re still below the national average, but we’ve certainly closed that gap.”

Zimmerman plans to step down from Pure Michigan on April 28.

Metrics for success
You’ll often hear governors and mayors touting the success of their economic development arms by citing construction spending, tax revenue generated and jobs gained. Those are dollars that are reasonably easy to measure.

The way states and municipalities measure the success of their tourism and convention marketing campaigns is by how successful their hotels are. As Zimmerman alluded to earlier, it’s all about the numbers of hotel rooms occupied and the dollars those rooms generated that indicate how well things are going.

Zimmerman explains, “A national polling firm queries around 25,000 households a month nationally, every month, year around. From that data in 2012, the latest compilation available, visitors spent about $18.1 billion in Michigan. About two-thirds of that is leisure travel. That’s everything from vacations to visiting grandma.”

The remaining third is divided between business travel – visiting clients, going to company meetings, making sales calls – and, a smaller part to be sure, convention travel.

“People might think that business travel is a big driver in Southeast Michigan because of our being an industrial state and the big three,” Zimmerman continues, “but leisure is much bigger than business travel. And the biggest destination for leisure travel is Detroit metro.”

“That two-thirds/one-third ratio varies from area to area. More urban, more business travel. More rural with natural attractions, more leisure.”

Fortunately, he notes, we have both.

Recognition and reinforcement
The trend line for Pure Michigan has been steadily upward since the campaign was launched in 2006.

6pages“That’s what you would expect,” Zimmerman explains, “because we’re reinforcing messages that were already out there. In 2010, a year after we had launched the national campaign, 20 percent of all Americans out there were aware of it. By 2012, that was up to 40 percent.

“By any measure we’re a small budget advertiser to do national advertising – we’re spending about $13 million a year on national advertising. Chrysler’s national ad budget is more than $1 billion. Geico spends in a weekend what we spend all year. So, with a modest national ad budget, to be at 40 percent recognition of the campaign we think is pretty good,” Zimmerman says.

Yet he willingly admits there is plenty more work to be done.

“But the thing I always remind people is: that does mean that 60 percent are still not aware. There is that. But seeing the results we’re getting with only 40 percent national awareness shows me there’s a lot of upside potential out there.”

The ratio of Pure Michigan ad dollars spent to increased tourist and business travel revenue in 2013 resulted in a return on investment of $5.76 for each marketing dollar spent, according to Zimmerman. This is three years ahead of what they had projected in their five-year plan.

While he is justifiably proud of that figure, he explains he doesn’t get carried away with it.

“Oftentimes people mistakenly believe that return on investment data are a test of the effectiveness of your advertising and yes, that’s partially true. A better measurement is what your advertising produced at the time it was in the marketplace,” Zimmerman explains. “If gas prices spiked at $10 a gallon then ROI would go down significantly. It would have nothing to do whether the advertising was better or worse or effectively produced or properly placed – it would just be a whole new drag on people not wanting to travel.”

Would Detroit’s bankruptcy fall into that “$10 a gallon” scenario?

“If that was having a huge impact or a negative drag – which I don’t believe it is – then that would have a negative impact on how effective the advertising could be,” Zimmerman says.

“Most travelers don’t put much stock on what’s going on with municipal governments in someplace they’re going. Think about the mayor of Toronto. As publicized as his antics have been I doubt it’s having an impact on people who want to go to Toronto.”

Return on Investment
Obviously the return on the Pure Michigan investment, which is three years ahead of where it was anticipated in the MEDC strategic plan, is considerably better economically for the state than most other options. That’s why Gov. Rick Snyder has asked that the Pure Michigan budget for the 2015 fiscal year be increased by $2 million.

“We have a total budget of $29 million right now and he’s proposing $31 million,” says Zimmerman.

The $29 million includes a lot more than radio and television advertising, covering the Pure Michigan print ads in travel magazines that the public reads, branding on the border signs and on the tourism signs that point the way to a local farmers market or cider mill in addition to the many other touchpoints that reinforce the Pure Michigan brand.

“Reinforce, reinforce, reinforce!” repeats Zimmerman. “It’s changing the image of Michigan in the minds of the rest of the country.

“If you live in Texas or Iowa or wherever, and your only image of the state for the past 40 years has been news coverage of Detroit and the auto industry, that is not necessarily a great image in many cases. So part of what we’re doing, even though it’s not our primary purpose, is putting a new image out there of a Michigan that many people have probably never thought of,” Zimmerman says.

“Instead of thinking of thousands of acres of forests and lakes and the whole Great Lakes experience, people have an impression of thousands of acres of closed factories. We’re changing that. When our economic development people are at a convention or trade show and people see the Pure Michigan logo they say ‘I love that campaign.’”

So where does it stop?

“I wouldn’t say our goal is world domination,” Zimmerman laughs. On the other hand…

Detroit challenges, opportunities
Larry Alexander, the president and CEO of the Detroit Metro Convention and Visitors Bureau (DMCVB) has a different challenge to face than world domination. He has to overcome some negative opinions of Detroit.

In a survey of meeting planners last Fall by Meetings and Conventions magazine, slightly more than a third of the respondents said they were “less likely” to choose Detroit as a venue for their next project. Of those, more than a third got to the economic heart of the matter, citing a potential rise in taxes that their event might incur.

As far as any potential increase in taxes on convention business is concerned, Alexander says he reminds meeting planners that ask that bankruptcy “has no impact on hotel taxes or liquor taxes that we have in place – and those are very low.” There’s also no chance that the legislature will move to increase them anytime soon.

“You don’t tax our visitors. No way, no, no,” he laughs heartily.

How low is low? While Chicago leads the nation’s major convention venues with an additional per diem tax burden on convention visitors of $40.31, Detroit is sixth from the bottom, adding only $22.37.

MDCVB brings in a number of meeting planners to let them experience the Detroit area first hand as a counter to the bankruptcy specter. Alexander calls them “fam trips” – short for familiarization trips.

“I can honestly say when we get people to town and we have a chance to show them around and let them see what we have to offer, see the quality, the class of the assets that we have – before they get on a plane to go back they say ‘wow!’ That’s a good way for people to leave town. We under-promise and over-deliver and we do that quite well,” Alexander says.

Detroit is creating its own brand
“We went through some trying times in 2008, 2009 but I think we’ve turned the corner,” says Alexander. “Booking is up, travel is up into SE Michigan, tourism is up. I think a lot of that has to do with our marketing efforts. We never really backed down on the marketing that we had to do during those trying years.”

Playing up Detroit’s tourism destinations like the RiverWalk and businesses makes people curious about the city, says Larry Alexander, CEO and President of the Detroit Metro Convention and Visitors Bureau.
Playing up Detroit’s tourism destinations like the RiverWalk and businesses makes people curious about the city, says Larry Alexander, CEO and President of the Detroit Metro Convention and Visitors Bureau.

“We have a great partnership with Pure Michigan,” he continues. “We have two commercials that are running to promote tourism and leisure visitors, but a lot of meeting planners see those as well. We have one commercial for downtown and one for the suburbs – people see those and say, ‘Hmmm, there’s something happening in Detroit.’”

How about that campaign calling Detroit “America’s Great Comeback City?”

“I think that it really plays to the curiosity factor that people have about Detroit. The bankruptcy has grabbed the headlines, we all know that,” Alexander says. “That has raised a lot of questions about the hospitality industry, and that opens a lot of doors for us to go in and tell the other side of the story. The bankruptcy really only affects the legacy costs incurred by the city. The Cobo expansion plans continue. The corporate investment will continue. The public investment in places like the riverfront will not stop. So they say they will give Detroit another look.

“We turned adversity into opportunity.”

How is opportunity paying off?

“From a convention perspective you can see it on a monthly and on an annual basis. We look at the number of what we call major conventions in 2013 and we only had five. This year we’ve got 12. For the next four years we’re ahead of that pace. So when you look at the number of room nights and the economic spending in your destination, that’s an easy one to measure.”

The Detroit Grand Prix puts an international focus on the region.
The Detroit Grand Prix puts an international focus on the region.

On the leisure side, the MDCVB does an economic analysis every two years. It brings in a third party to evaluate visitor spending and the level of visitors so it can go back and track what type of growth it has seen there as well.

The information gathered can include where the visitors started from, how they got here, how long they’re staying, whether they’re here for business or leisure – all of which gets baked into the MDCVB’s forward planning.

“Our brand,” Alexander explains, “is cars, culture, gaming, music and sports. So when people get out of meetings all day, they have options. We have a fabulous bureau of services department that does a great job of helping convention and meeting planners create auxiliary events for their attendees while they’re here.”

And, to help them spend locally.

“A year out, sometime two years out depending on the size of the convention, we will do what we call ‘attendance builders,’” Alexander says. “A team from MDCVB goes to an organization’s meeting or convention to help the organization promote the next event in Detroit by showcasing the many options the area has to offer.”

Alexander talks about the idea that there are a lot of family-friendly things to do in the Metro area – and first on his list is The Henry Ford in Dearborn, which includes Henry Ford Museum and Greenfield Village.

“It’s one of the greatest museums you can find anywhere. Then there’s the zoo with the new exhibits they have coming on year after year. And the museum district with the Charles Wright Museum of African-American History and the Detroit Historical Museum.”

“This destination is hot. The future is all bright!” Alexander.

Agricultural and culinary tourism
What exactly is “agri-tourism” and why is it of growing importance?

Linda Jones of the Michigan Grape and Wine Industry Council, Michigan Department of Agriculture and Rural Development, gets close and personal with some grapes.
Linda Jones of the Michigan Grape and Wine Industry Council, Michigan Department of Agriculture and Rural Development, gets close and personal with some grapes.

“Agricultural tourism represents leisure activities related to agriculture that people will travel more than 50 miles to experience,” says Linda Jones, executive director of the Michigan Grape and Wine Industry Council, Michigan Department of Agriculture and Rural Development.

“Ag-tourism in Michigan is a very important part of overall tourism because Michigan is such a diverse agricultural state,” Jones says.

It’s second in the nation after California – and perhaps soon becoming first, and ag-tourism can be combined naturally with culinary tourism (aka “foodie tourism”).

“When you take fish from the Great Lakes, and morel mushrooms, and maple syrup, and venison we have a variety of culinary assets in our state,” Jones ticks off as examples.

You also have the ingredients for a pretty challenging recipe.

Michigan growers raise more than 300 different commodity crops and lead the nation in everything from impatiens and other flowers to blueberries to potatoes that end up as chips (see Corp! story in the November December 2013 issue). More than a million people are employed in the state to accomplish this and together they add more than $90 billion to our economy.

So there’s lots to see when you get off the interstate and a large number of establishments that will prepare all that stuff for you to eat and drink.

Jones’ full-time job is working with Michigan’s wine industry. The wine industry, she points out, is part of both of the ag- and culinary-tourism spheres.

Michigan ag crops higher resAnd, it’s, well… growing. There were “19 wineries in 1997 and 105 today as Michigan increases its reputation for wine, and all but a couple are equipped for ag- and foodie-tourists. We’re in the top 10 states in the country for quality and quantity of wine produced,” Jones says.

While ag-tourism is not easily quantifiable, the USDA took a stab at it when it asked Michigan fruit growers if they had a farm stand, a U-Pick operation or a tasting room of some sort. Their results, according to Jones, were inconclusive.

Brewing bolsters economy
Michigan’s craft beer industry keeps growing and gaining more national attention. Grand Rapids was named Beer City again. HopCat beer pubs are planning on opening 10 to 15 new establishments in a variety of locations in the next couple of years. Detroit’s Atwater Brewing and others are expanding production.

People are starting to take notice that beer is becoming a cash crop. A package of bills is going through the Michigan Senate hopper that are designed to expand the ability of local brewpubs to add additional outlets and tasting rooms – in short, to add additional culinary-tourism sites.

Currently, says Jones, an estimated two million tourists visit Michigan wineries, so having additional beer drinkers would be a definite plus to the state’s economy.

“We know now that there are people coming to Grand Rapids, with five of their buddies – usually male – and hitting all 15 of the micro-breweries – in cabs, we hope – for the weekend. We’re hearing that from the hoteliers, who are starting to arrange packages and shuttle vans. Traverse City has something similar now.”

Even though Jones is in a sister department, the MEDC’s Pure Michigan campaign has been beneficial for her tourism sector as well.

“They did a Pure Michigan commercial that ran on the Food Network. It was called ‘Fresh’ and it was very effective for us,” she says. It ends with Allen purring “… life just plain tastes better when it’s Pure Michigan.” Yum.

On the west side of the state
Janet Korn is the vice-president marketing for Experience Grand Rapids, the city’s tourism arm. She says that her area doesn’t really compete with SE Michigan.

“Meeting in Grand Rapids is a different-size experience, it’s a different kind of experience. We usually find success when people in our community are part of an organization and then bring its next meeting to be held here,” Korn said. “There aren’t that many cities the size of Grand Rapids with the kind of art and culture and craft beer and the local food scene that we have going on here.”

Combined with the sandy beaches and blue water of Lake Michigan just a few minutes away Korn says.

“That’s probably why the editors at Lonely Planet picked us as the number one destination to check out in 2014. Not only are we a good spot for meetings and conventions but we’re a vacation destination also. That’s how we package to a lot of associations that tend to travel with their families,” Korn adds.

The Experience GR folks are certainly successful, producing a nearly 10 percent gain in hotel revenue for 2013 over 2012. It was their third such gain in the past three years.

“The health of our business community, the momentum of things to do and wanting to come here is driving our corporate business travel and it’s also driving our leisure travel,” Korn says.

“Sometimes the things that make a place, a place, can catch the attention of meeting planners, but it can also grab leisure travelers – and business owners and investors to invest more into this community.”

“Between Grand Rapids and the lakeshore is a huge agricultural area,” Korn continues. “This is where we’re growing Michigan’s apples, peaches, plums, blueberries – and the new Downtown Market really helps us tell the agricultural story from a starting point,” for tourists who want to know more about where their food comes from. “There are kids who need to know that corn grows on a plant and doesn’t just come in a plastic bag in the frozen food section of the grocery store.”

“When you go into each of the different craft breweries they all feel different from each other, and you meet different characters there. To me that’s the fun part. You get an immersion into the culture of the brewery.”

And then there’s cultural tourism.
Jennifer Goulet is president and CEO of ArtServe Michigan, the statewide organization that acts on behalf of most of the state’s nonprofit arts and cultural organizations.

“The arts are a tremendous contributor to cultural tourism,” Goulet says. “Our recently released Creative State Michigan report has affirmed once again the power of arts and cultural destinations, contributing more than $2 billion toward total state tourism revenues – that’s 16 percent.

That’s powerful in and of itself. Putting it in context: arts and culture account for more tourism dollars statewide than golf, boating and sailing, hunting, fishing, hiking and biking combined. That’s pretty colorful,” she adds.

“There are many things that make Michigan a powerful destination for both out-of-state and in-state tourists. Now, knowing the financial impact that arts and culture have on our tourism industry statewide, we have a great opportunity to partner with Pure Michigan to increase our messaging opportunities and get the word out.”

Goulet turns into a numbers maven.

“With the ability to share hard data on the economic and social impact of the arts and cultural organizations statewide, the governor and the Legislature have taken a very low and steady budget that was $2.5 million two years ago and have grown that investment to a total of $8.15 million for fiscal 2014,” she says.

“We believe it is largely as a result of the ability for them to be able to truly understand the impact and the return that that investment brings, particularly at the local level. It is important to begin a process to invest in those critical resources that are a part of reinvention for the future.”

The value of ArtPrize
One of the most acclaimed additions to the state’s cultural attractions is the 5-year-old Grand Rapids-area fall event, ArtPrize. In a study conducted by the Anderson Economic Group, last year: the event attracted nearly 400,000 attendees, nearly a 20 percent increase over 2011 (when a previous survey was done); the economic impact in the area was $22.2 million which included some 250 jobs; somewhat unexpectedly, The Rapid, the bus system in Grand Rapids, experienced a 58 percent increase in ridership over 2012.

From a longer-term-benefit standpoint, more than half of attendees indicated that they were shopping locally (and discovering new places to shop in the future), going to farmers’ markets and taking advantage of the many outdoor recreation activities the area has to offer.

“One of the key factors in the success of ArtPrize,” explains Goulet, “is the degree to which it and its organization have engaged the community and other stakeholder groups. You have the art community and the artists who are at the core that make it such an amazing creative explosion and experience. But when you add in the local business community, the city and the county, Experience Grand Rapids and their promotional efforts, and the schools – it has really grown very quickly into an event that is not just one organization making it happen. Everybody sees the artistic impact, the economic and social impact and the impact on the individual.”

Goulet says there’s an added bonus with cultural tourists in general, “They are really great to attract because statistically they tend to stay longer, spend more, travel with larger groups – and they tend to return.”

Sarah Triplett, ArtServe’s director of public policy chimes in: “When we talk about attendance for arts and cultural programs, we talk about how people come back – 22.1 million attended an arts or cultural program last year – that’s more than double the population of Michigan so we have repeat customers for sure.”

Or, as you might hear the persuasive baritone of Tim Allen say, “They come back … to Pure Michigan.”