Published in Small Business
Hikers in Pictured Rocks National Lakeshore in the Upper Peninsula. Hikers in Pictured Rocks National Lakeshore in the Upper Peninsula. PHOTO COURTESY OF PURE MICHIGAN

With limited funding restored, Pure Michigan shifts focus to fall and winter tourism

BY Sunday, October 11, 2020 05:40pm

The Pure Michigan campaign that touts the state as a travel destination should return soon to spur fall and winter travel and help tourism-reliant small businesses that were hit hard this summer by the COVID-19 pandemic.

As Michigan’s tourism industry continues to reel from the pandemic, and with the restoration of limited funding, Travel Michigan Vice President Dave Lorenz sees an urgency to ramp the Pure Michigan campaign back up this fall — in some form — to support the tourism industry that’s populated by many small businesses.

When working with limited funding, Travel Michigan would typically put its resources into the “big season” and promote the state as a summer vacation destination. The agency has to change that strategy with the COVID-19 pandemic.

“We don’t have that luxury this year. We need to do all that we can to help those businesses survive and those jobs continue to be there,” Lorenz said, adding that there will be “some activity” in the fall and winter to encourage safe travel. “If we don’t do that, it will be much more likely that we’re going to lose more of those small businesses that were able to survive this summer with limited activity because of the COVID restrictions.”

Fall, winter focus

The 2020-21 fiscal year state budget that was agreed upon by lawmakers and Gov. Gretchen Whitmer and started Oct. 1 restored $15 million for Pure Michigan. That’s still well below funding levels for the campaign in prior years, which reached $35 million at its peak.

For the fall and the coming winter, Travel Michigan will look to use social media, partnerships with news media and “non-traditional ways” to promote the state for snowmobiling, skiing and other cold-weather activities, Lorenz said. That’s similar to the strategy used over the last year when Pure Michigan was unfunded.

The $15 million appropriation came after Pure Michigan ads went dark for a year. In addition to helping tourism businesses survive the winter, Travel Michigan’s goal is to regain traction the promotion lost during the last year, Lorenz said.

“We have slipped back,” he said.

The amount lawmakers and the governor allocated for Pure Michigan in 2020-21 will mean other changes to the campaign as well. Travel Michigan already has decided not to mount a full national ad campaign next spring for the busy summer travel season, Lorenz said.

Travel Michigan instead will only do regional and in-state campaigns with paid advertising to encourage travel next summer, he said. The agency possibly could do “very focused” ad campaigns in targeted markets nationally “where we feel we can optimize that investment for best return” and steer out-of-state travelers to Michigan for their 2021 summer vacations, Lorenz said.

“We’ll be looking at this as we get closer to the warm weather season” in 2021, he said.

‘New environment’

Even if Travel Michigan had full funding for this year, a broad national campaign using cable TV and digital ads still may not have happened, Lorenz said. Taking Pure Michigan ads back to a broad national stage likely won’t occur until the COVID-19 pandemic wanes and a vaccine is readily available.

Travel Michigan has to “look at the new environment,” Lorenz said.

“It’ll be a while before people are totally comfortable with traveling again,” he said. “Once things do open up — and let’s just assume the vaccine comes soon, it works, (and) people are widely accepting and using it — that’s when the opportunity to encourage travel from far away will really hit. We don’t know when that’s going to be, so the likelihood of us being able to do a full-fledged national campaign would have been less likely anyway.”

Lawmakers originally allocated $37 million for Pure Michigan in fiscal year 2019-20 that ended Sept. 30. Whitmer vetoed the funding a year ago in a budget battle with the Republican-led Legislature. The two sides later agreed to appropriate $15 million to the campaign, which was subsequently eliminated when the state’s economy declined sharply with the onset of the pandemic and state budget cuts.

The partial restoration of Pure Michigan funding and the state’s “renewed commitment” to the campaign drew praise from the Small Business Association of Michigan.

“Over the years, Pure Michigan has done an outstanding job of highlighting all the reasons Michigan is an amazing place to live, work and visit,” SBAM President Brian Calley said. “Millions of trips have been booked because of this campaign and we’re glad to see our state leaders recognize the tremendous value in that.”

Hotel and lodging downturn

An annual analysis commissioned by the Michigan Economic Development Corp. estimated that in 2019, the $16.1 million spent on broadcast, print, digital and outdoor ads using the Pure Michigan brand influenced 1.9 million trips to Michigan. The estimated $2.3 billion in spending by those travelers generated $142 million in state tax revenue, according to the analysis by Indiana-based firm Strategic Marketing and Research Insights LLC.

Data from the national trade group representing the hotel and lodging industry across the U.S. illustrate how hard the travel industry has been hit by the pandemic and restrictions.

The American Hotel & Lodging Association estimates that 38 percent of Michigan’s hotel jobs had been lost through September, or 20,655 of 54,211 jobs.

Another 44,863 of the 193,432 jobs supported by the hotel sector in Michigan have been lost, according to the Washington, D.C.-based trade group, which has been advocating for Congress to enact another aid package that includes support for the industry.

In a September survey, the association found more than two-thirds of 1,000 responding members nationally now employ less than half of their pre-COVID staff. Nearly three-quarters said they would have to make further layoffs without federal assistance.

Half of the owners said they “are in danger of foreclosure by their commercial real estate debt lenders due to COVID-19,” and two-thirds said they can only last six more months at their projected revenue and occupancy levels, according to the survey.

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