Governor's Tourism Conference Must Address Pure Michigan Shortfalls

Mackinac Center analyst offers counterpoint to state’s promotion campaign

Monday, March 20, 2017

Contact:

Chantal Lovell
Media Relations Manager
989-698-1914
lovell@mackinac.org

MIDLAND — As state tourism officials meet today for the annual Pure Michigan Governor’s Conference on Tourism, one Mackinac Center analyst offered a counter perspective and pointed to research showing the ineffectiveness of taxpayer-funded tourism promotion efforts.

Michael LaFaive, director of the Morey Fiscal Policy Initiative at the Mackinac Center for Public Policy, said the failed Pure Michigan advertising program is “an unfair corporate welfare program for a few, subsidized by taxpayers everywhere.” LaFaive co-authored a study last year examining the economic impact of state-funded tourism promotion programs such as Pure Michigan.

“The Mackinac Center’s research has found that for every $1 million increase in state spending on promoting tourism, only $20,000 in extra economic activity is generated by the lodging industry as a result,” LaFaive said. “To lose 98 cents on the dollar is a hugely negative return on investment and should really cause us to reconsider this massive expenditure.” Other sectors of the tourism economy turned in an even worse performance.

LaFaive encouraged lawmakers to end the advertising program, which will cost taxpayers $34 million this fiscal year. Short of that, he called for the Michigan Economic Development Corporation, which administers the program, to be held to very high standards of public transparency. The state’s contractor claims Pure Michigan generates large returns on investment but refuses to precisely explain how the figures are derived, and the MEDC appears comfortable with that secrecy.

“Because of the wide gulf between Mackinac and MEDC estimates of Pure Michigan’s performance, the Mackinac Center challenged the head of Travel Michigan, David Lorenz, and Diane Richeson, CEO of the Michigan Lodging and Tourism Association, to a public debate,” LaFaive said. “They declined, which speaks volumes. If the numbers they tout were defensible and transparent, they would have no reason to decline an opportunity to set a record straight.”

Meanwhile, LaFaive’s methodology is entirely transparent and explained in the appendix of his study.

Recently, the Mackinac Center sent this postcard regarding the program’s lack of transparency to Michigan lawmakers and reporters.

LaFaive is available for further comment on the issue. To set up an interview with him, please contact:

Chantal Lovell
Media Relations Manager
989-698-1914
lovell@mackinac.org

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