michigan tourism: a look back at the year 2003 · michigan tourism: ... michigan travel industry...

Michigan Tourism: A Look Back at the Year 2003

Lori A. Martin & Charles Shih Travel, Tourism & Recreation Resource Center March

10, 2004

Perc

ent C

hang

e

Michigan Travel Industry Indicators, 2003 vs. 2002 Graph 1: Overall Precipitation in Michigan

70%

50%

30%

10%

-10%

-30%

-50%

-70%

-33.7% -47.8%

11.4%

-8.1%

-11.7% -21.1%

44.5%

7.4%

10.9% -0.9%

Winter Spring Summer Fall Annual

2003 vs. 2002 2003 vs. Normal Source: Data for 10 weather stations obtained from the Midwestern Climate Center

March 10, 2004 Travel, Tourism & Recreation Resource Center 2

Perc

ent

Michigan Travel Industry Indicators, 2003 vs. 2002 Graph 2: Average Maximum Temperatures in Michigan

15% 10% 5% 0%

-5% -10% -15% -20% -25% -30%

4.6%

-1.3% -1.1%

-17.6%

0.6%

-2.4%

1.5%1.2%

0.1%

-2.2%

Winter Spring Summer Fall Annual

2003 vs. 2002 2003 vs. Normal

Source: Data for 12 Weather Stations obtained from the Midwestern Climate Center


Michigan Travel Industry Indicators, 2003 vs. 2002 Graph 3: Economic Indicators

-28.2%

-10.5%

1.6% 0.3%

14.1%

17.2%

Michigan Regular Unleaded Gasoline Prices (Nominal)

National Regular Unleaded Gasoline Prices (Real)

Restaurant Prices (Detroit/Ann Arbor/Flint)

Lodging Prices (U.S. City Average)

Expectations Index (EI)

Present Situation Index (PSI)

-17.5%

-10.8%

-50% -30% -10% 10% 30% Percent Change, 2003 vs. 2002

Consumer Confidence Index (Composite of EI and PSI)

Exchange Rate $Can/$US ($US Stronger)

Sources: University of Michigan, Dept. of Economics; Bureau of Economic Analysis; AAA Michigan; The Conference Board; Federal Reserve Board


Michigan Travel Industry Indicators, 2003 vs. 2002 Graph 4: Travel Activity Indicators

-3.2%

-1.1%

0.6%

1.0%

0.6%

2.2%

3.3%

Highway Traffic Counts (All Available Rural Stations)

State Park Overnight Stays (All Parks)

CVB Room Assessments, U.P. (6 CVBs) CVB

Room Assessments, N.L.P. (12 CVBs) CVB

Room Assessments, S.L.P. (14 CVBs) CVB

Room Assessments, Statewide (32 CVBs)

SIC 701 Sales + Use Taxes

-2.1%

2.4% SIC 701 Use Taxes SIC 701 Sales Taxes

-5% -3% -1% 1% 3% 5%

Percent Change, 2003 vs. 2002

Sources: MDOT; MDNR, Parks & Recreation; MSU Travel, Tourism & Recreation Resource Center; Michigan Dept of Treasury, Office of Revenue & Tax Analysis


Perc

ent

Michigan Travel Industry Indicators, 2003 vs. 2002 Graph 5: Monthly Percent Change in Hospitality Taxes

50% 40% 30% 20% 10%

0% -10% -20% -30% -40%

Sales & Use T axes Sales T axes

Use T axes

Source: Michigan Department of Treasury, Office of Revenue and Tax Analysis


t

e

n b r r y n l g p t v c

Michigan Travel Industry Indicators, 2003 vs. 2002 Graph 6: Monthly Changes in Michigan Travel Indicators

40% State Park Overnight Stays

20%

0%

-20%

-40%

-60%

Highway Traffic Counts

Consumer Confidence Index

Unleaded Gas oline Prices

Sources: Michigan Department of Transportation; AAA Michigan; The Conference Board;

Michigan Department of Natural Resources, Bureau of Parks and Recreation


Perc

ent C

hang

e

Michigan Travel Industry Indicators, 2003 vs. 2002 Graph 7: Welcome Center Visitor Counts & Traffic Counts

4%

2%

0%

-2%

-4%

-6%

-8%

-10%

0.24%

-0.30%

0.95%

-5.90%

0.62%

-0.90%

0.63%

-2.10%

U.P N.L.P. S.L.P. State

Welcome Centers Traffic Counts

Welcome Centers: U.P. Data = Sault Ste. Marie, Menominee, Marquette, Ironwood, & Iron Mt.; N.L.P. Data = Mackinaw City, St. Ignace, & Clare; S.L.P. Data = Port Huron, New Buffalo, Monroe, & Dundee

Source: Travel Michigan, Michigan Department of Transportation


Perc

ent C

hang

e

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

Michigan Travel Industry Indicators, 2003 vs. 2002 Graph 8: Upper Peninsula Travel Indicators

5%

0%

-5%

-10%

Mackinac Bridge Crossings Traffic Counts Welcome Center Counts

Sources: Mackinac Bridge Authority; Michigan Department of Transportation; Travel Michigan


t

e

Michigan Travel Industry Indicators, 2003 vs. 2002 Graph 9: Monthly Percent Change in Indicators

30% 20% 10%

0% -10% -20% -30% -40% -50%

MT II

EI

P SI

CCI

Source: MSU Tourism Center; The Conference Board


Michigan Travel Industry Indicators, 2003 vs. 2002 Graph 10: Percent Change in Assessments and Properties

12%

10%

8%

6%

U.P. N.L.P. S.L.P. Statewide

6.15%

4%

2%

0%

-2%

-4%

-6%

-8%

-1.07%

-5.17%

0% -3.19%

2.16%

2.44% 0.96%

Assessments # of Properties

Source: 2004 TTRRC Survey of Assessment Districts


Michigan Travel Industry Indicators Graph 11: Percent Change Anticipated for 2004

Assessments

8%

6% U.P. N.L.P. S.L.P. Statewide

3.5% 4%

2%

0%

-2%

-4%

-1.0%

2.7%

2.3%

Source: 2004 TTRRC Survey of Assessment Districts


& University 1

Michigan Tourism Outlook Conference

March 10, 2004 Kellogg Center

East Lansing, Michigan

Prepared by: Donald F. Holecek and Teresa Herbowicz Travel, Tourism and Recreation Resource Center

2 & University

HOW ACCURATE WERE TTRRC’S PROJECTIONS

FOR MICHIGAN’S TOURISM IN 2003?

Projected by TTRRC

Actual data

Travel volume

Travel spending

Travel prices

2% 1%

-2% 1%

2-3% 1%

3 & University

COMERICA REPORTS:

"Despite the second-half rebound in Michigan Tourism activity in 2003, the sharply negative comparisons of the first half left Michigan's 2003 tourism industry 2.1 percent below 2002 for the annual average."

"Airline and museum traffic picked up, while vehicular traffic – especially to Canada -- and hotel/motel occupancy slipped in 2003."

David Littmann, chief economist at Comerica Bank

4 & University

AND IN

ng

300

250

Average annual change:

3.7% - traffic counts 4.7% - sales and use tax collection

200 Traffic Counts

Sales and Use Tax Colle ction

150

100

5 & University

WHY 2003

The economy rebounded, but job growth was anemic.

The war in Iraq and poor weather dampened travel demand in the first half of 2003.

Consumers traveled, but spent less on their trips.

Cheap deals on Internet continue to limit industry’s pricing power.

Rebound in business travel volume, but not in spending.

Michigan travel promotion reduced.

Minimum new product to stimulate Michigan travel.

6 & University

IN

Exchange rates

Source: The Wall Street Journal

per $1.00 U.S.:

Canada

Japan

Euro

Mexico

J.P. Morgan Index

Feb. 17 2004

1.31

105.08

0.78

10.90

91.1

Feb. 15 2003

1.52

120.66

1.08

10.82

110.0

% change

-13.8

-12.9

-27.8

+0.7

-17.2

U.S. $ is ...

weaker

weaker

weaker

stronger

weaker

7 & University

IN

2004 2003 %

Interest rates Sources: CNNMoney (money.cnn.com/markets/bondcenter/latest_rates.html) of February 18, 2003

The Wall Street Journal of February 15, 2002 and February 17, 2004 The Washington Post Company (www.washingtonpost.com/wp-dyn/articles/A9006-2003Feb14.html and

www.washingtonpost.com/wp-dyn/articles/A39908-2004Feb13.html)

30-year mortgage (average)

30-year treasury bond

90-day treasury bill

Gasoline prices

Data Source: AAA Michigan after mid February.

5.66

4.91

0.90

5.86

4.86

1.06

-3.4

+1.0

-15.1

Unleaded regular - Michigan 1.71 1.75 -2.3

8 & University

IN

Consumer Confidence Index Source: The Conference Board

End of February

2004

87.3

2003

64.0

% change

+36.4

Unemployment (U.S. - %, seasonally adjusted)

Source: Labor Market Analysis Office and Bureau of Labor Statistics

January 5.6 5.7 -1.8

9 & University

IN

Stock market

Source: The Wall Street Journal

11,722 Jan 2000

Dow Jones

Record levels: 5,048

Mar 2000

Nasdaq

1,500+ Mar 2000

Industrial Avg. composite S&P 500

February 17, 2004 10,714.88 2,080.35 1,156.99

February 14, 2003 7,908.80 1,310.17 834.89

12-month change

% change (year-to-year)

% change (year-to-date)

+2,806.08

+35.5

+2.50

+770.18

+58.8

+3.84

+322.10

+38.6

+4.05

10 & University

1990

1991

1992

f

1993

f

1994

f

1995

f

1996

f

1997

f

1998

f

1999

f

2000

f

2001

f

2002

f

2003

f

2004

f

9

8.5

8

7.5

7

6.5

6

5.5

5

4.5

5.65

5.48

4.86

4.91

4

Source: The Wall Street Journal f - Datum of mid-February

Office of Market Information - Data

11 & University

g

10

9

8

7

6

5

4 Michigan

3 USA

4.0

3.6

5.3

4.8

6.1

5.8

7.0

6.0

2

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Sources: Michigan Department of Labor & Economic Growth, Employment Service Agency

INDEX

12 & University

Base

yea

r: 1

985

=

160

140

120

100

80

60

40

Source: The Conference Board f- datum for February

INDEX

13 & University

Bas

e ye

ar: 1

985

=

130

120

110

100

90

80

70 Consumer Confidence

60 Present Situation

Expectations 50

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F

2001 2002 2003

Source: The Conference Board

14 & University

INDEX

120

110

100

Consumer Sentiment

Current Situation

Expectations

90

80

70

60 J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F

2001 2002 2003

Source: “Surveys of Consumers” University of Michigan

15 & University

By Nick Ut, AP

Source: USA TODAY

16 & University

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

(Unleaded regular)

$1.80

$1.60

$1.40

Price in dollars current for each year Base period: 1982-84 = 100

$1.20

$1.00

$0.80

$0.60

$0.40

Sources: AAA Michigan Federal Reserve Bank of Minneapolis.

17 & University

MICHIGAN

J F M A M J J A S O N



J

$2.00

$1.75

$1.50

$1.25

$1.00

Source: AAA Michigan

18 & University

GROWTH OF GDP

Per

cent

age

UNITED STATES

6

5

4

3 2.3

2

3.7

3.9

4.2

4.1

2.2

3.1

4.9

3.8

1 0.3

0 1996 1997 1998 1999 2000 2001 2002 2003 2004p 2005p

Source: RSQE - University of Michigan p = projected as of February 13, 2004

19 & University

GROWTH OF UNITED

Per

cent

age

6

5

4 2.9

3

2

2.8

3.1

3.2

3.5

1.8

3.8

2.5

4.3

2.8

1

0 1996 1997 1998 1999 2000 2001 2002 2003 2004p 2005p

Source: RSQE - University of Michigan

p = projected as of February 13, 2004

GROWTH OF MICHIGAN

20 & University

Per

cent

age

6

5

4

3

2 1.2 1.3

1

1.9

1.1

1.9

0.7

1.7 1.7

4.4 3.2

0 1996 1997 1998 1999 2000 2001 2002 2003 2004p 2005p


p = projected as of November 2003

21 & University

OF

Per

cent

age

5

4

3 2.6 2.4 2.2 2.5

2

3.5

2.9

2.7

2.3

1.7

2.3

1

0 1996 1997 1998 1999 2000 2001 2002 2003 2004p 2005p



22 & University

OF UNITED

Per

cent

age

4 Prv. Nonfarm / Core

Consumption / All Items 3

3.4

2.8

2.3

2.3

2.3

2 1.6

1

2.1 1.9

2.1 0.9 0.8

1.4

2.2 2.1 2.1 1.6

1.5 1.5

1.5

2.1

0 1996 1997 1998 1999 2000 2001 2002 2003 2004p 2005p



23 & University

UNITED

Per

cent

age

8

7 5.4

6

5

4

5.0

4.5

4.2

4.0

4.8

5.8 6.0

5.4

4.9

3

2

1

0 1996 1997 1998 1999 2000 2001 2002 2003 2004p 2005p



24 & University

MICHIGAN

Per

cent

age

8

7

6 4.7 5

4

4.1

3.8

3.6

3.4

5.0

6.1

7.1 7.0

5.9

3

2

1

0 1996 1997 1998 1999 2000 2001 2002 2003 2004p 2005p



25 & University

COMPOSITION OF IN MICHIGAN

Thou

sand

s

30

25

20 Actual

15

10

5

0

-5

-10

-15

-20

-25

1 2 1 2 1 2

Manufacturing Trade, Trans portation, Utilities Services Other

2003 2004p 2005p

Source: RSQE - University of Michigan p = projected as of November 2003

26 & University

IN MICHIGAN

160

155

150

145

140

135

130

125

120

115

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D

2000 2001 2002

Index = 3-month moving average Index = % more intentions - % less intentions + 100

Source: Travel, Tourism & Recreation Resource Center

2003 Due to lack of funding to conduct the Michigan Travel Market Survey, Travel Intentions Index data were not collected after June 2003.

27 & University

OVERALL TRAVELER SENTIMENT INDEX

120

115

110

105

100

95

90

85 U.S. average, 2000 = 100

80

Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4 Q 1 Q 2 Q 3 Q 4

2000 2001 2002 2003

Index = measure of travelers’ financial and time-wise ability to travel, interest in leisure travel, perception of service quality, and affordability of travel.

Source: Travel Industry Association of America, November 2003.

28 & University

2004

Business Week’s economic forecast

Real GDP

4.1%

Consumer prices

1.9%

Unemployment rate

5.6%

Source: Business Week. December 29, 2003 / January 5, 2004. Consensus values; based on opinions of 60 representatives of major companies. Real GDP and unemployment rates for fourth quarter of 2004.

The Livingston survey 4.2% 1.9% 5.6%

Source: Research Dept., Federal Reserve of Philadelphia, Livingston Survey. December 19, 2003. Average values; based on opinions of 25 forecasters.

Federal Reserve 4.7% 1.1% 5.9%

Source: Federal Reserve Board.“Monetary Policy Report to the Congress” of February 11, 2004. www.federalreserve.gov/boarddocs/hh/2004/february/fullreport.htm (Central tendencies)

IN 2004

Travel volume

Travel spending

Travel prices

Source: Travel Industry Association of America (TIA)

4.2% 3.2%

4.4%

%

Business travel Leisure travel

Travel, Tourism & Recreation Resource Center, Michigan State University 29

2004

30 & University

Unemployment is high in Michigan and its prime travel markets, and it will decline only slightly.

Stocks are up significantly but below their peak– negative wealth effect.

Low interest rates hurting retiree incomes tied to money market, certificates of deposits, etc.

Low-interest refinancing income boost is waning. Fear and inconvenience of air travel.

31 & University

2004

State deficit – reductions in services and/or closings of premises.

Pricing power is limited by lower prices offered on Internet and substitutions on the trip.

Consumer confidence is relatively low and volatile. Continuing promotion budget slippage.

32 & University

WILD

Terrorism – will it strike again this year? Where?

Disruption in fuel supply. Gasoline prices above $2.50? Weather – rarely “normal” in Michigan.

33 & University

2004

Moderately positive economic forecasts.

Moderate inflation.

Strong auto travel probable: new car sales, less air travel, reduced travel budgets.

Underlying demand is growing.

Industry performance was “OK” in 2003 in what proved to be a challenging year.

Investment funding abundant or “cheap”.

34 & University

2004

Weaker dollar, especially versus Canadian currency.

Continuation of consumers’ tendency to limit air and long-distance travel.

Record sales of RVs.

Negative psychology may be unwarranted and/or overblown.

National travel forecast improved over last year.

Business and conference travel is rebounding.

Business profits strong – more investments, more travel.

35 & University

TTRRC / MSU PROJECTIONS FOR MICHIGAN TOURISM IN 2004

Travel volume Traffic counts

3-4%

Travel spending Use and sales lodging tax

Travel prices Lodging and restaurant price changes / 2

4-5%

1-2%

36 & University

/ MSU

FOR MICHIGAN TOURISM IN 2004 BY SELECTED MARKET SEGMENT

Outdoor recreation/camping -

Golfing (upscale resorts) -

Gaming -

Shopping -

4-5%

2-3%

4-5%

4-6%

Lodging - 3-4%

37 & University

/ MSU

FOR MICHIGAN TOURISM IN 2004 BY REGION

Upper Peninsula 4-5%

Northern Lower P. 3-4%

Southwestern region 2-3%

Southeastern region 3-4%

38 & University

/ MSU

& University

CONTACT INFORMATION

Dr. Donald F. Holecek, Director

Travel, Tourism, and Recreation Resource Center Michigan State University 172 Natural Resources Bldg. East Lansing, MI 48824-1222

Phone: 517-353-0793 Fax: 517-432-2296 E-mail: [email protected]

Web site: www.tourismcenter.msu.edu Web site: www.tourism.msu.edu Web site: www.tourismcenter.msu.edu/MTVTA/

39 & University

/ MSU

Web site: www.imakenews.com/tourism/

38

michigan tourism: a look back at the year 2003 · michigan tourism: ... michigan travel industry...

Documents