Michigan Tourism 2002: Year In Review · Michigan Tourism 2002: Year In Review ... -5.11!!!! Travel, Tourism & Recreation Resource ... J F M A M J J A S O N D J F M A M J J A S O

MichiganMichigan TourismTourism 2002:2002: YearYear InIn ReviewReview

LoriLori A.A. MartinMartin && CharlesCharles ShihShih

MichiganMichigan Travel,Travel, TourismTourism && RecreationRecreation ResourceResource

CenterCenter

MarchMarch 5,5, 20032003

Perc

ent C

hang

e

MichiganMichigan TravelTravel IndustryIndustry Indicators,Indicators, 20022002 vs.vs. 20012001

GraphGraph 1:1: OverallOverall PrecipitationPrecipitation inin MichiganMichigan

30% 20% 10%

0% -10% -20% -30% -40% -50% -60%

-13% -21%

16%

6%

13%

-11%

-30% -47%

-12% -9%

Winter Spring Summer Fall Annual

2002 vs. 2001 2002 vs. Normal

Source:Source: DataData forfor 1212 WeatherWeather StationsStations ObtainedObtained fromfrom thethe MidwesteMidweste rrnn

ClimateClimate CenterCenter

March 5, 2003 Michigan Travel, Tourism & Recreation Resource Center 2

Perc

ent C

hang

e


GraphGraph 2:2: AverageAverage MaximumMaximum TemperaturesTemperatures inin MichiganMichigan

30% 25% 20% 15% 10% 5% 0%

-5% -10% -15%

22%

5%

-8%

-6%

1% 3%

-4%

-1%

2%

-2%

Winter Spring Summer Fall Annual

2002 vs. 2001 2002 vs. Normal

Source:Source: DataData forfor 1212 WeatherWeather StationsStations ObtainedObtained fromfrom thethe MidwesteMidweste rrnn

ClimateClimate CenterCenter



GraphGraph 3:3: EconomicEconomic IndicatorsIndicators

-33.1%

-7.6%

-7.1%

-1.0% -9.2%

2.2%

1.3%

17.7%

MichiganMichigan RegularRegular UnUn ll ee adedaded GasolineGasoline PricesPrices

(Nominal)(Nominal) NationalNational RegularRegular UnleadedUnleaded GasolineGasoline

PricesPrices (Real)(Real) RestaurantRestaurant PricesPrices (Detroit/Ann(Detroit/Ann

ArboArbo rr /Flint)/Flint)

LodgingLodging PrPr ii cesces (U.S.(U.S. CityCity

Average)Average) ExpecExpec tt ationsations IndexIndex

(EI)(EI)

PresentPresent SituationSituation IndexIndex (P(P SSI)I)

ConsuConsu mmerer ConfidenConfidencc ee IndexIndex (((CCCooommmpppooosssiiittteee ofof EIEI

andand PSI)PSI) ExchangeExchange RateRate $Can/$US$Can/$US ($($ UUSS

StrongerStronger ))

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

PercentPercent CC hh ange,ange, 20022002 vs.vs. 20012001

Sources:Sources: UniversityUniversity ofof Michigan,Michigan, DD ee pt.pt. ofof EE cc onomics;onomics; BureauBureau ofof EE conomicconomic AnalysiAnalysi ss ;; AAAAAA Michigan;Michigan; TheThe ConferenceConference Board;Board; FederalFederal ReserveReserve BoardBoard


Michigan Travel Industry Indicators, 2002 vs. 2001 Graph 4: Travel Activity Indicators

-7.4%

-7.8%

-6.5%

-9.7%

-2.0%

3.1%

0.7%

3.3%

3.0%

0.3%

HighwayHighway TTrr affaff ii cc CountsCounts (All(All AvailAvail aa bleble RurRur aa ll

Stations)Stations) StateState ParkPark OvernightOvernight StSt aa ysys (All(All

Parks)Parks)

AggregateAggregate AttracAttrac tt ii onsons AttendanAttendancc ee (10(10

AttractAttract ii ons)ons) CVBCVB RoRo oo mm Assessments,Assessments, UPUP

(( UUPTRAPTRA ++ 66 CVBs)CVBs) CVBCVB RoRo oo mm

Assessments,Assessments, NLPNLP (14(14 CVBs)CVBs)

CVBCVB RoRo oo mm Assessments,Assessments, SLPSLP (13(13 CVBs)CVBs) CVBCVB RoRo oo mm Assess.,Assess., StatewideStatewide (UP(UP TT RARA ++ 3333

CVBs)CVBs) SICSIC 701701 SalesSales ++ UUsese TTaa xesxes

SICSIC 701701 UUsese TaxesTaxes SICSIC 701701 SalesSales TaxesTaxes

-15% -10% -5% 0% 5% 10%

PercentPercent CC hh ange,ange, 20022002 vs.vs. 20012001

SoSo uurr ces:ces: MDOT;MDOT; MDNR,MDNR, ParksParks && Recreation;Recreation; MM ii chiganchigan HiHi ss toricaltorical MM uu ss ee uu m;m; USUS NPS;NPS; SooSoo Locks;Locks; FlintFlint CulturalCultural Center;Center; MSUMSU TourismTourism Center;Center; MM ii chiganchigan DeptDept ofof Treasury,Treasury, OfficeOffice ofof RevenueRevenue && TaxTax AnalysisAnalysis


Perc

ent C

hang

e

Jan

Feb

Mar

A

pr

May

Ju

n Jul

Aug

Se

p O

ct

Nov

D

ec


GraphGraph 5:5: MonthlyMonthly PercentPercent ChangeChange inin HospitalityHospitality TaxesTaxes

10%

0%

-10%

-20%

-30%

Sales & Use T axes

Sales T axes

Use T axes

Source:Source: MichiganMichigan DepartmentDepartment ofof Treasury,Treasury, OfficeOffice ofof RevenueRevenue andand TTaxax AnalysisAnalysis


P e r c

e n t C

h a ng

e

Ja n

Fe b

M a r

A p r

M a y

Ju n Ju l

A u g

Se

p

O c

t

N o v

D e c


GraphGraph 6:6: MonthlyMonthly ChangesChanges inin MichiganMichigan TravelTravel IndicatorsIndicators

60%

40%

20%

0%

-20%

-40%

State Park Overnight Stays Highway Traffic Counts Consumer Confidence Index

Unleaded Gasoline Prices

Sources:Sources: MM ichiganichigan DepartmentDepartment ofof TransportTransport aa tt ion;ion; AAAAAA Michigan;Michigan; TT hh ee CoCo nferencenference BB oo aa rr d;d; MichiganMichigan

DepartmentDepartment ofof NaturalNatural ReRe ss ources,ources, BB uu reaureau ofof ParksParks andand RecreationRecreation


Perc

ent C

hang

e


GraphGraph 7:7: WelcomeWelcome CenterCenter VisitorVisitor CountsCounts && TrafficTraffic CountsCounts

6%

4% 2%

2% 1%

0%

-2%

-4%

-6%

4% 3% 3%

2% 1%

-4%

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

Welcome Centers Traffic Counts

WW eelcomelcome Centers:Centers: U.P.U.P. DataData == SaultSault Ste.Ste. Marie,Marie, MM eenono mm inee,inee, Marquette,Marquette, Ironwood,Ironwood, && IronIron Mt.;Mt.; N.L.P.N.L.P. DataData == MaMa ckinawckinaw CityCity && CC ll are;are; S.L.P.S.L.P. DataData == PortPort Huron,Huron, NewNew Buffalo,Buffalo,

MonroeMonroe ColdwaterColdwater && DundeeDundee

Source:Source: TravelTravel Michigan,Michigan, MichiganMichigan DepartmentDepartment ofof TransportationTransportation


Perc

ent C

hang

e

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec


GraphGraph 8:8: UpperUpper PeninsulaPeninsula TravelTravel IndicatorsIndicators

15%

10%

5%

0%

-5%

-10%

-15%

Mackinac Bridge Crossings Traffic Counts Welcome Center Counts

Sources:Sources: MackinacMackinac BridgeBridge Authority;Authority; MDOT;MDOT; TravelTravel

MichiganMichigan


Perc

ent C

hang

e

Jan

Feb

M ar

Ap r

M ay

Jun

July

Aug

Sep

Oct

Nov

Dec


GraphGraph 9:9: MonthlyMonthly PercentPercent ChangeChange inin IndicatorsIndicators

60%

40%

20%

0%

-20%

-40%

-60%

MTII

EI

PSI

CCI

SouSou rce:rce: MSUMSU TourismTourism Center;Center; TheThe ConferenceConference BoardBoard



GraphGraph 10:10: PercentPercent ChangeChange inin AssessmentsAssessments andand PropertiesProperties

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

4%

2%

0%

-2%

-4%

-6%

-8% -10%

-7.4%

0.0%

0.8%

-2.0%

3.0% 2.7%

0.3%

1.2%

Assessments # of Properties

Source:Source: 20032003 TTRRCTTRRC SurveySurvey ofof AssessmentAssessment Districts,Districts, TravelTravel

MichiMichigganan


MichiganMichigan TravelTravel IndustryIndustry IndicatorsIndicators

GraphGraph 11:11: PercentPercent ChangeChange AnticipatedAnticipated forfor 20032003 AssessmentsAssessments

6%

4% 3.2%

2%

1.1%

1.9%

1.9%

0%

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

Source:Source: 20032003 TTRRCTTRRC SurveySurvey ofof AssessmentAssessment DistrictsDistricts


Travel, Tourism & Recreation Resource Center, Michigan State University

East Lansin

Michigan Tourism Outlook Conference

March 5, 2003

Kellogg Center g, Michigan

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

HOW ACCURATE WERE TTRRC’S PROJECTIONS

FOR MICHIGAN’S TOURISM IN 2003?

Projected by TTRRC

Actual data

Travel volume

Travel spending

Travel prices

3-4%

5-6%

3-4%

3.1%

-10%

0% Travel, Tourism & Recreation Resource Center, Michigan State University

WHY 2002 PROJECTIONS WERE OFF TARGET?

Economic forecasts were too “rosy”.

Growing unemployment.

Consumers travel, but spend less on a trip.

Cheap deals on Internet and easy substitutions on the trip.

Threat of war with Iraq.

No rebound in business travel.

Continuing decline in stock markets. Travel, Tourism & Recreation Resource Center, Michigan State University

TRENDS IN FACTORS THAT INFLUENCE TRAVEL (I)

Euro data: x-rates.com (www.x-rates.com/cgi-bin/hlookup.cgi) Other data: The Wall Street Journal

per $1.00 U.S.:

Canada

Japan

Euro

Mexico

J.P. Morgan Index

Feb. 14 2003

1.52

120.66

1.08

10.82

110.0

Feb. 15 2002

1.59

132.57

1.14

9.06

124.60

% change

-4.4

-9.0

-5.3

+19.4

-11.7

U.S. $ is ...

weaker

weaker

weaker

stronger

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

TRENDS IN FACTORS THAT INFLUENCE TRAVEL (II)

2003 2002 % change

Data source: CNNMoney (money.cnn.com/markets/bondcenter/latest_rates.html) of February 18, 2003 The Wall Street Journal of February 15, 2002. The Washington Post Company (www.washingtonpost.com/wp-dyn/articles/A9006-2003Feb14.html) of Feb. 14, 200

30-year mortgage (average)

30-year treasury bond

90-day treasury bond

5.86

4.86

1.06

6.86

5.48

1.71

-14.6

-11.3

-38.0

Data Source: AAA Michigan after mid February.

Unleaded regular - Michigan 1.75 1.15 +52.2 Travel, Tourism & Recreation Resource Center, Michigan State University

TRENDS IN FACTORS THAT INFLUENCE TRAVEL (III)

2003 2002 % change

Data source: The Conference Board

End of February 64.0 94.1 -32.0

Data source: Labor Market Analysis Office and Bureau of Labor Statistics

January 5.7 5.6 +1.8 Travel, Tourism & Recreation Resource Center, Michigan State University

TRENDS IN FACTORS THAT INFLUENCE TRAVEL (IV)

Data source: The Wall Street Journal

Dow Jones Industrial Avg.

Nasdaq composite S&P 500

February 14, 2003 7,908.80 1,310.17 834.89

February 15, 2002

12-month change

% change (year-to-year)

% change (year-to-date)

9,903.04

-1,994.24

-20.14

-5.19

1,805.20

-495.03

-27.42

-1.9

1,104.18

-269.29

-24.39

-5.11 Travel, Tourism & Recreation Resource Center, Michigan State University

Perc

enta

ge

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

30-YEAR TREASURY BOND INTEREST RATES

9

8.5

8

7.5

7

6.5

6

5.5

5

4.5

5.65 5.48 4.86

4

Data source: The Wall Street Journal f - Data of mid-February Travel, Tourism & Recreation Resource Center, Michigan State University

Perc

enta

ge

UNEMPLOYMENT RATES

10

9

8

7

6

5

4 Michigan

3 USA

4.0 3.6

5.3 4.8

6.1

5.8

2

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

Data source: Michigan Department of Career Development, Employment Service Agency Office of Labor Market Information - LAUS Data


Base

yea

r: 1

985

= 10

0

1978

19

79

1980

19

81

1982

19

83

1984

19

85

1986

19

87

1988

19

89

1990

19

91

1992

19

93

1994

19

95

1996

19

97

1998

19

99

2000

20

01

2002

20

03f

CONSUMER CONFIDENCE INDEX

160

140

120

100

80

60

40

Data source: The Conference Board f- datum for February Travel, Tourism & Recreation Resource Center, Michigan State University

Bas

e ye

ar: 1

985

= 10

0

CONSUMER INDEXES (January 2001 – February 2003)

130

120

110

Consumer confidence

Present situation

Expectations

100

90

80

70

60

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

2001 2002

Data source: The Conference Board Travel, Tourism & Recreation Resource Center, Michigan State University

Bas

e ye

ar: 1

985

= 10

0

CONSUMER INDEXES (January 2001 – February 2003)

100

Consumer confidence

Expectations

90

80

70 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

Data source: “Surveys of Consumers” University of Michigan

Dol

lars

1982

1983

1984

1985

19

86

1987

1988

19

89

1990

1991

1992

19

93

1994

1995

19

96

1997

1998

1999

20

00

2001

2002

GASOLINE PRICES: 1979 – 2002 (Unleaded regular)

1.6

1.4

1.2

1

0.8

0.6

Price in dollars current for each year

0.4 Base period: 1982-84 = 100

Data source: Bureau of Labor Statistics Data and AAA Michigan. Travel, Tourism & Recreation Resource Center, Michigan State University

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

2001

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

2002

MICHIGAN GASOLINE PRICES January 2001 - February 2003

(Unleaded regular)

$2.0

$1.8

$1.6

$1.4

$1.2

$1.0

J F

Data source: AAA Michigan

Se II Cash or Se111e Credit

- R g

9

Perc

enta

ge

GROWTH OF REAL GDP UNITED STATES

6

5

4

3 2.3

3.7 3.9

4.2 4.1

2.4 2.7

3.8

2

1 0.3

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

Source: RSQE - University of Michigan p = projected as of February 14, 2003

Perc

enta

ge

GROWTH OF REAL DISPOSABLE INCOME UNITED STATES

5

4 2.9

3

2

2.8

3.1

3.2

3.5

1.8

4.5

3.2

3.8

1

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

Source: RSQE - University of Michigan

p = projected as of February 14, 2003


Perc

enta

ge

GROWTH OF REAL DISPOSABLE INCOME MICHIGAN

3 3.2

2

1.2

1

1.3

1.9 1.1

1.9

0.7

1.7 1.8

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


p = projected as of November 2002


Perc

enta

ge

3

RATE OF INFLATION DETROIT CPI

4

2.6 2.4

2.2

2.5

3.5

2.9

2.7 2.7

2.4

2

1

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




Perc

enta

ge

RATES OF PRICE INFLATION UNITED STATES

4 Prv. Nonfarm

Consumption 3

3.4

2.8

2.4

2.3

2.1 2.1 1.9

2.2 2.1 2.1 2.1 2

1.6

1

0.9

0.8

1.4

0.8

1.6 1.5

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




Perc

enta

ge

CIVILIAN UNEMPLOYMENT RATE UNITED STATES

7

6 5.4

5

4

5.0

4.5

4.2

4.0

4.8

5.8 5.8 5.5

3

2

1

0

1996 1997 1998 1999 2000 2001 2002 2003p 2004p




Perc

enta

ge

UNEMPLOYMENT RATE MICHIGAN

7

6 4.7

5

4

4.1

3.8

3.6

3.4

5.0

6.1 6.2 5.6

3

2

1

0

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




Thou

sand

s

COMPOSITION OF CHANGES IN EMPLOYMENT

20

15

10

5

0

1 2 1 2 1 2 1 2 1 2 -5

- 10

- 15

-20

Actual

Manufacturing Retail Trade Service Other

-25

-30

-35

2000 2001 2002 2003p Source: RSQE - University of Michigan

2004p p = projected as of November 2002


TREND IN MICHIGAN TRAVEL INTENTIONS INDEX

160

155 2 150 0 145 0 140 3

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

2000 2001 2002 Index = 3-month moving average Index = % more intentions - % less intentions + 100

Source: Travel, Tourism & Recreation Resource Center


ECONOMIC FORECASTS FOR 2003

Business Week’s economic forecast

Source: Business Week. December 30, 2002.

Real GDP

3.2%

Consumer prices

2.2%

Unemployment rate

5.7%

Consensus values; based on opinions of 66 representatives of major companies. Real GDP and unemployment rate is for fourth quarter 2003.

The Livingston survey 3.2% 2.3% 5.7%

Source: Research Dept., Federal Reserve of Philadelphia, Livingston Survey. December 2002. Average values; based on opinions of 29 forecasters.

Federal Reserve 3.2-3.5% 1.2-1.5% 5.7-6.0%

Source: Board of Governors of the Federal Reserve System.“Monetary Policy Report to the Congress” http://www.federalreserve.gov/BoardDocs/HH/2003/february/FullReport.pdf. February 11, 2003. (Central tendencies)


TRAVEL INDUSTRY ASSOC. OF AMERICA’S FORECAST FOR U.S.

DOMESTIC TRAVEL IN 2003

Travel volume 2.5%

Travel

spending

4.1%

Travel

prices

3.3%


NEGATIVE INDICATORS 2003 (I)

The U.S. economy is “probably” climbing out of a recession BUT recovery is expected to be sluggish and slow to materialize.

Unemployment is high and expected to rise until economic recovery is well under way.

Stocks are down significantly since 2000– negative wealth effect.

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

Fear and inconvenience of air travel. Travel, Tourism & Recreation Resource Center, Michigan State University

NEGATIVE INDICATORS 2003 (II)

“The entire [worldwide] travel and tourism industry is being held hostage by the threat of war” with Iraq and North Korea.

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 near a historical low. Continuing promotion budget slippage.


THE WILD CARDS

War with in Iraq and North Korea – When will uncertainty diminish?

Terrorism – will it strike again this year, especially if we go to war?

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


POSITIVE INDICATORS 2003 (I)

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 2001 in what proved to be a challenging year.


POSITIVE INDICATORS 2003 (II)

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.


TTRRC / MSU PROJECTIONS FOR MICHIGAN TOURISM IN 2003

PROVIDED GAS PRICES DO NOT GO ABOVE $2.50.

Travel volume Traffic counts

Travel spending Use and sales lodging tax

Travel prices Lodging and restaurant price changes / 2

2%

-2% *

2-3% *

*) This combination points to occupancy rate decline of 4-5%. Travel, Tourism & Recreation Resource Center, Michigan State University


BY SELECTED MARKET SEGMENT


Outdoor recreation/camping -

Golfing (upscale resorts) -

Gaming -

Shopping -

0-1%

0%

3-4%

3-4%

Lodging - -(2-3)% Travel, Tourism & Recreation Resource Center, Michigan State University


BY REGION


Upper Peninsula 1%

Northern Lower P.

2%

Southwestern region

3%

Southeastern region

0% Travel, Tourism & Recreation Resource Center, Michigan State University

, f'L..d

Th r'5 A Glf'J. fiRS


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/ Web site: www.imakenews.com/tourism/

Documents

Michigan Tourism 2002: Year In Review · Michigan Tourism 2002: Year In Review ... -5.11!!!! Travel, Tourism & Recreation Resource ... J F M A M J J A S O N D J F M A M J J A S O