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Report argues that "Pure Michigan" benefits are fiction

Nov 2, 2016

The “Pure Michigan” tourism campaign is a net money-loser for the state.

At least that’s what researchers at the free-market Mackinac Center for Public Policy conclude in a new report.

The think tank specifically takes issues with a recent study, commissioned by the Michigan Economic Development Corporation, that says Pure Michigan produces at least a seven-fold rate of return on investment.

The problem is that “the contractor that the state hired to calculate a return on investment for the program categorically refused to explain precisely how he did so,” says Michael LaFaive, the Mackinac Center’s director of fiscal policy.

LaFaive says he built an economic model that examined years of tourism-promotion campaigns in 48 states, and their impact on certain sectors of the economy.

“We found a corresponding increase of just $20,000 in additional economic activity—that’s not even revenue, but economic activity—in the state’s hotel and motel industries,” LaFaive said.

In general, “for every $1 million increase in [tourism-promotion] spending we found this minor increase in extra economic activity. But it certainly did not offset the cost of generating that extra economic activity.”

The MEDC did not directly respond to calls to produce the “unverifiable” data behind its finding.

The agency issued the following statement:

"We stand by the economic impact and ROI data in the Longwoods Study and are confident in its methodology and results. The Pure Michigan campaign has proven time and again to be a strong investment for the state. We are focused on our efforts, in partnership with the industry, to continue growing tourism, and the economic impact it generates, across the state."