An Analysis of State-Funded Tourism Promotion

This study assesses whether the Pure Michigan promotion program boosts economic activity in the Michigan’s hotel and accommodation, amusement and recreation, and arts and entertainment industries. The study finds a statistically significant, gross positive impact, but it was very small on average. For every additional $1 million spent on tourism promotion about $20,000 in extra income was generated for the hotel and motel industry. While this was a national model, Michigan was not any different from the average. Maryland, Mississippi and Nevada had large and statistically meaningful returns—one as large as $300,000 for every additional $1,000,000 spent. Even with this large return, however, it—like the national average—represents a large net negative return.

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