Investments in Michigan’s Recreational Resources Paying Big Dividends

Although the reports are very preliminary and in many instances anecdotal, the 2012 travel and tourism season appears to have been the best in nearly a decade.   In a recent WTVB interview, Smith Travel Research said that “the statewide average hotel occupancy rate for the year to date as of July was at 56 percent which represents the highest January through July average since Travel Michigan began tracking the data in 2004.” 

Further evidence of this trend was provided by July monthly data. According to industry estimates, the hotel/motel occupancy rate for the state of Michigan was 70.9 percent during the month of July, the single highest occupancy month for Michigan since 2004.  This, as compared to the national average of 70 percent. Preliminary reports on State Park and Campground use also show significant gains and are likely to at least be similar to the state’s overall gains.

If the overall tourism and recreational spending trend seen in 2011 carries over in a similar manner, then travel and tourism spending in Michigan could top $18.5 billion for 2012.  According to Travel Michigan Vice President George Zimmermann, the vast majority of the $500 million increase realized in 2011 was attributable to out-of-state travelers.  Based upon these and similar estimates, visitor spending in 2012 will also likely generate over $1 billion in State of Michigan tax revenue.

So, what does any of this have to do with northern Michigan conservation and sportsmen’s issues, you almost asked? Well, not to go “all Land Cap” on you, but now that a majority in the Michigan legislature clearly believe that public land ownership is a drag on local and state economies, it is worth reviewing the economic facts associated with this contention.

If we were to conservatively assume that just 10% of this $18.5 billion dollar total is attributable to the presence of State Parks and Michigan-owned/managed public land, $402 per acre in total revenue would be suggested ($1,850,000,000/4,600,000 acres = $402/acre). If we were to assume a land ownership replacement cost of $3,000 per acre, an amount which considers riparian ownership, this would suggest a 7.5 year payback ($3,000/$402 = 7.5).  Even at $4,000 per acre the payback period is only 10 years.

The significance of these figures is even more staggering when one considers that these lands also contribute to the State’s economy in other ways such as timber and mineral production, together with the all-too-seldom mentioned “quality of life.”

Considering that this is also a renewable and perpetual economic resource, we would challenge anyone to find a better public asset, recognizing over 50% of which was given to the State of Michigan “for free” in the form of tax reversion.  Before some get too excited about the prospect of selling public land in the name of economic development as some have advocated, our public officials need to clear up their own “fuzzy math.”

Turning away from public land ownership which is providing a better economic rate of return than are most private investments is an idea that needs to be challenged on the basis of economics and not just for reasons which most of us feel cannot be quantified.  The prospect of arbitrarily selling a rural, State-owned 40 acre parcel which may result in $1,500 tax revenue ($37.50 per acre) and may actually cost the local unit of government more in services than that being received, may play well politically in some areas, but it should be justified for sound economic reasons.

Additionally, none of this analysis even takes into account the considerable aesthetic and use benefit sought by most of the state’s travelers which is offered by lands owned or preserved by our land conservancies which have now been added to the legislative “hit list.”

We won’t pretend to suggest that this informal narrative in any way constitutes a comprehensive cost-benefit analysis of public land ownership and the true cost of servicing private rural lands.  It does, however, reinforce the need for a credible study prepared by a qualified third-party who can provide answers to these questions in the face of what has become of a litany of legislative initiatives, all of which subscribe to what we believe is a false hypothesis.

When it comes to our state’s natural resources, there are many ways we should be measuring how “green” our lands are.

About Northern Michigan Conservation Network

The mission of the Northern Michigan Conservation Network is to "connect conservation-minded hunters, anglers, and outdoor enthusiasts to those issues affecting Michigan's forests, waters, and wildlife."

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