Study shows the economic importance of tourism in the counties of the western U.P.

Tourists flock to the Upper Peninsula of Michigan year-round. Every season offers attractions that make the U.P. a favorite travel destination.

The Western U.P. Planning and Development Region (WUPPDR) wanted to know the economic impact of tourism in that region. So, in 2022 the WUPPDR contracted with the University of Michigan’s Economic Growth Institute (EGI) to conduct an analysis of the economic impact of tourism in the western U.P. 

“There was a lack of locally derived data about the impacts of visitor spending,” explained Jerry Wuorenmaa, executive director of WUPPDR. “Some spending data is available from the state, but it is not based on comprehensive research including field data collection through surveys. Having this in-depth data will help us more accurately represent the big-picture impacts of the tourism industry to stakeholders and the general public.”

WUPPDR is a state-designated planning and regional/federal economic development district that fosters stable and diversified economies in the western U.P. Its member governments include Baraga, Gogebic, Houghton, Iron, Keweenaw, and Ontonagon counties, the cities of Hancock, Houghton and Wakefield, L’Anse and Ontonagon villages, and Calumet and Portage charter townships. 

According to its website, the University of Michigan Economic Growth Institute leverages university resources, research, technologies and expertise to foster innovation that helps local and state communities develop a positive economic impact. 

The WUPPDR study was funded by a grant from the U.S. Department of Commerce’s Economic Development Administration. It involved extensive field research, including seasonal surveys of visitors to the region. The EGI then analyzed the data and issued a report in May.  

The study looked at visitor preferences and behaviors in the western U.P., focusing on the region's diverse outdoor activities, levels of visitor satisfaction, tax revenues generated from tourism and employment income in the tourist industry   

Research Project Director Eli McClain said he hopes their findings can inform future growth of the tourism industry in the U.P. and policy decisions by local governments, chambers of commerce and business owners. 

How the study was conducted

The EGI collected data through multiple surveys of tourists who visited the western U.P. and business owners who provided services for tourists or relied on tourism. The institute also surveyed local residents, employees of tourism businesses, governments and chambers of commerce.  Then they analyzed the data and prepared the final report.

“We looked at the destinations of tourists, the activities they participated in, why they came to the western U.P., how much they spent, their demographics and where they were from,” said McClain.

Data was collected and analyzed about trip length, size of parties, visitor origin, purpose of trips, activities, destinations, season visited, household income and visitor spending. Then the EGI compiled what it calls a net promoter score, which measures visitor satisfaction and the likelihood that they will recommend visiting the western U.P. to their families and friends. 

What the study found

The estimated number of visitor trips was 2,076,847. Visitor satisfaction was high. A large percentage of visitors said they would recommend trips to the area. Researchers found that the most popular activity was public camping. The attraction of other activities, such as hiking, biking, skiing, snowmobiling or exploring the natural beauty of the area, varied by season.

Michigan Technological UniversityA skier at Mont Ripley. Winter sports like skiing and snowmobiling attract tourists to the region.

The study found that visitors staying four days spent an average of $356.61 per person. If they stayed at campgrounds or RV parks, each person spent an average of $232.84.  

The researchers also looked at the number of jobs and income earned by employment in tourism-related industries, including lodging, food and beverage, recreation and entertainment, transportation and retail. They counted 2,401 jobs generating $99.2 million in income, most of which is spent locally, positively impacting the regional economy.

Tax revenue from tourism totaled $45.5 million in local and state taxes. 
Although visitors hailed from 48 states and foreign countries, a majority were from Michigan, Wisconsin and Minnesota. 

McClain was not surprised by the findings because researchers try not to enter a study with preconceived expectations, he said.

"We try to come to all projects with an open mind,” he explained. “We just wanted to find out what is unique about the region by engaging with the people who visit, live and work there.”

A native of New York state who now lives in Ann Arbor, McClain says he was excited to visit the western U.P. himself and learn more about it by engaging with visitors and locals there. 

The report included no recommendations for action. EGI’s role is to provide information that local governments, businesses and individuals can use to determine where they might want to put more investment, to take the tourism industries into consideration in their planning and to find ways to promote non-seasonally related activities to attract more visitors, he said. 

Reactions to the report

“Tourism is a vital element of both the business and cultural life of Gogebic County, and the data in this report pointed out just how large a role it plays,” said Michael Meyer, director of the Ironwood Area Chamber of Commerce. “One of the most gratifying elements in the report was that our net promoter score, which measured visitor satisfaction and recommendations, ranged from 70 percent during the summer to 88 percent in spring, showing that tourists enjoy their stay and are recommending travel here to their friends.”

The Chamber of Commerce has placed the full report on its website and distributed it to its members. “We plan to host an in-person workshop where businesses and organizations can analyze the particular portion of the results that relate to our county and see what new marketing and/or operational strategies can be developed to better align with the report’s data,” Meyer said.

Mary Beth DeFazio, president of the Lake Gogebic Area Chamber of Commerce, also found the report valuable. The owner of award-winning AJ’s Lodge & Oven on the north shore of Lake Gogebic, DeFazio said that the report opened her eyes to some of the underserved markets and opportunities in her community.

Most of the visitors to Lake Gogebic come for snowmobiling in winter and ORV/ATV riding in summer. DeFazio said. She and the chamber of commerce are aware of a lack of ORV/ATV trails in their area and are already working hard to get more trails. “We also need to meet the needs of people who come to watch the Northern Lights and to create more special events,” she said. 

“We need destination marketing,” DeFazio went on to say. “We need to give people a reason to come and a reason to stay longer.”

The Lake Gogebic Area Chamber of Commerce had a strategic planning meeting in March, and they will discuss the WUPPDR report at the next chamber meeting. “We need to take a 20,000-foot view,” DeFazio said.

The analysis in the report raises the profile of tourism as an economic driver, said WUPPDR’s Wuorenmaa. “It can be used to educate local officials, community organizations and the general public about the significance of the industry, both regionally and in their local areas. We hope the results of the project will be useful to localized efforts, and we intend to utilize the material for future regional initiatives,” he said. 

The final economic impact report can be seen at Understanding Tourism
Impacts in the Western U.P.

Jennifer Donovan is a reporter with more than 40 years of experience on daily newspapers, magazines and university writing and editing. She is retired as director of news and media relations at Michigan Technological University and lives in Houghton.
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