Visitors are integral to Michigan’s economy, generating significant financial benefits for residents and local businesses. Visitor activity also produces substantial tax revenue which supports government services.
Credible measurements of the visitor economy are designed to inform policy decisions that foster the sector’s development.
To quantify the significance of Michigan’s visitor economy, Tourism Economics developed a comprehensive analysis of visitor spending and its total economic impact on businesses, employment, personal income, and taxes. At a high level, our approach includes the following stages:
• Compilation of visitor statistics
• Compilation of industry data
• Compilation of government data
• Analysis of visitor spending by category
• Economic impact modeling
In 2024, 131.2 million visitors spent $30.7 billion in the Michigan economy, generating a total economic impact of $54.8 billion.
The visitor economy is an economic pillar in Michigan. In 2024, visitor spending supported one-in-seventeen jobs in Michigan and offset resident taxes by $887 per household. In addition:
Visitors to Michigan spent $30.7 billion across various sectors in 2024.
Of the $30.7 billion spent, transportation purchases, including both ground and air, accounted for $7.7 billion 25% of all visitor spending.
Visitors spent 24.0%, $7.4 billion, of their budget on food and beverage.
In 2024, 131.2 million visitors traveled to Michigan, a 2.3% increase over the prior year. Overnight and international arrivals supported growth, increasing 2.4% and 13.6%, respectively.
Visitor spending increased 4.9% in 2024, a result of moderate demand growth coupled with price increases.
Driven by demand growth and higher room rates, in 2024, lodging led spending gains, increasing 6.2% year-over-year. Food and beverage spending growth followed, increasing 5.4% compared to the previous year.
In 2024, 55 million overnight visitors spent $24.2 billion, with an average per person spend of $440. Day spending increased to $6.5 billion, with visitors spending an average of $85 per person.
The visitor economy looks at a broader range of tourism-related expenditures. These include government support for tourism as well as capital investment (both new structures and machinery and equipment spending).
Led by domestic traveler spending at $29.0 billion, overall visitor economy spending in 2024 reached nearly $33.7 billion. Capital investment in support of tourism totaled $2.4 billion in 2024.
In Michigan, the international visitor market increased its share to 5.1% of tourism demand in 2024; up from 4.4% in 2023.
Capital investment in tourism-related construction and machinery & equipment represented 7.1% of all tourism-related demand.
Domestic visitor markets remained the largest category, providing 86.1% of demand in 2024.
The governmental support share was 0.4% of the Michigan visitor economy in 2024.
The development of visitor economy impact modeling begins with a comprehensive demand side analysis. Visitor survey data provides estimates on the volume of visitors by type and their spending in specific industries (e.g. lodging, restaurants, retail, recreation and entertainment, transportation). These estimates are strengthened through an analysis of industry-specific data sets on the lodging industry, aviation, and sectoral-level business sales. Government data, including taxes by type, as well as employment and personal income by industry, are used to supplement and confirm demand-side visitor spending calculations.
This provides a detailed profile of visitor spending by industry, which is then connected to a local input-output (I-O) economic impact model constructed within the IMPLAN platform. This uses government (Bureau of Economic Analysis and Census) data to trace the flow of visitors through the local economy and its effects on businesses, households, and government. The model quantifies three levels of impact:
1. Direct impacts: Visitor spending creates direct economic value within a defined set of sectors. This supports a proportion of spending, jobs, wages, and taxes within each sector.
2. Indirect impacts: Businesses providing direct services to visitors purchase goods and services, generating additional impacts called indirect impacts or supply-chain effects.
3. Induced impacts: Additional business activity is generated as employees spend incomes locally that are earned due to visitor activity. This is called the induced impact or income effect.
The model calculates these three levels of impact direct, indirect and induced for the following metrics:
Direct business sales, including visitor spending and TSA spending, tallied $33.7 billion in Michigan in 2024. These direct impacts generated an additional $21.1 billion through supply chain (indirect) and income (induced) effects.
As a result, the total economic impact of visitors reached $54.8 billion, 3.1% ahead of the prior year.
Michigan visitor economy GDP increased to $26.1 billion in 2024. This represented 3.7% of Michigan’s economy. GDP removes the value of all imported (from other states and internationally) goods and services.
Employment directly supported by visitor activity increased 2.2% in 2024, reaching 221,396 jobs. With the increase, the number of jobs directly supported by visitors remains about 10,000 jobs below pre-pandemic levels.
If direct visitor-supported employment was treated as a single industry, it would rank 10th in comparison to other comparably measured sectors, behind construction and finance.
Visitor activity sustained 230,973 direct jobs in 2024, with an additional 120,319 jobs supported from the indirect and induced impacts of visitor activity. Total employment impacts tallied 351,292 in 2024, translating to one-in-17 jobs in the state.
Visitor activity generated $8.6 billion in direct personal income in 2024. Including $6.9 billion in indirect and induced impacts, employees received $15.5 billion in personal income.
Visitor activity generated $7.2 billion in government revenues in 2024. State and local taxes alone tallied more than $3.6 billion. Each household in Michigan would need to be taxed an additional $887 to replace the visitor-generated taxes received by state and local governments in 2024.
Tourism-supported revenues to state government rose to $2.2 billion in 2024. The majority of state revenues are generated through sales taxes with income, corporate, and excise and fees from visitor activity, together adding $525 million to state coffers.
State revenues grew by $87.2 million with sales tax growth driving the increase.
Local tax revenues from visitor activity tallied $1.4 billion with property taxes, bed taxes, fees, and income taxes supporting local governmental revenues. Local revenues grew $57.3 million in 2024.
Measuring the visitor economy begins with a comprehensive demand side analysis. A visitor is defined as someone who stayed overnight or traveled more than 50 miles to the destination.
The study area is defined as the state of Michigan.
Visitor survey data provide estimates on the volume of visitors by type and their spending in specific categories (e.g. lodging, restaurants, retail, recreation and entertainment, transportation). These estimates are strengthened through an analysis of industry-specific data sets on the lodging industry, aviation, and sectoral-level business sales. Government data, including taxes by type as well as employment and personal income by industry are used to supplement and confirm demand-side visitor spending calculations.
The Tourism Satellite Account (TSA) which measures the tourism-related capital investments into the economy of the study area, are estimated through the analysis of industry-specific data sets on the construction industry, Census Capital Expenditure Survey data, BEA personal consumption expenditure data, and government data.
The primary source of the employment and wage data is the Regional Economic Information System (REIS), maintained by the Bureau of Economic Analysis (BEA). This is more comprehensive than Bureau of Labor Statistics (BLS QCEW) data because sole-proprietors do not require unemployment insurance and are not counted in the QCEW data.
The complete set of data inputs is provided below.
• Longwoods International: Consumer survey data, including spending and visitor profile characteristics
• STR: Lodging performance data, including room demand and revenue for hotels
• Michigan State Tax Collections: Sales tax receipts, by industry
• BEA/BLS: Employment, wage, and CPI data, by industry
• US Census: Business sales and employment by industry, seasonal second homes inventory, population, households, and median real estate taxes paid
• US Bureau of Transportation: Air passenger data for airports in Michigan
• Tourism Economics: International arrivals data for overseas, Canadian, and Mexican travel to Michigan
• Oxford Economics: Construction data, by industry, for Michigan
LODGING
FOOD & BEVERAGE
All accommodation businesses, including hotels, B&Bs, campgrounds, and short-term rentals. This includes food, entertainment, and other services provided by these establishments.
Includes all visitor spending on food & beverages, including at restaurants, bars, grocery stores and other food providers.
RECREATION Includes visitors spending within the arts, entertainment and recreation sector.
RETAIL
Includes visitor spending in all retail sub-sectors within the local economy, excluding grocery stores.
LOCAL TRANSPORT Ride share, taxis, limos, trains, rental cars, buses, and gasoline purchases.
AIR TRANSPORT Where applicable, the local share of air transportation spending.
SECOND HOMES
DIRECT IMPACT
INDIRECT IMPACT
INDUCED IMPACT
EMPLOYMENT
PERSONAL INCOME
Where applicable, spending associated with seasonal second homes for recreational use as defined by the Census Bureau.
Impacts (business sales, jobs, income, and taxes) related to businesses where visitors spend dollars (e.g. recreation, transportation, lodging).
Impacts created from the purchase of goods and services as inputs (e.g. food wholesalers, utilities, business services) into production by the directly affected sectors (i.e. business-to-business purchases).
Impacts created from spending in the local economy by employees whose wages are generated either directly or indirectly by visitor activity.
Employment is measured by the Bureau of Economic Analysis (BEA) definition, and captures full-time and part-time jobs, which includes salary and wage employees and proprietors.
Income (wages, salaries, proprietor income and benefits) supported by visitor spending.
VALUE ADDED (GDP) Business sales net of intermediate (supply chain) purchases.
LOCAL TAXES
STATE TAXES
City and County taxes generated by visitor spending. Includes any local sales, income, bed, usage fees, licenses and other revenue streams to local governmental authorities.
State tax revenues generated by visitor spending. Includes sales, income, corporate, usage fees and other assessments of state governments.
This study was conducted by the Tourism Economics group within Oxford Economics. Tourism Economics combines an understanding of traveler dynamics with rigorous economics to answer the most important questions facing destinations, investors, and strategic planners. By combining quantitative methods with industry knowledge, Tourism Economics designs custom market strategies, destination recovery plans, forecasting models, policy analysis, and economic impact studies.
Oxford Economics was founded in 1981 as a commercial venture with Oxford University’s business college to provide economic forecasting and modeling to UK companies and financial institutions expanding abroad. Since then, we have become one of the world’s foremost independent global advisory firms, providing reports, forecasts and analytical tools on 200 countries, 100 industrial sectors and over 3,000 cities. Our best-of-class global economic and industry models and analytical tools give us an unparalleled ability to forecast external market trends and assess their economic, social and business impact.
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