Noah’s Ark Charters in Copper Harbor is ready for summertime in Michigan, or, as its co-owner, Noah Jukuri, suggested, as ready as it’s going to be when the season starts Memorial Day weekend, and tourists want to visit the local lighthouse accessible only by watercraft.
What the Yooper tour boat captain doesn’t know for sure is how many visitors will show up, given the surge in gas prices, unseasonably cold weather and terrible spring flooding throughout Michigan after so much rain and snowmelt that wrecked homes, bridges and roadways.
“Copper Harbor has built a community who make it a point to go there every year,” Jukuri said Thursday, May 14, optimistic that economic worries won’t keep folks from returning to one of their favorite Upper Peninsula spots. “I feel like gas prices might not necessarily slow them down.”
“Might,” however, is the key word.
The state tourism industry is hoping that hundreds of thousands of folks will head Up North, from Cadillac to Copper Harbor — as the lyrics in Kid Rock’s popular “All Summer Long” song suggest — to enjoy the “simple things in life.”
But unlike in the nostalgic lyrics, it’s not 1989 anymore — and, for many people, the world has gotten a lot more complicated.
So as much as the travel industry, including the 20-year-old Pure Michigan campaign, wants to talk about Michigan’s bounty of beautiful places and blue sky as the summer season approaches, worries about gas prices are, as one Up North columnist suggested, clouding the outlook.
Will the tourists still flock to Michigan communities during the summer months, which this year includes the 250th anniversary of America? Or will high gas prices and economic uncertainty scare them off?
Gas prices cast uncertainty over Michigan’s tourism season
Beyond the tourism industry’s bravado is the worry that if tourists don’t show up, billions of dollars in economic impact, tax dollars, as well as hundreds of thousands of jobs, could be at risk.
At some gas stations in Michigan, regular unleaded fuel prices have already topped $5 a gallon and could, petroleum analysts have said, go even higher, depending on how the war with Iran goes and whether the Strait of Hormuz in the Middle East remains closed.
At office watercoolers and on social media, folks constantly seem to be trying to one-up each other about how much it costs to fill their gas tanks: about $70 for a 15-gallon tank, and even more for the trucks towing trailers and RVs.
And a recent national survey found that the economy is definitely on people’s minds. More than half of those asked, 55%, said they expected the upcoming summer to be the most financially stressful that they could remember, and as a result of high gas and airline ticket prices, 45% were planning to cancel travel plans.
Yet the forecasts for Memorial Day weekend, the traditional start of summer, show all that stress also may be increasing the desire for Michiganders to momentarily escape the hustle and bustle of daily life and bad news.
More than 1.3 million people are planning to travel, a near record, according to AAA. And of those, most — about 1.2 million — will drive to their destination, which the auto club suggested, may mean many are willing to tolerate the higher fuel prices.
Why summer tourism matters to Michigan’s economy
AAA’s forecast gives small business owners like Jukuri, who lives in Calumet, about 30 minutes away from Copper Harbor, confidence that the summer will be profitable.
He also has been thinking about 2022, when, right after the pandemic, he was worried. By June of that year, the average price of gas in Michigan reached a record high, topping $5 a gallon, and yet people continued to travel there, and his business thrived.
Still, the higher fuel prices now, the boat captain acknowledged, will cut into his profits, but he still doesn’t plan to recoup that loss by raising what he charges his customers, $39 for each adult to see the lighthouse.
He explained: His charter boat company, after all, is the only way for visitors to reach historic Copper Harbor Light without trespassing across private property. The 1848 lighthouse is at the tip of Keweenaw Peninsula, which juts into Lake Superior.
Others in the travel industry are even more hopeful.
Trevor Tkach, the president and CEO of the Traverse City Tourism, told the Free Press he’s “extremely optimistic” about it, which he said he believes will be “driven by nostalgia” and milestone anniversaries, including the 100th anniversary of the National Cherry Festival.
“Travel in Michigan is going to be very high,” the festival’s former executive director said. “People are going to want to get out to state parks, national parks, and travel in the United States is going to be very, very positive.”
Tourism is vital to Traverse City. On the shores of Grand Traverse Bay, the city is about 250 miles northwest of Detroit and 320 miles north of Chicago. It offers hotels and resorts, is near wineries and both state and national parks.
The Sleeping Bear Dunes National Lakeshore, for instance, with sand so pure that it was recognized this year by TripAdvisor as “one of the top beaches in the world,” with the online travel platform ranking it as No. 4 in the world.
Will travelers cut spending even if they still come?
Tkach isn’t worried that tourists won’t come, in part, because the travel business — especially now — can be resilient. And people who can afford to travel are going to, he said, because they value the experience.
And no matter how hard times get, it’s also hard for people to resist the nostalgia of going back to places that remind us of happy times and offer a chance for a reset in nature when we need it most.
That national survey — taken in late April and early May of about 1,000 adults by Credit Karma, an online platform that helps people track their credit scores — seemed to support that idea, too, finding that many, especially folks under 30, were unwilling to scale back.
While rising gas prices and airfares led some to cancel their summer travel plans, nearly half, 47%, of Gen Zers said they didn’t plan to change their plans even if they couldn’t afford them. And nearly a third, 31%, said they even expected to take on debt — $1,000-$3,000 — this summer.
Tkach, however, said his concern isn’t that people will quit going places. His worry: How much less will they spend once they arrive at their destination?
Visitors, in his view, are going to “get to where they want to be,” but once they arrive, they may try to make up for the increased costs of getting there by spending less at eateries, attractions and shops.
In other words, he believes Michiganders will continue to travel to that destination that holds a special place in their hearts, but they may try to save money in other ways, as AAA warned in its forecast, “shorten trips, delay plans or stay closer to home.”
Tkach wouldn’t venture a guess at how much that could be.
But he did acknowledge that despite his confidence in the upcoming season, when it comes to his own family — with two kids in college, one of which is studying abroad, and a third in high school — even he is wondering whether it is a good time to scale back.
Economic anxiety hits tourism communities
For some, the excitement of the start of summer has turned to unease.
Or as Ken Grabowski, a retired journalist who still writes columns for Manistee News Advocate, put it: “Yes, we all like to take vacations, but when tight finances force cuts, it is usually the trip that gets scaled back.”
Grabowski wrote that his columns are usually “positive and upbeat” because he loves “living in this area” and always wants “to see my friends and neighbors in the tourist business succeed.” But, this year, he added, “like many others, the ‘uncertainty’ of the times” is making him “nervous.”
He has good reason to be anxious.
Manistee, Grabowski pointed out, is a place many people throughout Michigan travel to annually to enjoy “our little piece of paradise on the shores of Lake Michigan to swim, camp, hike, bike, golf, fish and take in the natural beauty.” And there are many more communities throughout Michigan like Manistee.
In 2024, the latest figures available from Pure Michigan, more than 131 million visitors spent nearly $31 billion in Michigan, generating an economic impact of nearly $55 billion.
Tourism supported 351,300 jobs — and generated more than $3.5 billion in state and local taxes. And there has already been talk this year at the state and local levels of temporarily pausing gas taxes to help give people a break.
How much less can the government afford to collect?
Is the middle‑class road trip in decline?
It’s possible some Michigan destinations could benefit from higher gas prices, if people decide to gas up their cars and RVs and instead of driving or flying across the country, heading to communities like Manistee, Traverse City and even Copper Harbor.
That might offset losses from folks opting not to travel at all. But that scenario could also turn out to be more wishful than realistic.
William Stern, the CEO of Cardiff, a financial services company in California that loans money to small businesses, said he’s already seeing some of the effects of higher gas prices as his customers take out loans to continue to operate or adjust their strategies.
Businesses, Stern told the Free Press, are increasingly concerned that they “can’t rely on retail foot traffic” anymore because “the middle class is funding basic groceries on credit.” Instead, they are trying different strategies, like catering to higher-income customers and other businesses.
“They’re fighting for corporate contracts just to guarantee survival cash flow,” he added. And that’s a strategy that might work for some businesses, because “local vendors can’t wait around for a broke consumer to walk through the door.”
In Stern’s view, the “middle-class road trip is completely dead.”
It probably isn’t completely dead.
Even Secretary of Transportation Sean Duffy is promoting road trips in connection with the nation’s 250th anniversary with a reality-TV inspired show, “The Great American Road Trip.” The show, set to air on YouTube in June, features Duffy — who in his 20s was on MTV’s “The Real World” — and his family driving to the Grand Canyon and other places.
Duffy’s recent family road trips were backed with big money from big companies.
What may be more accurate to conclude about middle-class road trips this summer, however, is that they won’t be like they were in 1989 — or perhaps even last year. Tkach in Traverse City suggested the road trip isn’t dead; it is just down.
In addition, increased gasoline prices are revealing what some economists are calling a “K-shaped” economy, in which higher and lower-income households are affected differently.
How a K‑shaped economy affects Michigan tourism
Higher fuel prices are increasingly putting pressure on lower-income households, the lower half of the K, which are devoting more of their paychecks to getting around town, and on the economy, according to a Federal Reserve Bank of New York report.
Surging prices aren’t affecting higher-income earners, the K’s top half, as much.
And while the bank report found that what’s happening with the steep rise in gas prices now is somewhat of a rerun to what happened in 2022, when Russia invaded Ukraine, it also warned that the gap in consumption trends faced by income levels is “quantitatively larger.”
That could be a challenge in a place like Petoskey, which aims to appeal to both affluent travelers, who might own a seasonal cottage and be a member of the local private country club, as well as those who save all winter for their summer vacation.
“We’re still pretty positive and bullish about how summer is looking,” Jim Powell, the director of the Petoskey Area Visitors Bureau, told the Free Press, although he acknowledged that it’s a hard thing to predict. Local businesses, he said, are expecting summer visitors to return.
Still, the impacts of higher gas prices likely will still be felt.
And the K-shaped economy means, for instance, the private Petoskey-Bay View Country Club isn’t concerned about its 450 members — which hail from around the state, and even from other parts of the Midwest, the East Coast and Florida — not showing up this summer.
The club is concerned about whether its seasonal employees will.
The workers, club president Matt Seelye said, are paying more at the pump, and that’s something that the club will consider. He promised the club would do its best “to take care of them so that they can come to work and make money.”
On top of the impact of higher fuel costs, tourist destinations like Cadillac, in Wexford County, which were also hit this spring with flooding, may be counting on the summer months to help residents and businesses recover from the damage.
The flooding also swamped some campgrounds, which were expected to reopen by Memorial Day. However, some campsites — like those at Mitchell State Park in Cadillac — might still be underwater and remain closed.
Rebecca Hall, who runs the family-owned, waterfront restaurant Lakeside Charlies with her husband and in-laws, said the upcoming holiday — and summer — is “always busy for us.”
The eatery on Lake Mitchell in Cadillac, near the state park, offers dine-in and dockside service for boaters, and while the restaurant wasn’t damaged in the flooding, Hall said, its parking lot was — for a few days — under water.
“With gas prices high,” she said, Lakeside Charlie’s sales may be “a little bit down.” But she added that she didn’t anticipate so few diners that it would become a big problem.
Could the economy become a big problem if gas prices continue to rise?
“Well,” she said, avoiding a direct answer to the hypothetical question that the entire travel industry is facing. “Let’s pray and cross our fingers and hope to God that they start going down.”
Contact Frank Witsil: 313-222-5022 or fwitsil@freepress.com
This article originally appeared on Detroit Free Press: Michigan’s high gas prices, economic uncertainty raise summer tourism concerns
Reporting by Frank Witsil, Detroit Free Press / Detroit Free Press
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