To: Members of the Michigan Senate

From: Steve Yencich, President
Michigan Hotel, Motel & Resort Association

Re: HB 6606

Date: 12/6/06

We understand that momentum is building to amend HB 6606 to include an expanded number of destinations and areas of the state. This is to respectfully inform you that MHMRA strongly opposes any such amendments to this bill for a variety of compelling reasons.

The Kent County CVB went through a very careful and deliberative process in seeking introduction and passage of this bill. They were careful to check with affected parties to enable all concerned to carefully judge both the direct impact and, perhaps more importantly, the potential unintended consequences of this legislation. Unfortunately, no such effort, or opportunity has been afforded to affected parties should this bill be amended.

Kent County and Detroit are one of two state destinations that can conceivably draw national conventions to their areas. It was in that context that MHMRA gritted its teeth and agreed not to oppose this bill as it would uniquely affect only Kent County, and to a great measure, the out-of-state business it now seeks to attract.

However, 70% of Michigan tourism is generated by in-state residents. A recent study by the Traverse City CVB found that an incredible 80% of tourists visiting their area come from Michigan residents. We’re certain the percentages are roughly the same for Lansing, Marquette, and Kalamazoo as well as other state destinations. Consequently, any expansion of HB 6606 represents a direct tax increase, the preponderance of which is directly borne by Michigan residents.

Given the fragile nature of the highly discretionary behavior we know as “tourism” such a tax increase would represent poor public policy. We remind you that Michigan’s hotel occupancy levels finished dead last for 2005. Increasing taxes on hotel guests is ill-advised at any time; especially so given our status as 50th in occupancy nationwide and in view of current state economic conditions.

For these reasons we respectfully ask that you oppose any amendments to HB 6606. We deeply appreciate your consideration of these concerns and look forward to joining with you to further strengthen the important contributions tourism makes to our state’s economy.

Thank you.