Bayview Mackinac Race contributed $25 million to Michigan’s economy this summer


DETROIT, MI, Oct. 21, 2010 – The 86th annual “Pure Michigan Bayview Mackinac Race” of 206 sailboats from Port Huron to Mackinac Island generated an estimated economic impact of $25 million to Michigan’s economy this past summer, according to an independent study released today.

“The estimated economic value of the Bayview Mackinac for 2010 was $25 million and Bayview hosted an additional 15 regattas that drew participants from around the world to the Detroit area also contributing greatly to the economy, said noted economist David Littmann, who conducted the study based on actual results from this year’s events.

The 2010 study was conducted during  the summer season and was based on information provided by the City of Port Huron, Mackinac Island Chamber of Commerce and Michigan officials. In 2009 Littmann conducted a study of the Bayview Mackinac race and estimated its economic impact at a minimum of $30.4 million with a high of $50 million. The initial study was an estimate conducted prior to the race and economic projection models.

“All told the race contributed an estimated $25 million to participating regional economies in 2010,” Littmann wrote. “This is approximately $5.4 million below 2009’s estimated investment and consumer spending total of $30.4 million.  Littmann said Port Huron had a very positive impact from this year’s race while Mackinac Island’s revenues were off due to fewer participants and tourists to the area given the overall economic climate.

The greater Port Huron area has 160 cafes, restaurants and bars and hosted the Blue Water Festival, which drew more than 100,000 people to the area for the start of the Bayview Mackinac Race, which set sail on July 17, 2010. All of Port Huron’s hotels were sold out for three nights and area establishments sold more than 70,000 glasses of beer during the Blue Water Festival.

Littmann’s study noted that Mackinac Island has some 40 bars and restaurants. The Mackinac Island Convention Bureau reported a 20 percent decline in occupancy rates this summer with the island’s1,500 room capacity. Littmann was formerly chief economist for Comerica Bank and is currently a consultant to the Mackinac Center for Public Policy.

Littmann, who served as Comerica Bank’s Chief Economist for 30 years before joining the Mackinac Center for Public Policy and service as an independent economist, added that the weather impact is related to people actually getting out to attend race related events. He noted the fact that the longevity of the race has also created a loyal fan following that comes to Michigan every year to be a part of the race. This year the 80-foot sailboat Beau Geste owned by businessman Karl Kwok came all the way from Hong Kong to participate in the Bayview and Chicago to Mackinac Island races.

“Because of its unbroken, never canceled track record of 86 consecutive races, the Pure Michigan Bayview race from Port Huron-to-Mackinac Island has indisputably catapulted Michigan and its sailors into the most prestigious international sail boat racing circles,” said Littmann.

“We initiated the study to quantify the general impact of the race,” said Bayview Yacht Club Commodore Bruce J. Burton. “We believe it is important given today’s challenging economy to demonstrate the value this premier sailing event has on our state.”

The Michigan Economic Development Corporation Travel Bureau “Pure Michigan” campaign was the title sponsor of the race for the second consecutive year. Also for the second year Bayview placed Global Positioning System (GPS) transponders on each boat for fans to follow the race. Some 4.4 million web page views of the tracking page were recorded during the race.   In 2009, the site recorded some 1 million page views during the same period.

“We always suspected the race had a substantial impact on Michigan’s economy given the fact we draw people from 20 states and several countries to participate, and sail and vacation in Michigan,” said Burton. “This second year study shows a tremendous economic impact on the state and Pure Michigan has tangible proof of its return on investment as our title sponsor.”

“The race is a perfect fit with our highly successful Pure Michigan national advertising campaign,” said Travel Michigan Vice President George Zimmermann. “The campaign is designed to introduce the nation to the attributes that make Michigan such a popular and unique destination. In addition to this strong economic impact, this sailing race helps draw attention to the exceptional beauty of Michigan’s waterways and 3,200 miles of fresh water shoreline.”

The Bayview economic impact study factored in initial spend and residual economic impacts associated with the race including direct outlays encompassing:

  • Room nights: During the weekend of the race, all 1,000 hotel-motel rooms in the Greater Port Huron area are booked, including the 149 rooms at the Thomas Edison Inn. Similarly, in anticipation of the race’s wrap-up at Mission Point, the approximately 1,500 rooms available on Mackinac Island are also taken during the race but down about 20 percent for the season. Many sailors also participate in the Harbor Springs regattas after the Mackinac Race.
  • Food & Beverage: For many days, the 40 restaurants and bars on Mackinac Island are generally full. A similar phenomenon occurs in Port Huron, the race’s origin.
  • Private Parties, Parades, & Social Events: It is reasonable to assume that most racing fans will be attending at least one major celebration or family event during the week of the race.
  • Souvenirs and Awards: Added to the annual protocol of award ceremonies or commemorative trophies for the finishing crews, most attendees will find ample time and inducements for gift and memorabilia shopping. They’ll purchase numerous items, such as volunteer t-shirts, hats, skipper bags, banners, flags and other products.
  • Boat Prepping & Take Down: The average outlay per boat for safety gear alone is nearly $10,000. Moreover, there are significant expenditures attendant to the launch and return or storage of the fleet, which normally incorporates 200-plus vessels.
  • Advertising & Media Value: For the second time in the 86-year history of the Bayview Mackinac race, fans had access to GPS tracking (a global positioning system) with which to follow the racing entrants. TV and radio coverage value was estimated at $500,000. More than 100 journalists from at least six nations – including photographers and videographers – cover the regatta and events for newspapers, magazines, websites, cable, wire services, radio, TV, blogs and special interest publications. Race stories were released over the internet and news services for use in 46 North American and 100 foreign sailing and boating publications.
  • Fuel, Fees, Miscellaneous: For many families, the race is a prelude to trips they usually take to cabins or parks between Michigan’s Thumb and Upper Peninsula.Thus, some part of the fuel and other travel expenditures, albeit minor, reflects a spin-off of the regatta.

“Also included in the total economic impact of the race are indirect outlays,” said Littmann. “Outlays are indirect when induced by the first wave of spending. For example, individuals in a hot dog or ice cream concession booth will re-spend portions of the income received from the first round of purchases. In turn, that re-spending cycle kicks off additional, though smaller, waves of spending.”

“The accumulated spending within the state of Michigan (including taxes collected on all retail outlays) is tantamount to a multiplier value of two. In other words, when all spending attributable to the Pure Michigan Bayview Mackinac Race is tallied, the total is double the initial outlays touched off by the race itself,” Littmann wrote.