“Summer takes care of itself.”

For years, that’s been Trevor Tkach’s stance on tourism promotion for northern Michigan’s most popular season. As president and CEO of Traverse City Tourism (TCT), Tkach is responsible for promoting the region as a destination – and for helping fill the rooms of member hotels, which pay an assessment that funds TCT. Since taking the helm in 2016, Tkach has focused most of his marketing efforts on Traverse City’s other seasons, believing that northern Michigan’s blue waters, beaches, wineries, and parks would speak for themselves in attracting summer traffic.

Now, in the aftermath of a mixed-bag summer, Tkach sees things a little differently.

“We ended up having to shift our thinking this summer, for multiple reasons,” Tkach says. “I’d say we put more emphasis on promoting summer this year than we’ve had to do in many years.”

The change  came amidst a tourism season that Tkach says merits a B-minus letter grade – an unusually downbeat assessment coming from the typically optimistic TCT president. 

“The fourth quarter of ‘23 rolling into the first quarter of ‘24 wasn't fabulous [for tourism],” Tkach tells The Ticker. “Between inflation and interest rates, consumer confidence was low. People weren't spending as much on travel. And this was a national issue; it wasn’t unique to the Traverse City area.”

Sluggish tourism trends carried over to summer. Tkach says Michigan “was pretty flat, as it relates to travel demand,” seeing little to no growth compared to last year. “And Traverse City was probably a little bit down, frankly.”

Tkach attributes the dip to a few different issues.

Data shows tourists are definitely being more frugal. Last year, Tkach says, 83 percent of July visitors stayed in-market overnight. This year, that number slipped to 78.5 percent, with day-trippers representing a larger share of TC travelers. Average length of stay has also lagged behind 2023 numbers for each month so far this year.

“So, we’re still getting the visitors, but we’re not getting them for as long,” Tkach says. “And that doesn’t just mean visitors aren’t spending money at local hotels; they’re also not spending as much money in market, in general. So, that has hurt us.”

And the Pure Michigan campaign – which markets Michigan travel experiences to prospective visitors around the world – had significantly less funding this year.

“That spring/summer national campaign with Pure Michigan is typically the kickoff for our branding for the year,” Tkach says. “It helps push spring, it helps roll us into summer, and it has allowed us to take a step back from initiatives to market the area in the summer. This year, not having that, we did have to focus a bit more on promoting summer than we have in a while.”

The other big challenge, Tkach says, is inventory. A report from Smith Travel Research (STR) indicates that occupancy rates were down 2.6 percent year-over-year from January through July across TCT’s membership territory, including a 2 percent dip in June and a 0.5 percent dip in July. At the same time, though, Tkach notes that inventory across TCT’s membership increased 1.7 percent for the same period, thanks to new properties – like the Avid hotel in East Bay Township – coming online. Tkach expects occupancy rates will continue to slip as more new hotels open, at least until inflation calms down and national travel trends rebound.

“It’s hard to figure out where the ceiling is and when you’re going to hit it,” Tkach says, when asked whether developers are overbuilding northern Michigan’s hotel stock. “When you see destinations get strategic with total lodging inventory, it’s typically correlated with an event venue – a conference center, or a sports complex, or something where they can say, ‘OK, if we can host 5,000 people for an event here, then we need to have 5,000 rooms to cover that demand.’ We don’t have anything quite like that here."

There’s also the short-term rental (STR) factor. Based on data from AirDNA, an analytics service TCT uses to monitor local STR activity, STR supply in the Traverse City area increased 13.4 percent between July 2023 and July 2024. Demand for STRs also jumped, by 9.1 percent. Tkach estimates Grand Traverse County now has “more than 2,300 STRs available at any given time, which is probably about 50 percent of the total hotel inventory we have in the county.”

In other words, even if hotel occupancy is down, northern Michigan still had a mighty busy tourism season. Just ask the team at Traverse City Horse Shows (TCHS), which is wrapping up its biggest season yet.

“Although the final numbers aren’t in yet, we’re already seeing significant growth,” says TCHS Marketing/PR Director Gary Howe. “For spectators, we expanded our premium ticket offerings, adding more box seats due to high demand and introducing ‘The Overlook,’ an elevated experience with premium views and a complimentary bar. With our final two weeks approaching, we’re on pace for a 35 percent increase in ticket sales.”

Beyond spectators, Howe says more than 5,000 horses will have come through Flintfields Horse Park this year by the time TCHS wraps its 2024 season on September 22, “representing at least 3-5 people per horse.”