LANSING, MI — Small hotels in Michigan are paying an estimated $10 million a year into mandatory tourism-marketing assessments, according to a new study from the Private Property Rights Institute.
The report says the money is collected through local Convention and Visitors Bureaus and is meant to promote travel and boost hotel bookings. But the institute argues that independent lodging owners receive few direct benefits while larger hotel chains, including out-of-state brands, have more influence over how the money is used.
The study adds that the fees can make travel more expensive and place extra pressure on small operators already dealing with inflation and rising operating costs.
How the Convention and Visitors Bureau assessments work
Under the system described in the study, lodging businesses pay mandatory assessments to local tourism bureaus that use the revenue for advertising and promotional campaigns. Those campaigns are designed to draw visitors to Michigan and support overnight stays.
The institute said the charge can be as much as 5% of a guest’s room bill. That makes the assessments more than a behind-the-scenes business expense; they can also affect what travelers ultimately pay at checkout.
Because the fees are mandatory, the study argues that small hotel owners are not simply choosing whether to participate in a marketing program. Instead, they are required to help finance it whether or not they feel the spending helps their own property.
Independent owners say they have little control over the money
Charlie Kolean, president of the Private Property Rights Institute, said the current structure gives small lodging businesses too little say in how the assessments are managed. He said lawmakers should revise the statutes that authorize the fees.
Among the changes he wants are opt-out rights for individual properties, more balanced board representation, greater transparency in spending and executive pay, and regular renewal votes before assessments can continue.
Kolean said many family-owned hotels are being forced to support marketing and lobbying efforts that favor larger competitors. In his view, that leaves small operators subsidizing businesses with much deeper resources and broader market reach.
At least 47 bureaus do not allow hotels to opt out
The study says Michigan lodging businesses cannot opt out of the mandatory fees for at least 47 local tourism bureaus. It also says very few small operators get a seat on bureau boards, even though they contribute to the assessments.
That imbalance, the institute argues, means smaller lodging owners help fund the system but have limited influence over the decisions that shape it. Kolean described that arrangement as a form of corporate welfare.
He said family-owned hotels should not be required to subsidize hotel conglomerates, especially when the smaller businesses are already under strain from inflation and higher operating expenses.
Tourism remains a major part of Michigan’s economy
The study comes against the backdrop of a large tourism industry in Michigan. In 2024, tourism generated an estimated $54.8 billion in economic impact and drew 131.2 million visitors to the state, according to the institute.
Those figures are part of why tourism marketing has become such a significant issue for lodging businesses and local communities. Supporters of the assessments see them as a tool for keeping Michigan visible to travelers and helping fill hotel rooms.
But the report says the benefits do not always reach the smallest businesses evenly, especially when the money is controlled by larger players or organizations with broader commercial interests.
The report calls for more transparency and limits on spending
Beyond opt-out rights and board changes, the study urges lawmakers to add more transparency to bureau books and meetings, limit administrative costs, and prevent assessment revenue from being used without tighter oversight.
Kolean said such reforms could help lower lodging costs and make it easier for small hotels to stay in business. He also questioned how quickly state lawmakers would be willing to act.
He said change will depend on whether legislators are prepared to confront a system that has operated with little scrutiny for decades. The organizations that benefit from the current arrangement, he added, are likely to resist reform.
