Rising Fuel Prices and Economic Uncertainty to Dampen July 4th Holiday Travel, AAA says

However, the 37.1 million Americans who do take a trip will

find bargains and lower airfares.

NEWS from AAA South Dakota, June 24 – AAA today projected the number of Americans traveling on vacation this Fourth of July holiday weekend will decrease 1.9 percent from 2008 with approximately 37.1 million travelers taking a trip of 50 or more miles away from home. Last year, 37.8 million Americans traveled during the same period, a 10.5 percent decline from the 42.3 million travelers who vacationed in 2007. The July 4th holiday is typically the busiest time of year for auto travel since nearly all school-aged children don’t have class and families are more likely to take a vacation.

AAA said the projected slight decline in leisure travel is mainly due to ongoing uncertainty about the strength of the economy; especially rising joblessness and sagging personal incomes. The recent rise in gasoline prices may also be causing some travelers to limit or abbreviate their holiday plans, although its impact on overall vacation costs remains minimal, AAA said. 

“Many Americans remain cautious about the outlook for their personal finances and these attitudes are reflected in the slight decline in travel we are forecasting for the upcoming holiday weekend," said Mark Madeja, spokesman for AAA South Dakota. "Those who do vacation this summer will find plenty of attractive discounts and special offers resulting in some outstanding vacation values. If you can afford to go, this summer is a smart time to travel."

Air travel to increase, while auto travel dips

Although air travel will account for only a small percentage of total July 4th leisure travel, the industry is expected to see a 4.9 percent increase in leisure travel bookings nationwide this holiday due to declining airfares and pent up demand from those who have not taken a vacation trip by air in some time. Two million person trips are expected by air across the country. Last July 4th, air travel declined steeply, so this year’s rebound is significant.

About 3,127 South Dakotans will be traveling by air this holiday, AAA says, a 5.9 percent boost over year-ago figures.

Although fuel prices remain much lower than they were one year ago, the relatively steep price increase since May will dampen consumer enthusiasm for road trips. AAA projects a 2.6 percent

decline in auto trips in the U.S. from 33.4 million last year to 32.6 million in 2009. More attractive airfares also will contribute to the decline in auto travel.

Fewer South Dakotans will be getting there by motor vehicle this year compared to July 4, 2008. AAA projects 87,618 South Dakotans will drive 50 or miles from home over the holiday, down four percent from last year.

Today’s AAA Fuel Gauge Report (fuelgaugereport.com) shows the national average for self-serve regular gasoline now at $2.676 per gallon, an increase of $1.05 since the first of the year but still $1.39 below the average a year ago.

The South Dakota statewide gasoline price average stands at $2.691 today, up $1.06 since Jan. 1, 2009 and $1.31 lower than the year-ago figure.

Trips by other/multi modes, including air/auto combinations, rail, buses and watercraft, will be the dominant means of travel used by an estimated 2.5 million Americans. This number includes 5,473 South Dakotans, which represents nearly a six percent increase over Independence Day, 2008.

Average U.S. spending will be $1,160 and average distance traveled will be 614 miles

 Fourth of July travelers across the nation will log an average of 614 miles roundtrip the upcoming holiday weekend. More than one-third of all travelers (38 percent) will stay relatively close to home, with expected round trips of under 250 miles. One-third of weekend travelers will log between 250 and 700 miles. And 28 percent will travel more than 700 miles round trip.

South Dakota travelers will be putting fewer miles on their vehicles than the national average with an average roundtrip of 578 miles. New Englanders will stay closest to home with an average roundtrip distance of only 414 miles. 

Besides visiting friends/family and dining, South Dakotans’ number one activity over the Fourth will be shopping (46 percent say they’ll be doing this), followed by boating (31 percent), fishing (22 percent), visiting historic sites (18 percent) and visiting national or state parks (14 percent).

Airfare and lodging costs will be lower

According to AAA’s Leisure Travel Index – a monitor of pricing in 20 popular cities across the U.S. for hotel and car rentals, as well as 40 pairs of cities for air travel pricing – the lowest average published airfares over the July 4th holiday weekend are expected to decrease 16 percent from last year as air passengers will pay as little as $169. From February through June of this year, the lowest fares have been less than during the same time frame in 2008.

Car rental rates are up slightly with consumers paying an average of $51 per day compared to $49 a year ago, an increase of five percent.

Hotel rates for AAA Three Diamond-rated and Two Diamond-rated lodgings are expected to be 12 percent less than last year with travelers spending an average of $137 per night for Three Diamond-rated properties. Travelers planning to stay at AAA Two Diamond-rated hotels will pay an average of $101 per night.  

Holiday Forecast Approach

In cooperation with AAA, IHS Global Insight has developed a unique approach to forecasting actual travel that explicitly considers current economic conditions, past July 4th holiday travel trends and behavior, and the recent assessment of pre-holiday American travel intentions derived from a survey of 2,700 American households.

The intentions figures act as a leading indicator, but do not constitute the forecast itself. Instead, travel intentions overlay other key travel drivers along with past trends in an effort to project what Americans will actually do. The approach recognizes that Americans do not always behave as they say they will.

The actual travel figures come from the ongoing travel panel database of D.K. Shifflet & Associates, the premier source of American travel volume and behavior. DKSA interviews more than 50,000 American households per month in an effort to track trip incidence, composition, behavior, and spending … all after the trips have been taken.

Regional holiday trip forecasts are strongly influenced by the economic conditions that exist in each market. The pain associated with current economic conditions is of course not evenly distributed throughout the country. Relative strength in the Mountain region (ID, MT, WY, NV, UT, CO, AZ and NM) for example, is reflected in expectations for higher than average Independence Day weekend travel. It will be quite the opposite for the New England and East South Central regions.

AAA has been reporting on holiday travel trends for more than two decades. The complete AAA / IHS Global Insight 2009 July 4th holiday forecast can be found at AAA.com/news.

As North America’s largest motoring and leisure travel organization, AAA provides more than 51 million members (88,000 in South Dakota) with travel, insurance, financial and automotive-related services. Since its founding in 1902, the not-for-profit, fully tax-paying AAA has been a leader and advocate for the safety and security of all travelers. AAA South Dakota can be visited on the Internet at AAA.com.