Fewer to Travel over Labor Day, AAA Predicts

Airfares are up 13 percent and for the first time this year, the number
of holiday air travelers is expected to decline.

Wednesday, August 24, 2011 – For Immediate Release – AAA forecasts 31.5 million Americans will travel 50 miles or more from home during the Labor Day holiday weekend, a 2.4 percent decrease from the 32.3 million people who traveled one year ago.

The number of South Dakotans traveling over the holiday is also expected to decline, AAA says, with 66,762 taking a trip by auto or by air, a dip of two and a half percent from Labor Day, 2010. The Labor Day holiday travel period is defined as Thursday, Sept. 1 to Monday, Sept. 5.

“AAA is projecting a decrease in the number of Labor Day travelers as many would-be travelers nationwide and here in South Dakota tell us uncertainty in the nation’s economy and increasing air fares have them re-thinking their holiday travel plans,” said Mark Madeja, spokesman for AAA South Dakota.

The decrease in expected travelers is a result of a mixed economic outlook including recent downturns in economic factors that affect discretionary spending. Real disposal income is up just 1.3 percent, which is being offset by the travel price index rising 6.7 percent since last year, due primarily to rising transportation costs. The housing market remains depressed, with new and existing home prices down 2.4 percent and 3.4 percent, respectively.      

AAA’s projections are based on economic forecasting and research by IHS Global Insight. The Boston-based economic research and consulting firm teamed with AAA in 2009 to jointly analyze travel trends during the major holidays. AAA has been reporting on holiday travel trends for more than two decades. The complete AAA / IHS Global Insight 2011 Labor Day Holiday Travel Forecast can be found at AAA.com/news.

Automobile travel up slightly, share of total holiday travelers increases
Nationwide, approximately 27.3 million people (87 percent of holiday travelers) plan to take to the nation’s roadways this Labor Day holiday weekend. This is a slight increase of 0.5 percent from the 27.2 million Labor Day 2010 auto travelers, and a three percent increase in the share of total holiday travelers from last year’s 84 percent. Automobile travel remains the dominant mode of holiday transportation.

Number of air travelers expected to decrease
Almost 2.5 million leisure travelers (eight percent of holiday travelers) will fly during the Labor Day holiday weekend, a 1.9 percent decrease from 2010. Rising fuel costs, combined with steady air travel demand, have resulted in rising airfares over the past few months. According to AAA’s Leisure Travel Index, Labor Day airfares are expected to be 13 percent higher than last year with an average lowest round-trip rate of $202 for the top 40 U.S. air routes. Increasing airfares and fees are factors contributing to the decline in air travel, the first expected decline for a major travel holiday in 2011 as forecast by AAA. 

Travel by other modes of transportation expected to decrease dramatically
Other modes of travel (trains, watercraft, multi-modal travel) will make up the remaining five percent of total person-trips (1.7 million travelers), down from the 2010 share of eight percent, but well above the four percent seen in 2009. Travel via these modes is extremely volatile from year to year, with 2011’s 34 percent decline in expected travelers falling well within historical averages. These modes are more sensitive to changes in disposable income as well as the travelers’ confidence in the economy and their finances. Consumer confidence in the economy has been trending down in recent months.

Travelers to experience increases in hotel rates, car rental rates decrease
Hotel rates for AAA Three Diamond lodgings are expected to increase six percent from one year ago with travelers spending an average of $148 per night compared to $139 last year. Travelers planning to stay at AAA Two Diamond hotels will be paying eight percent more at an average cost of $110 per night. Weekend daily car rental rates will average $43, a seven percent decrease from one year ago.

Average travel distance down slightly; median spending largely unchanged
According to a survey of traveler intentions, the average distance traveled by Americans during the Labor Day holiday weekend is projected to be 608 miles, only slightly less than last year’s average travel distance of 635 miles. Median spending is expected to be $702, largely unchanged from $697 last year. Fuel and transportation costs combine to consume the largest share of holiday spending (27 percent), followed by accommodations (22 percent), food and beverages (21 percent), shopping (13 percent), entertainment and recreation (12 percent), and other costs (five percent). 

Impact of gasoline prices on travel plans
The current national average price for self-serve regular gasoline is $3.57 per gallon, 87 cents higher than one year ago. The South Dakota average price today of $3.594 is 83 cents above last year. AAA says after dropping nearly ten percent from their May highs, gas prices will have less of an impact on Labor Day travel than they had on Memorial Day and Independence Day travel, during which 42 percent and 44 percent of travelers, respectively, stated gas prices would impact travel plans. Seventy-one percent of intended Labor Day holiday travelers said gasoline prices would not impact their travel plans. For the remaining 29 percent who said gas prices would impact their travel plans, 20 percent plan to economize in other areas while the remaining nine percent are divided between changing their mode of travel and taking shorter trips. 

Travelers concerned about how fuel prices will impact their travel budget can download the free, GPS-based AAA TripTik® Mobile application to their iPhone or Android device to compare prices for all grades of gasoline at nearby stations. Travelers may also use AAA TripTik Mobile to get maps and directions, AAA Approved and Diamond Rated hotel and restaurant information complete with AAA inspector notes, plus details about attractions, events and AAA Approved Auto Repair facilities.

A not-for-profit organization, AAA South Dakota serves its 89,600 members across South Dakota with emergency help on the road, auto travel assistance and a wide range of personal insurance, travel, financial and automotive services through its 10 retail branches and the Internet at www.AAA.com.

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