Summer travel rises slightly, while many Americans stick close to home to save money

We can expect more Americans to travel for vacation this summer than in the last two years, thanks to a more stable economy and moderate gas prices, although many say they’ll spend less.
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Looking at this summer’s travel forecast is like gazing down a sweltering highway -- everything’s wavy and hazy with no clear view.

While experts say modest gas prices and a somewhat stable economy will spur more Americans to travel for vacation this summer, they also say that a large number of people will choose to stick close to home due to financial concerns. And those that do hit the highway or take to the skies will be spending less than they have in recent years.

In May, the American Automobile Association (www.aaa.com) forecast a 5.4-percent increase in travelers over the Memorial Day weekend, signaling that the roadways will be busier overall in the coming months. “We expect the increase in Memorial Day travel to be the beginning of a strong summer travel season,” Heather Hunter, a spokesperson for AAA, told SNEWS®.

“AAA travel agents and travel partners are reporting strong increases in advance bookings,” said Hunter, adding that people are also booking trips farther in advance. “An additional trend we are seeing is longer booking windows.”

However, AAA also reported that people will be cutting their budgets, and families will spend an average of $809 on their vacation, which is $67 less than a year ago.

Even if the number of travelers does rise, don’t expect to see a flood of activity. According to the American Express Spending & Saving Tracker travel survey released on May 17, only about half (51 percent) of the people surveyed said that summer travel was a priority for them, leaving a whole heap of folks who will stay home.

According to the American Express survey, 80 percent of travelers are looking for ways to spend less on their trips this summer. Thirty-three percent will drive rather than fly, while 30 percent will take a shorter trip, and 27 percent plan to spend less on activities or excursions.

Give it some gas

If there is an uptick in travel, it will likely be due to the fact that the economy is a bit more stable than it was the past two summers, and gas prices are moderate.

Glen MacDonell, director of AAA Travel Services, told Reuters prior to Memorial Day that travelers were feeling better about the state of the economy. “While the economy continues to be rocked by waves of occasional uncertainty, improved economic performance from one year ago should cause more Americans to take vacations this Memorial Day holiday weekend,” he said. Actual numbers of travelers over Memorial Day were not available from AAA, but the organization estimated that about 28 million people would drive to their Memorial Day holiday destinations, which is a 6-percent increase from the 26.4 million who drove the previous year.

Travelers on the highway this summer will benefit from relatively modest gas prices, said Tom Kloza, editor, publisher and chief oil analyst for the Oil Price Information Service (www.opisnet.com).

“Essentially, we’re looking at prices this summer that will be very similar to what we paid last year, roughly between $2.50 and $2.75 a gallon,” Kloza told SNEWS. He said that the weak U.S. financial markets and strong dollar would prevent large increases in the price of oil, so prices at the pumps shouldn’t reach $3 a gallon, a price that has in the past sparked people to reduce their driving.

Two years ago, when gas prices reached $4 a gallon in certain parts of the country, visitation dropped at some National Parks, including Yellowstone, but fuel prices aren’t expected to reduce visitation this year, according to National Park officials.

“Two summers ago, when we did have a little drop, we believe it reflected higher gas prices,” said Al Nash, spokesperson for Yellowstone National Park. “We’ve averaged 2.7 million to 3.3 million visitors the last decade, and absent some dramatic, unforeseen, external action, we have every expectation that we will continue to be around that 3 million mark this year.”

Visitation at Great Smoky Mountains National Park is already up 3 percent compared to last year, said Park spokesperson Bob Miller. “April alone was up 10 percent, which is a pretty good sign,” he said. “One thing in our favor is that the economy has improved to some extent since last year and is more stable. Another possibility is that we will see some people change their vacation plans for the Gulf (of Mexico). A lot of people who usually plan to go to Destin (Florida) might go the East Coast or come here instead.”

Winging it

While there seems to be a consensus that more people will be on the highways this summer, the forecast for air travel is rather cloudy.

The Air Transport Association of America (www.airlines.org), the trade organization for U.S. airlines, estimated that about 2.2 million passengers would travel globally on U.S. airlines between June 1 and Aug. 31, which is 1 percent higher than in the same period in 2009.

“We anticipate that the summer 2010 air travel season will be very modestly ahead of last year,” ATA President and CEO James C. May said in a statement. “We would like to see even more growth, but this slight uptick in the number of air travelers is a positive sign for an economy and an industry in recovery.”

On the contrary, the travel website Bing (www.bing.com) posted a more dismal forecast in April that said, “While we’d love to have better news to report, the summer travel season is looking rather bleak. The average airfare to domestic destinations is up 22 percent from 2009 and 4 percent higher than 2008 fares, averaging $303 per ticket.” One month later, Bing revised its figures, noting that the average domestic ticket was already 24 percent higher than last year, averaging $321 per round trip.

Although there have been hints of economic recovery, the Commerce Department has reported that Americans are still cutting back on their spending. Retail sales dropped 1.2 percent -- the biggest drop in eight months. A clear forecast seems as hazy-wavy as the view over the hot freeway asphalt, but economists have expressed concerns that spending won’t necessarily continue its uptick in the next few months.

--Marcus Woolf

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