Rising Fuel Prices and Economic Uncertainty Will 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 Oklahoma, 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 are out of class and families are more likely to take vacations.

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 jump 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 the level of travel we are forecasting for the upcoming holiday weekend," said Chuck Mai, spokesman for AAA Oklahoma. "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 very 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 54,500 Oklahomans will be traveling by air this holiday, AAA says, a nearly two percent boost over year-ago figures.

Although fuel prices remain much lower than they were one year ago, the relatively steep price increases this year 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 Oklahomans will be getting there by motor vehicle this year compared to July 4, 2008. AAA projects 415,300 Oklahomans will drive 50 or more 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 $1.06 since the first of the year but still $1.39 below the average a year ago.

The Oklahoma statewide gasoline price average stands at $2.528 today, up $1.03 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 8,400 Oklahomans, which represents a twelve 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 round trip over 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. Another one-third of weekend travelers will log between 250 and 700 miles. And 28 percent will travel more than 700 miles round trip.

Oklahoma travelers will be putting more miles on their vehicles than the national average with an average round trip of 811 miles. New Englanders will stay closest to home with an average round trip distance of only 414 miles. 

Besides visiting friends/family and dining, Oklahomans’ number one activity over the Fourth will be shopping (51 percent say they’ll be doing this), followed by touring/sightseeing (40 percent), attending festivals/craft fairs (30 percent), visiting historic sites (23 percent), going to museums (23 percent) and visiting national or state parks (21 percent).

Airfare and lodging costs will be lower

According to AAA’s Leisure Travel Index – a price monitor of hotel rooms and car rentals in 20 destination cities across the U.S., along with airfares between 40 pairs of cities – the lowest average published airfares over the July 4th holiday weekend are expected to decrease 16 percent from last year with air passengers paying as little as $169. From February through June of this year, the lowest fares have been below those recorded in the same months of 2008.

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

Hotel rates at AAA Three Diamond-rated and Two Diamond-rated lodgings are expected to be twelve percent less this year 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 considers current economic conditions, past holiday travel trends and behavior, and a 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 make up the entire 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, a top source for data on travel volume and behavior in the U.S. DKSA interviews more than 50,000 American households every 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 the current economic recession is not evenly distributed throughout the country. For example, the relative strength in the Mountain region (ID, MT, WY, NV, UT, CO, AZ and NM) is reflected in expectations for higher than average Independence Day weekend travel, as opposed to the New England and the East South Central regions where this will not be the case.

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 (334,000 in Oklahoma) 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 Oklahoma can be visited on the Internet at AAA.com.