Weak economy will zap holiday trips, AAA says
COLUMBUS, Ohio -- Fewer people will be traveling this July Fourth holiday, auto club AAA said Wednesday, even though gasoline is far cheaper this year and pump prices have begun to fall even more.
AAA said it expects 37.1 million travelers — 12% of the U.S. population — to take a trip of 50 miles or more away from home this year, a decrease of 1.9% from last year.
AAA blames the decline on uncertainty over the economy, particularly the rising unemployment rate and sagging personal incomes.
Gasoline prices rose every day for nearly two months, but began to fall on Monday. Gas at this time last year cost more than $4. National average pump prices are 34% lower today at about $2.68.
AAA did say air travel is expected to increase by 4.9% because of declining airfares and pent up demand for vacations.
The decline is not as bad as last year when travel fell 10.5%. In fact, this year's holiday travel will be bolstered by people who did not travel last year and now are returning to more typical spending and travel patterns.
Unemployment is at 9.4% and expected to top 10%. Household income is dropping and Americans saw their net worth fall by a staggering $1.3 billion in the first quarter amid declining home values and investment portfolios. As a result, many people are opting to stay home, AAA said.
While gas prices are down from a year ago, their recent rise is not helping.
"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," Robert Darbelnet, AAA president and CEO, said in a statement.
AAA projects that 88% of the trips, a total of 32.6 million travelers, will go by car, a 2.6% drop from last year. Cheaper airfares will also contribute to a decline in auto travel. About 2 million people are expected to travel by plane.
Travelers will spend about $1,160 per household for their trip. Transportation and accommodations will account for about half of the cost with food and drinks taking 20%. The rest will be spent on shopping, entertainment and recreation.
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