Does Expensive Gas Make Vacations Too Pricey?

April 25, 2006 — -- With gas prices soaring as the summer vacation season approaches, some Americans are changing travel plans to avoid the high prices at the pump.

Is it just too expensive to take a vacation?

Across the country, gas prices have shot higher during the last month. The average price for a gallon of regular unleaded jumped to $2.91 last week, up 30 percent from a year ago -- $2.24 -- thanks to a recent drop in the nation's stockpiles of gasoline and some difficulties in switching from the artificial fuel additive MTBE to ethanol.

Travel industry sources say that they have thus far seen little variation in reservations for summer hotel stays across the country. As prices creep toward $3 a gallon, however, the rising cost may become a factor for those who have not yet made their summer plans.

"Last year we didn't see any change at all when gas prices spiked," said Joe McInerney, president for the American Hotel and Lodging Association. "If anything does happen, what will happen is their trips won't be as long, and we'll see shorter durations and shorter stays at hotels."

Early this year, Renee Kauffman and her husband tentatively planned a five-day summer road trip to celebrate their 10th wedding anniversary. Because of the rising expense of car travel, their plans changed.

"We were going to drive up to the Hamptons [in New York] for five days, because we've always heard it's so beautiful, and maybe up to Boston," said Kauffman, a customer service representative who lives in Paramus, N.J.

Now the couple are planning a shorter stay at a nearby beach in New Jersey, or they might take mass transit to avoid driving altogether.

"It's just not worth it. By the time we drive four to five hours, what used to cost us about $125 will cost us $250 easy. It's crazy," she said. "Now, it's probably the good old Jersey Shore, which is only an hour away, or maybe a train into New York City for a night. We're fortunate that we have a train system close by."

Most Vacation Travel Is by Car

The Washington-based Travel Industry Association estimates that 82 percent to 86 percent of American summer vacations are driving vacations, with the average length being about four nights. Last year, when gas prices climbed, the organization estimated that the higher prices tacked an extra $40 to $45 onto the total average vacation expense.

Even with the run-up in prices this year, the extra expense could be minimal. Daily driving could limit many people's budgets and change travel plans. The budget crunch is particularly tough on those who drive long commutes every day and small business owners who see their profits hurt by the extra operating expense.

"It really affects the daily pocketbook and daily expenses more than just your travel expenses," said association spokeswoman Cathy Keefe.

Carmen Ross and her husband, Jeff, own a food products distribution company in Rapid City, S.D. The company ships brand-name snack products to grocery stores in a 200-mile radius around Rapid City. With the run-up in gas prices, she said the company had seen its monthly shipping expenses jump sharply higher.

"In the last few months, our fuel expense has jumped from about $1,200 a month to about $1,700," Carmen Ross said.

In addition, Jeff Ross drives 120 miles round trip every day from the couple's home in Hot Springs to his office in Rapid City.

"For both our professional and personal driving, our fuel bill for March was about $2,000," Carmen Ross said.

She said that Jeff had shopped around for a hybrid car that might be more fuel efficient. Even with a hybrid helping to bring down his personal costs, the company's operating expenses would probably still squeeze their monthly budget, she said. Because of the budget constraints, they've already canceled their summer vacation plans.

"Last year, we took 10 days and went to New Hampshire, and this year we planned a trip to Washington, Oregon and California, but that's pretty much off now," she said.

Shorter Travel, Shorter Stays

The travel association's Keefe said that 30 percent of travelers had planned their summer vacations in the early months of the year -- a larger percentage than normal.

"What people will do is modify. Instead of canceling a trip, they'll visit destinations that are closer so they don't have to travel as far," she said.

Eric Shulman and his partner, Ethel, are planning to do just that. For the last two summers, they've driven more than 1,500 miles from their home in Fullerton, Calif., to various spots on the California coast. Last year, they planned an early May vacation to Carmel, Calif., to avoid the high gas prices that were predicted for later in the summer.

This summer, the gas crunch came too early. The family has already canceled a trip to Bishop, Calif., in the Sierra Mountains.

"My other half just vetoed the whole thing," Shulman said. "Gas is already $3.19 a gallon here at the cheapest gas station. We knew how much it cost us to drive that far last year, and we just decided it was too expensive."

Shulman said the family would plan shorter, weekend trips to places like Laguna Beach and San Diego, both of which are less than 100 miles from their home.