Gas Prices Not Expected to Deter Labor Day Travel Plans

AAA projects volumes to be up 2.9% over last year, highest since 2008

ORLANDO, Fla. -- AAA Travel projects 33 million Americans will journey 50 miles or more from home during the Labor Day holiday weekend, a 2.9% increase from the 32.1 million people who traveled last year. It expects that the total number of 2012 Labor Day holiday travelers will reach a new post-recession high, and it is the third increase in holiday travel this year, according to the AAA/IHS Global Insight 2012 Labor Day Holiday Travel Forecast.

AA's Memorial Day and Independence Day holiday travel forecasts projected increases of 1.2% and 4.9%, respectively.

Despite a sluggish economy and recent rises in gasoline prices, the increase in expected Labor Day holiday weekend travelers is driven by improving consumer confidence compared to one year ago and Americans' unwavering desire to travel. The Labor Day holiday travel period is defined as Thursday, August 30 to Monday, September 3.

"In the absence of strong economic growth that might fuel a significant boost in travel volume, it is an encouraging sign that Americans continue to prioritize travel," said Bill Sutherland, vice president of AAA Travel Services. "Travel is still within America's discretionary spending budget."

A survey of intended travelers found that 66% said their current financial situation would not negatively impact their Labor Day holiday weekend travel plans. Of the remaining 34% of travelers who said their current finances would impact their travel plans, 21% will economize in other areas, 9% are planning to take a shorter trip, and the remaining 4% will travel by an alternate mode of transportation.

The group of surveyed travelers who reported their intent to economize in other areas plan to reduce spending on shopping and sightseeing and will stay with friends and relatives instead of reserving a hotel room. Conversely, changes in the expected primary activities of travelers this Labor Day holiday include increases in entertainment like nightlife, sporting events, concerts and golf.

Approximately 28.2 million people (85% of holiday travelers) will make their Labor Day holiday journey by automobile, considered the most convenient mode of travel for many Americans. This is a 3.1% increase over the 27.3 million people who took to the nation's roadways in 2011.

Labor Day holiday air travel has been fairly consistent since the recession bounce back began for the travel industry in 2010. About 2.55 million leisure travelers (8% of holiday travelers) will fly during the Labor Day weekend, a 3.7% increase over 2011 when 2.46 million traveled by air. In 2010, 2.6 million chose to fly to their Labor Day vacation destinations, which began the steady recovery from the decade-low 1.5 million air travelers in 2009. Airfares decreased 4% over last year with an average lowest round-trip rate of $197 for the top 40 U.S. air routes, according to AAA's Leisure Travel Index.

The remaining 7% of Labor Day holiday travelers are expected to use other modes of transportation, including cruise ship, rail and bus travel, accounting for 2.3 million Americans--a nominal 0.2% decrease over last year.

According to a survey of intended travelers, the average distance traveled by Americans during the Labor Day holiday weekend is expected to be 626 miles, up slightly from last year's average 608 miles. Despite the longer average travel distance, most holiday travelers (54%) will be taking shorter-distance trips, between 100 and 400 round-trip miles. The increase in expected air travel is a contributing factor to the slight lift in the average travel distance as air trips typically span longer distances than automobile trips, many over 1,500 round-trip miles.

Median spending is expected to be $749, a small increase over the $702 median spending of intended holiday travelers in 2011.

National gasoline prices have fluctuated and have been particularly sensitive to regional variations throughout much of the year. On April 5 and 6, motorists experienced a year-to-date peak average price of $3.94 per gallon for regular gasoline. The current national average price of regular gasoline for August 20, 2012 is $3.72 per gallon, which is 22 cents less than the April peak and 14 cents more than last year's price on August 20.

Gasoline purchases are critical expenditures in most household budgets, yet 66% of intended holiday travelers said their current household finances would not negatively impact their Labor Day holiday weekend travel plans. As the Labor Day holiday weekend approaches, increases in gasoline prices could cause some travelers to alter their plans. Conversely, falling prices could spur last-minute travel increases.

Barring any significant unforeseen events such as severe hurricanes, geopolitical incidents or dramatic nationwide price increases, gasoline prices are not expected to have a major impact on Labor Day holiday weekend travel. Historically, incidents that impact regional gasoline prices and regional travel have not impacted nationwide holiday travel.

Click here for the full AAA Labor Day Forecast, including charts and regional breakdowns.