Weak economy will zap holiday trips, AAA says
COLUMBUS, Ohio — Economic instability will trump cheaper gas this July Fourth holiday, with more people choosing to stay home rather than hit the road, according to a survey released Wednesday
Auto club AAA said it expects 37.1 million travelers — 12 percent of the U.S. population — to take a trip of 50 miles or more from home this year, a decrease of 1.9 percent from last year.
Gasoline prices had risen every day for nearly two months until Monday, but remain far below last year’s levels, when a gallon surpassed $4.
National average pump prices are now 34 percent lower at about $2.68 per gallon.
AAA says the economy, particularly the rising unemployment rate and sagging personal incomes, is to blame.
Declining airfares, however, should bolster air travel by 4.9 percent, according to the survey.
Last year auto travel plunged 10.5 percent. Many people who did not take a trip last year when gas hit $4 per gallon said they will be traveling this year to shake their cabin fever.
But compared with 2007, travel over this holiday is still down 12 percent.
Unemployment is at 9.4 percent and expected to top 10 percent, 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.
“There’s still a lot of economic bad news weighing heavily on a household’s decision to travel,” said Ken McGill, executive managing director for travel and tourism services for IHS Global Insight, which surveyed 2,700 homes about their travel plans for the AAA report.
Also a drag on travel is the increasing savings rate by Americans. Americans’ personal savings rate zoomed to 5.7 percent in April, the highest since 1995.
AAA projects that 88 percent of the trips, a total of 32.6 million travelers, will be made in a car, a 2.6 percent drop from last year. Cheaper airfares is part of the reason. 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 percent. The rest will be spent on shopping, entertainment and recreation.
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