Higher Gas Prices Won’t Put Dent in Travel Plans

Americans are bent on travel this summer, and apparently it’s going to take more than steep gas prices and higher air fares to thwart their plans, travel industry observers say.

Across the country, average gasoline prices are about 50 cents higher than they were a year ago, topping $1.65 a gallon. At the same time, average round-trip air fares nationwide have increased about 3%, with sales and discounts by major air carriers few and far between.

In short, this year’s summer vacation has run smack into inflation, but higher travel costs don’t seem to be having much of an impact on America’s wanderlust.

“In this economy, people are hooked on travel,” air travel analyst Terry Trippler said. “Consumers will give up a new couch, a new stove or a new refrigerator before giving up a new vacation.”

Indeed, projections from the Automobile Assn. of America indicate that 4% more Americans will travel over the upcoming Fourth of July holiday than a year ago. What’s more, of the 37.5 million expected to travel, more than eight in 10 are planning to go by car despite gas prices that have spiked above $2 a gallon in some parts of the country.

The findings, based on a nationwide survey of 1,300 adults that was released last week, come on the heels of a report from the AAA last month that summer vacation bookings this year were up 10% over last year at member travel agencies. In addition, the Travel Industry Assn. of America reported in May that the number of intended vacation trips this summer has grown by 3% over last year to 237 million.

“For the most part, Americans can’t resist our love affair with travel, regardless of the cost of fuel,” TIA President William Norman said.

In an April survey, Norman’s organization found that 54% of respondents indicated rising fuel costs would have no effect on their summer travel plans, and 46% said high prices would force modification but not cancellation of their vacations. About 30%, though, indicated they would consider scrapping their trips if gas hit $2 a gallon.

Not surprisingly, in a travel sentiment index released by TIA earlier this month, perceptions of the affordability of travel hit 79 from a base of 100. At the same time, however, ability to travel based on time and income rose to 106 and 109, respectively. “What this says is that travel is so important to Americans, they will pay a premium to go on vacation,” Norman said.

In California, average gas prices have hit $1.64 a gallon, but travelers seem more determined than ever to hit the road. According to the Automobile Club of Southern California, 81,000 more motorists are expected on the streets and highways over the Fourth of July holiday than last year, when a total of 2.7 million gassed up and took off. On average, current gas prices are expected to inflate a typical California vacation budget by $60.

“High gas prices are not holding people back,” said Patty McCann, a travel planner with the automobile club’s Torrance office. “The economy is robust and people are still going out there and traveling. Even motor homes are getting out there, and they require a lot of gas.”

So do airplanes. So much so that the nation’s major airlines have increased domestic air fares anywhere from $30 to $50 per round trip since January, purportedly to offset the rising cost of jet fuel.

Round-trip leisure air fare jumped more than 15% this month over a year ago to hit an average of $280.56, according to AAA. Meanwhile, the Air Transport Assn. reports that overall domestic air fare, leisure and business, is up about 3% over the first five months of the year. Still in May, ATA said that planes flew roughly three-quarters full, posting a year-over-year passenger load increase of 4 percentage points.

May figures for Los Angeles International Airport were not available, but January-through-April statistics show passenger traffic through the facility has increased 5% over a year ago. Over the same period, hotel occupancy in Los Angeles and Orange counties was up roughly 2% over last year.

Charles Ahlers, president of the Anaheim/Orange County Visitor & Convention Bureau, predicted that hotels in the county would continue to see the number of guests grow over the summer.

“We’re still optimistic occupancy will increase by a couple percentage points this summer, and we haven’t had any of the hotels tell us to expect anything different,” Ahlers said.

Michael Collins, executive vice president of the Los Angeles Convention & Visitors Bureau, said that at worst, high gas prices could flatten hotel occupancy growth, but he doubted they would negate growth so far this year, which has put Los Angeles County hotels at 76% full.

“I think we’re going to see as much car traffic this summer as we did last summer,” Collins said. “Good economic times can absorb a whole lot of pain and suffering at the gas pump.”

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Going Places

The top destinations of Southern Californians for Fourth of July:

1. Grand Canyon, Yosemite, other national parks.

2. Baja California and Mexico.

3. Las Vegas

4. Santa Barbara

5. Catalina Island