Despite Sluggish Economy Americans Continue to Prioritize Holiday Travel, AAA Says

Projected travel up 2.9 percent from Labor Day holiday weekend last year, highest travel volume expected since 2008 before the recession caused a retraction in Labor Day travel

ORLANDO, FL--Aug. 21, 2012: AAA Travel projects 33 million Americans will journey 50 miles or more from home during the Labor Day holiday weekend, a 2.9 percent increase from the 32.1 million people who traveled last year.  The total number of 2012 Labor Day holiday travelers is expected to reach a new post-recession high, and is the third increase in holiday travel this year, according to the AAA/IHS Global Insight 2012 Labor Day Holiday Travel Forecast.  AAA's Memorial Day and Independence Day holiday travel forecasts projected increases of 1.2 percent and 4.9 percent, respectively. 

Despite a sluggish economy and recent rises in gas 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, AAA Travel Services. "Travel is still within America's discretionary spending budget."    

The health of the travel industry is dependent upon discretionary spending and growth in travel has a positive effect on employment and the overall economy.  In the first quarter of 2012, the U.S. Department of Commerce reported that 7.6 million jobs are supported by the travel and tourism industry.  The jobs total consists of 5.4 million (71 percent) direct tourism jobs and 2.2 million (29 percent) indirect tourism-related jobs.

Impact of household finances on travel plans
A survey of intended travelers found that 66 percent said their current financial situation would not negatively impact their Labor Day holiday weekend travel plans.  Of the remaining 34 percent of travelers who said their current finances would impact their travel plans, 21 percent will economize in other areas, nine percent are planning to take a shorter trip, and the remaining four percent 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.         

Automobile travel up 3.1 percent  
Approximately 28.2 million people (85 percent 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 percent increase over the 27.3 million people who took to the nation's roadways in 2011. 

Number of air travelers expected to increase by 3.7 percent, airfares decrease
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 (eight percent of holiday travelers) will fly during the Labor Day weekend, a 3.7 percent 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 four percent 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 seven percent 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 percent decrease over last year.            

Average travel distance increases as most travelers prefer shorter trips, spending up  
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 percent) 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.

Travelers to experience increase in hotel rates, decrease in car rental rates
According to AAA's Leisure Travel Index, Labor Day holiday hotel rates for AAA Three Diamond lodgings are expected to increase four percent from a year ago with travelers spending an average of $154 per night compared to $148 last year. Travelers planning to stay at AAA Two Diamond hotels can expect to pay six percent more at an average cost of $117 per night.  Weekend daily car rental rates will average $39, a ten percent decrease from one year ago.

Impact of gasoline prices on travel plans
National gas prices have fluctuated and been particularly sensitive to region 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 percent 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 gas 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, gas prices are not expected to have a major impact on Labor Day holiday weekend travel. Historically, incidents that impact regional gas prices and regional travel have not impacted nationwide holiday travel.       

AAA's projections are based on economic forecasting and research by IHS Global Insight. The Boston-based economic research and consulting firm teamed with AAA in 2009 to jointly analyze travel trends during the major holidays. AAA has been reporting on holiday travel trends for more than two decades. The complete AAA / IHS Global Insight 2012 Independence Day Holiday Travel Forecast can be found at AAA Newsroom.