Americans will hit the road in as large numbers as last year over the Memorial Day Weekend, but will compensate for higher fuel prices by cutting spending on restaurants, shopping and recreation, according to an annual forecast released by AAA.


Memorial Day travel experienced a gain of more than 14 percent in 2010, and this year we expect to add slightly to that gain due to an increase in air travel and an improvement in the overall domestic economic picture, said AAA President and CEO Robert L. Darbelnet. Some travelers will compensate for the higher fuel costs by cutting other areas of their travel budgets.

 

AAA projects 34.9 million Americans will travel 50 miles or more from home during the Memorial Day holiday weekend, a slight increase of 0.2 percent-or 100,000 travelers-from the 34.8 million people who traveled one year ago. The Memorial Day holiday travel period is defined as Thursday, May 26 to Monday, May 30.

Approximately 30.9 million people plan to drive to their destination, a small decline from the 31 million who drove last year. In spite of gasoline prices more than a dollar per gallon higher than a year ago, automobile travel continues to be the dominant mode of transportation. Almost nine out of ten holiday travelers (88 percent) will take to the nations roadways during the Memorial Day holiday weekend. The national average price for regular gasoline is $3.91, compared to $2.85 this time last year.



Impact of gasoline prices on travel plans
A survey of intended travelers found that six out of ten said rising gasoline prices would not impact their travel plans. Of the remaining four out of ten travelers who said rising gas prices would impact their travel plans, 70 percent will economize in other areas and the rest will take a shorter trip or travel by an alternate mode of transportation.

 

This could cut both ways for the outdoor industry. On the one hand, travelers expect transportation to account for 31 cents of every dollar they spend over the holiday compared to 25 cents a year ago and will adjust by spending 25 cents of every dollar on shopping, down from 29 cents in 2010. On the other hand,  travelers also indicate they will shift to less expensive activities compared to last year, such as outdoor activities like the beach, sightseeing, hiking, historic and state parks and nature trips. Just 8 percent plans to golf, compared to 11 percent a year ago.

   


“These come at the expense of dining, shopping, gambling, concerts/plays museum and art exhibits. Visiting friends and relatives is also taking a hit from a share standpoint as shift away from longer road trips to visit friends and families this holiday,” the report reads.

 

The percentage of respondents saying they would participate in touring/sightseeing or Observe & conserve nature/culture-Eco Travel, each rose 7 points to 37 and 11 percent respectively. Those planning to hike or bike rose 6 points to 25 percent. By comparison the percentage saying they would dine or shop or visit museums, art exhibits, etc., or gamble or attend concerts plays, dance declined by 9, 7, 8, 12, and 9 percentage points respectively.


Other highlights of the survey include:

 


  • Number of air travelers expected to increase by 11.5 percent: Nearly 2.93 million leisure air travelers (eight percent of holiday travelers) will fly during the holiday weekend, an 11.5 percent increase from last years 2.63 million air travelers. The remaining three percent of holiday travelers are expected to travel by other modes, including rail, bus and watercraft.
  • Airfares, hotel rates and car rental rates all rise: According to AAAs Leisure Travel Index, Memorial Day holiday airfares are expected to be 14 percent higher than last year with an average lowest round-trip rate of $201 for the top 40 U.S. air routes. Hotel rates for AAA Three Diamond lodgings are expected to increase five percent from a year ago with travelers spending an average of $148 per night compared to $142 last year. Travelers planning to stay at AAA Two Diamond hotels can expect to pay 10 percent more with an average cost of $109 per night. Weekend daily car rental rates will average $38, just $1 higher than last year.
  • Average travel distance up 27 percent; median spending down 14 percent: According to a survey of traveler intentions, the average distance traveled by Americans during the Memorial Day holiday weekend is expected to be 792 miles, which is 27 percent greater than last years average travel distance of 626 miles. Air Travel is expected to gain a larger share of overall travel, and is likely the cause of a substantial increase in the average travel distance compared to a year ago. Median spending is expected to be $692, a decrease of 14 percent from $809 last year. 

The full 40-page report is available here.