Historically high fuel prices are expected to have a negative impact on summer travel and are accompanied by broader economic concerns for many Americans. The Travel Industry Association of America (TIA) forecasts travel volume growth of less than 1 percent this year amid relatively soft travel intentions. According to TIA’s Summer 2006 Forecast, Americans will take 325.6 million leisure person-trips during June, July and August 2006. A person-trip is one person traveling 50+ miles, one-way, away from home.

“I am concerned about a number of economic indicators with gasoline prices and the pocket-book impact they’re having leading the way,” said Dr. Suzanne Cook, senior vice president of Research for the Travel Industry Association of America. “We’ve had gasoline prices jump up for the summer travel season before and weathered it but there are additional factors to be considered this year.”
Dr. Cook explained that gasoline prices of $3.00 per gallon could be the “tipping point” for many Americans. For example, it is the point at which 10 percent of travelers say they would seriously consider canceling a trip. Between $3.00 and $3.24 per gallon, an additional 26 percent would seriously consider canceling a trip. While the higher cost of gasoline this year will add only about $30 - $50 to the cost of the typical vacation, that alone does not account for the possible impacts on travel spending decisions from the week-to-week costs of keeping their gas tanks full prior to a vacation. Cook added that gas prices further complicate the picture because they threaten to fuel inflation and undermine economic growth and consumer confidence more generally.

Americans expect to stay away an average of 6 nights on their longest pleasure trip. Travelers plan to spend an average of $1,033 on their longest pleasure trip this summer, essentially unchanged from the summer of 2005 ($1,019). However, they will have to economize in some areas to compensate for higher hotel room rates and airline fares in addition to higher gas costs.

SUMMER 2006 HIGHLIGHTS

* Expect a reverse of last summer’s travel pattern—Gas prices should cause weaker demand early this summer but demand will grow stronger as the summer wears on and travelers get used to high gasoline prices. (This assumes that gas prices have stabilized and may even decline over the summer and that there are no more gas price surprises, or other events.)

* Continuing past trends, air travel and hotel demand will rise even as hotel room rates and air fares go up.

* Forty percent of travelers plan to take children or grandchildren on their longest trip.

* The top three activities planned by summer travelers are visiting friends and relatives (55%), going to a beach or lake (38%) and visiting small towns or rural areas (27%).

* Rounding out the top planned summer travel activities are: visiting cities/urban areas (21%), visiting national or state parks (20%), visiting historic sites (20%), camping, hiking or climbing (16%), fishing (15%), attending a family reunion (14%), visiting a theme/amusement park (15%), visiting a museum (14%), and going to a casino (14%).

* Five percent of summer travelers plan to use an RV, while 6 percent intend to enjoy an all-inclusive resort. And 6 percent say they plan to take a cruise.

* International travel to the U.S. will continue to rise as declines in the value of the dollar make the U.S. an international travel bargain and as airlines more vigorously pursue international markets and add capacity.
——-