Despite tight budgets, AAA projects 34.8 million Americans will travel 50 miles or more from home during the Memorial Day holiday weekend, an increase of 1.2 percent – or 500,000 travelers – from the 34.3 million people who traveled one year ago. The Memorial Day holiday travel period is defined as Thursday, May 24 to Monday, May 28. Air travel may drop, AAA says.
“The overall domestic economic picture continues to improve slightly; however, American consumers faced a new challenge this year as steadily increasing gas prices throughout the spring significantly squeezed many household budgets,” said AAA President and CEO Robert L. Darbelnet. “Americans will still travel during the Memorial Day holiday weekend, but many will compensate for reduced travel budgets by staying closer to home and cutting entertainment dollars.”
Approximately 30.7 million people plan to drive to their destination, an increase of 1.2 percent from the 30.3 million who drove last year, AAA reports. Almost nine out of ten holiday travelers (88 percent) will take to the nation’s roadways during the Memorial Day weekend keeping automobile travel in the traditional lead as the dominate mode of holiday travel transportation.
A survey of intended travelers found that 53 percent said recent increases in gasoline prices would not impact their Memorial Day holiday travel plans. Of the remaining 47 percent of travelers who said gas prices would impact their travel plans, nine percent are planning to take a shorter trip, four percent will travel by an alternate mode of transportation and 34 percent will economize in other areas.
Those who intend to economize in other areas plan to reduce spending on entertainment (65 percent), stay at a lower priced hotel (34 percent), stay with friends and relatives instead of reserving a hotel room (31 percent) or stay in a hotel that includes value-added amenities like free breakfast and internet (27 percent).
More than 2.5 million leisure air travelers (over seven percent of holiday travelers) will fly during the holiday weekend, a 5.5 percent decrease from last year’s 2.7 million air travelers, AAA says. The remaining 4.5 percent of holiday travelers are expected to travel by other modes, including rail, bus and watercraft.
AAA said the average distance traveled by Americans during the Memorial Day holiday weekend is expected to be 642 miles, which is 150 miles less than last year’s average travel distance of 792 miles. With high gas prices squeezing consumers’ spending power this spring, consumers are responding by traveling shorter distances this Memorial Day holiday.
The decline in expected air travel is a factor in the travel distance decrease as fewer flying miles can be contrasted with the slight growth in automobile travel, AAA reports. Miles flown for weekend travel are typically longer than those driven.
Last year, the shortest trips, those less than 150 miles, made up 19 percent of total travel compared to 21 percent this year, reinforcing the expectation that shorter trips are especially popular this Memorial Day weekend. Median spending is expected to be $702, only slightly more than the $692 median spending last year.
The growth in Memorial Day holiday travel can be tied, in part, to a change in the income demographics of Memorial Day holiday travelers compared to last year, AAA says. Survey results reveal that the share of expected holiday travelers in the under $50K household income bracket has fallen five percent, from 31 percent to 26 percent.
The share of expected travelers in the $50K-$100K household income bracket dropped one percent. Conversely, the share of travelers with household incomes over $100K increased six percent, from 30 percent to 36 percent. The effect of higher gas prices is more significant on lower income households as fuel costs make up a larger share of overall spending.
According to AAA’s Leisure Travel Index, hotel rates for AAA Three Diamond lodgings are expected to increase eight percent from a year ago with travelers spending an average of $160 per night compared to $148 last year. Travelers planning to stay at AAA Two Diamond hotels can expect to pay 10 percent more with an average cost of $120 per night. Weekend daily car rental rates will average $36, four percent ($2) less than last year, AAA says.