AAA Travel is projecting 34.7 million Americans will journey 50 miles or more from home during the Labor Day holiday weekend, the highest volume for the holiday since 2008 and a 1.3 percent increase over 2013. Consumer spending is continuing to rise in spite of stagnant income growth, AAA says.
Nearly 86 percent of travelers (29.7 million) will celebrate the holiday with a final road trip before summer comes to a close and children head back to school. The Labor Day holiday travel period is defined as Thursday, August 28 to Monday, September 1, AAA notes.
Highlights from the AAA's 2014 Labor Day Travel Forecast include:
- Historically, when Labor Day weekend begins in August, Americans have shown a higher tendency to travel.
- Consumer spending has surpassed income growth, indicating that Americans are willing to take on debt to finance a vacation.
- Automobile travel will increase by 1.4 percent this year, with 29.7 million travelers hitting the road.
- Nearly eight percent of travelers (2.65 million) will travel by air, a one percent increase from last year.
- Travelers will encounter airfares just two percent higher than last year and daily car rental costs that remain consistent at $51.
- Hotel rates at AAA Two Diamond hotels are nine percent higher than last year and Three Diamond hotels are six percent more.
“As the economy makes modest gains, more Americans are joining the labor force this year,” said AAA COO Marshall L. Doney.
In the third quarter of this year spending is expected to increase 3.8 percent year-over-year, while disposable personal income is only expected to increase 1.4 percent. Reliance on credit cards, rather than increasing income, is fueling holiday travel spending this year. While economic growth is slow, consumers are feeling more comfortable taking on debt.
“This year, Americans are more optimistic about their financial situation,” said Doney. “Consumer spending continues to outpace disposable income, indicating that Americans are comfortable using their credit cards to take one last summer vacation this year.”
Most U.S. consumers are paying the lowest gas prices for early August since 2010. AAA expects gas prices to have little impact on the number of people traveling for Labor Day, though lower prices could help make travel more affordable.
According to AAA’s Leisure Travel Index, hotel rates for AAA Three Diamond lodgings are expected to increase six percent from one year ago with travelers spending an average of $171 per night compared to $161 last year. The average hotel rate for AAA Two Diamond hotels has risen nine percent with an average cost of $125 per night.
Weekend daily car rental rates will average $51, the same as last year. Airfares have risen two percent with the average round-trip, discounted fare for the top 40 U.S. routes costing $219, up from $214 last year.