Americans will cut other expenses rather than forsake highway holidays this Memorial Day weekend, travel group AAA forecast, with near-record $4-a-gallon gasoline seen having little impact on vacation plans.
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About 30.9 million people will drive to their destinations over the May 26-30 holiday period, compared with the 31 million who hit the road a year earlier, AAA said on Thursday.That contrasts sharply with the summer of 2008, when record oil prices kept many people at home.
"Some travelers will compensate for the higher fuel costs by cutting other areas of their travel budgets," AAA President Robert Darbelnet said in a statement.
AAA expects gasoline prices to average $3.91 during the holiday weekend, 37.2% higher than a year earlier.
The average price of regular gasoline fell slightly this week to $3.91 a gallon, its first decline since January but is 38.3% higher than a year before, data from the U.S. Energy Information Administration (EIA) showed.
The unemployment rate is a full percentage point lower than the same period last year and gross domestic product is growing, increasing disposable income and thus travel, the travel group said.Confirming AAA's positive outlook, data from the U.S. Labor Department showed on Thursday the number of Americans filing new claims for jobless benefits fell more than expected last week.The AAA forecast underscores the view of many analysts that gasoline demand in the world's biggest consuming nation is not suffering as much as it did in 2008 because drivers are in a better economic position to weather prices of $4 a gallon.
"We are seeing some signs of initial demand destruction but this won't deter Americans from their holiday plans," said Matt Smith, an analyst at Summit Energy, pointing to EIA data, which showed the four-week average gasoline demand fell 2.3% last week compared with levels seen a year ago.
"People will make sacrifices elsewhere and I think prices will come down after the Mississippi River levels come down," he added.
The forecast, based on a survey of 50,000 U.S. households, also found that just under 3 million people would board flights over the holiday period, an 11.5% jump from a year ago, even as ticket prices rise 14% from 2010.
The total number of vacationers is seen rising to 34.9 million, the highest since 2007. The number soared 14% in 2010 and this year's Memorial Day holiday travel will approach levels seen before the financial crisis, AAA said.