Gasoline prices are way up, but that isn’t preventing summer trips
07/02/2014 5:34 PM
07/02/2014 10:56 PM
Gas prices have hit a five-year high, but apparently that’s not enough to derail summer travel plans.
AAA is expecting vacationers to take more driving trips this Fourth of July weekend — 34.8 million auto trips over the next three days, a 2.2 percent increase from last year.
The AAA prediction, based on its latest survey, comes as people are driving more efficient cars, getting used to swings in gas prices and seeing airfares rise — all factors keeping car trips attractive. The survey also comes amid other signs that summer travel isn’t suffering because of gas prices, as some feared it would.
Gasoline demand is up slightly over the last month compared with a year ago, according to the Energy Information Administration. And an executive with the motel chain Best Western recently said its room bookings were up 11 percent for the season.
Mike Right, a spokesman for AAA, said, “It used to be that even a jump of 10 cents a gallon would upset motorists. People are more used to seeing fluctuations in gas prices.”
On Wednesday, the national average price for a gallon of regular gas was $3.67 a gallon, 19 cents higher than a year ago. On the Missouri side of the Kansas City area, gas was $3.56 a gallon, 35 cents higher than a year ago. Fuel prices are a few cents more on the Kansas side because of higher fuel taxes.
Local prices might be even further below the national average if the Kansas City area didn’t have to use a boutique fuel blend to reduce smog. Just 40 miles north in St. Joseph, motorists were filling their tanks with gas priced at $3.43 a gallon. But the Kansas City fuel blend is used in only a handful of markets in the U.S., making it more susceptible to tight supplies and price volatility.
Another reason that driving trips are expected to be up is that airfares have increased — up 5.7 percent just in May, the largest monthly jump since July 1999. The cost of flying a whole family on vacation can make a driving trip seem like a bargain.
The cheapest round-trip Kansas City to St. Louis flights in mid-August, for example, would cost $824 for a family of four. The gasoline for a car trip would be about $75. A commonly used figure — about 60 cents a mile — that accounts for the total cost of operating a motor vehicle including depreciation would price the trip at $300.
The AAA survey suggests that motor vehicles are stealing some business from the airlines. Air travel will be flat for the Fourth of July holiday.
Still, airlines are expected to do well this summer, with planes packed.
“It seems to be the year to take the vacation,” said Chris McGinnis, editor of TravelSkills.com.
Over the last few years, airlines have shrunk the number of seats available for travel, boosting fares. McGinnis said people who haven’t purchased tickets for summer vacations should consider, if they can, going after Aug. 25, when fares will be cheaper.
Higher gas prices have had a varying effect on the tourism industry.
In the 1970s when the OPEC embargo caused gasoline shortages and price spikes, Silver Dollar City, near Branson, bought gasoline and told customers that if they made it to the tourist attraction they would help them get back home.
But Silver Dollar City gets most of its customers within a 300-mile radius, making it less vulnerable to volatile gas prices. More important for the business is the weather. The forecast for Branson on the Fourth of July weekend doesn’t call for much chance for rain until Sunday.
“We are very thankful for the upcoming forecast,” said Lisa Rau, a spokeswoman for Silver Dollar City.
Also taking the edge off gasoline prices is that more families are traveling in more fuel-efficient cars. The average fuel economy of new vehicles sold in the U.S. in June was 25.5 miles per gallon. That’s up 5.4 mpg from 2007, according to the University of Michigan.
Lars Perner, assistant professor for clinical marketing at the University of Southern California, said there are other explanations for an uptick in summer travel. More people have jobs and have adjusted family budgets to pay for higher gas prices.
Whether they like it or not, consumers expect higher gas prices and are getting more used to them.
“It’s just the way it is, and there is less denial,” Perner said.
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