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Economic optimism may spur highest Labor Day travel in 5 years

Reuters by Reuters
Tuesday, August 20, 2013
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Economic optimism may spur highest Labor Day travel in 5 years
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Falling unemployment, better consumer finances and rising house prices are expected to boost the number of people will traveling in the United States this Labor Day holiday by more than any of the September breaks since the 2008 financial crisis, U.S. travel group AAA said on Tuesday.

The forecast, issued every year by the AAA and prepared with research group IHS Global Insight, predicts 34.1 million people in the country to take a trip of 50 miles or more, a 4.2 percent increase on the 32.7 million that traveled during the holiday a year ago.

In Illinois, AAA expects 1.9 million people to travel over the holiday weekend, up 3.8 percent from last year. Nearly all of those vacationers will be driving. Just over 70,000 Illinoisans are expected to fly, up 2.1 percent from 2012. Lower gas prices across the state are helping spur the uptick – the average price for a gallon of unleaded is $3.63, down from $4.03 last year.

Labor Day lands on Monday, Sept 2. It is considered to be the traditional end of the summer driving season which starts on Memorial Day on Monday, May 27.

The price of gasoline tends to rise during the season as people go on vacation and drive more. In 2008, 45.1 million people took a break away from home. The number dropped sharply to 31.3 million in 2009 as the financial crisis unfolded.

This year, 85 percent of those going away, or 29.2 million people, will travel by car, rising from 28 million last year. Air travel is also expected to increase though, by almost 3 percent to 2.6 million, AAA and IHS said.

“AAA is forecasting a lift in Labor Day travel this year due to the increasingly positive economic outlook and optimism in the housing market,” AAA President and CEO Robert Darbelnet said in a statement. “For many Americans, their home is also their biggest asset, as home prices improve in many parts of the country more families are feeling comfortable about traveling this Labor Day holiday,” he said.

Gasoline prices are currently 2.7 percent lower on average than a year ago although AAA warned they could rise later in the month should hurricanes and tropical storms or refinery outages dent production. It said however prices will have little bearing on whether people choose to travel or not.

The average traveler will journey 594 miles (956 kilometers) and spend $804 during the long weekend round trip, the two groups said.

AAA and IHS forecast the number of people traveling based on a variety of economic indicators while their prediction of behavior, such as journey length and money spent, is based on interviews with people intending to travel from a survey of 1,350 households.

 

Copyright © 2013, Reuters

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