AAA Predicts Fewer Memorial Day Travelers
Posted on: Thursday, 15 May 2008, 15:00 CDT
By Tom Shaw, Omaha World-Herald, Neb.
May 15--For the first time in eight years, the number of Americans traveling for Memorial Day is predicted to drop.
AAA's annual prediction says that almost 37.9 million Americans will travel 50 miles or more from home this holiday. That would be a drop of 360,000 people from last year, or almost a 1 percent decline.
The expected drop is being blamed on high gas prices and families' economic worries.
It would be the first decrease in total Memorial Day weekend travelers since at least 2000. The number of travelers has increased or held steady the past eight years.
Broken down by region, the number of travelers in the Midwest is expected to decline by .8 percent. The greatest decrease is predicted for the Northeast.
Most travelers will drive, but flying travelers also are affected by rising fuel prices because of increased or extra fees on airline tickets. Car rental rates also are up.
"Since we've had the higher fuel prices now for the better part of six months, it's impacted many people's budgets," said Rose White of AAA Nebraska.
With record-high oil prices, the traditional winter drop in gas prices didn't materialize. The average price for regular gas in Nebraska is $3.75 a gallon, while the price in Iowa is $3.70. Both are record prices and are about 50 cents higher per gallon than a year ago.
This week, Alaska became the first state to reach an average of $4 a gallon for gasoline. An oil expert said it's not a given that Nebraska and Iowa will see $4 a gallon -- unless a Gulf Coast hurricane or refinery problem crops up.
Denton Cinquegrana, an analyst with the Oil Price Information Service, said there are signs that oil demand is waning and higher oil prices are done rippling through to gas for now.
"The cure for high oil prices is high oil prices," he said. "People are getting more resourceful."
But Cinquegrana also said traders have flocked to oil futures to make quick money, which means the standard law of supply and demand isn't the only thing driving oil prices.
If oil -- which was at $126 a barrel this morning -- gets into the $130s for a prolonged period, then gas prices will surge again, he said.
White said that for those who still are traveling, bargains can be found. Many higher-end hotels are running discounts, White said, and families can opt to use their government stimulus checks to help with vacation costs.
Those traveling in the Midwest may be able to stretch their money further. AAA recently came out with a survey showing North Dakota, Nebraska, Kansas, Iowa and South Dakota as the five least-expensive vacation states for meals and hotel rates.
"They're still going to get away with their families to reconnect," White said.
--Contact the writer: 444-1149, tom.shaw@owh.com
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Source: Omaha World-Herald
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