Fill up the tank and check the oil: with the Fourth of July holiday right around the corner, many Americans are getting ready to go on a road trip. Between Wednesday, July 2, and Sunday, July 6, nearly 35 million people will travel at least 50 miles from home by automobile, according to the AAA Independence Day Holiday Travel Forecast.
Of the 41 million people leaving town over the holiday, more than eight in ten are are traveling by car. That’s the highest rate of July 4th road-trippers reported by AAA since 2007.
Gas prices might edge up before the holiday, but people who are going on vacation have already largely made their plans and drawn up their budgets. If prices at the pump eat into that budget, travelers will cut back on spending in other areas. At a current average of $3.68, fuel prices are up over last year already. On July 4 last year the average price-per-gallon was $3.48.
Credit cards at the ready
People’s plans to spend a little more on vacation this year doesn’t mean they are making more money. Rather, they are more willing to put expenses on credit cards. For four of the past five years, Fourth of July travel volume has increased. And more people travel for Independence Day than for Memorial Day – to the tune of five million extra.
AAA regional president Brad Roeber said that an improved economic outlook “has spurred increased consumer confidence and spending. Optimistic Americans are more willing to take on debt this year.”
Airfares sink, hotel rates rise
According to AAA, airfares are 5% lower this year than last year, with an average round-trip discount flight ringing up at $215, compared with $228 last year.
Hotels with the AAA Two Diamond rating are 15% more expensive, at an average cost of $137 a night. AAA Three Diamond-rated hotel rates will be 9% higher than in 2013, with an average cost of $178 per night compared to $164 per night last year. Rental car rates are consistent with last year’s prices, costing an average of $58 per day.
In spite of lower airfares, fewer folks are flying this year than last. Air travel is projected to dip by 0.6%, from 3.12 million in 2013 to 3.1 million this year.
The AAA Independence Day Holiday Forecast is based on research and economic forecasting done by Colorado-based company IHS Global Insight. AAA has been putting out holiday travel forecasts for over 20 years.