Summer Travel Up Despite High Air Fares and Gas Prices

The travel industry has been hoping that travel will be up sharply this year. With seven weeks left in the traditional summer vacation, confidence in that prediction is building.

According to Bloomberg News, passenger traffic in June rose by 5 percent for 17 U.S. airlines over the same month last year.

At Kansas City International Airport, 3-year-old Austin Coffman and mother Erin Coffman recently welcomed Austins grandmother, Susan Petry of Las Vegas, for a nine-day visit. The Coffmans are from Ottawa, Kan. Many Americans are proceeding with their summer travel plans despite higher costs for airline tickets and for gasoline.

Air fares and gasoline prices are up, but thats not stopping summer travel, which is on track for a record season.

The travel industry has been hoping that travel will be up sharply this year. With seven weeks left in the traditional summer vacation, confidence in that prediction is building. The season kicked off with a strong Memorial Day weekend, and AAA estimated that the number of travelers over the Fourth of July weekend set a record for a three-day holiday weekend.

Airlines also are reporting heavy loads. Southwest Airlines, for example, reported an 8 percent increase in passenger traffic in June compared with the same month last year. And a key indicator for gasoline sales, from the federal Energy Information Administration, shows that demand for the fuel is up more than 2 percent so far this summer.

Hotels and motels also have seen increasing demand. According to the Travel Industry Association of America, demand for rooms was up 3.4 percent through May, compared with a year ago, and revenue was up more than 8 percent.

Everything is really cooking, said Mike Right, spokesman for AAA Auto Club of Missouri.

The upswing in travel comes even as gasoline prices hover at record levels when not adjusted for inflation. The national average for regular unleaded gas was $2.30 on Thursday, up 38 cents a gallon from a year ago. And airfares are reversing a nearly four-year decline in prices as airlines recover more of their fuel costs. The Bureau of Labor Statistics said airfares in June were the highest since July 2001, the summer before the Sept. 11 terrorist attacks.

The high costs are not going unnoticed, but consumers apparently are shaking them off and proceeding with their vacations.

Charles Bunny of Kansas City is driving more than 900 miles to Mobile Bay, Ala., despite the extra cost for gas. Im traveling, but I would be happier if gas didnt cost as much, he said.

Those mixed feelings are mirrored by those trying to determine whether the increased vacation activity signals an improving economy.

Some economists say the travel reflects better wages, an improved job market and home mortgage refinancing, all of which would give people more money to spend. But there is also travel industry research indicating that people are simply determined to have a vacation and hope to find other ways to cut vacation costs to offset costlier gasoline, air fares and motel rooms.

A survey by the Travel Industry Association of America found that people hoped to spend an average of $1,019 on their longest leisure trip this summer 7 percent less than last summer. On average they also plan to stay seven nights away from home, down about half a night from last year.

Association research also found that most people make vacation plans and then consider budgeting. Most do not stick to a strict trip budget, and more than 30 percent of leisure trips are taken without budgeting.

Another reason that travelers are pushing ahead is that higher gas expenses are not a big part of vacation costs. The Energy Information Administration calculates that a 500-mile trip in a car that gets 25 miles a gallon costs about $10 more this summer than last year, and that the increase in gasoline prices does not add much to the cost of a typical vacation trip.

Total gasoline costs for a 1,000-mile trip are about $90 for a car that gets 25 miles per gallon. By comparison, AAA said that a family of four would spend an average of $247 per day for food and lodging. The cheapest state is Nebraska, which costs $184 for lodging and food per day. The most expensive state is Hawaii at $517.

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