Travelers are still pumped to gas up and go
Despite high cost of fuel, drivers likely this weekend to hit road in record numbers
Though gasoline prices are expected to be the highest ever for a Memorial Day holiday, the official start to the summer vacation season, travelers plan to hit the road in record numbers this weekend, according to AAA Mid-Atlantic.
Whether there's a correlation between gas price increases and vacation travel has been the subject of several studies that reached differing conclusions. An academic study published in 2002 directly linked higher gas prices to lower hotel bookings, but the hospitality and leisure division of PricewaterhouseCoopers recently concluded that there is little, if any, correlation. A difference of 40 cents a gallon in gas prices would mean only $10 more for a family driving 500 miles in a car getting 20 miles per gallon, the PwC study noted.
"There's an anxiety and anger by consumers at the pump," said Bjorn Hanson, an analyst with PricewaterhouseCoopers. "'I just filled my tank and it's $24 when it should be only $16.' Consumers are aware of it and it's on their minds, but it's generally not affecting their behavior."
About 506,000 Marylanders, or 86 percent of those with travel plans, expect to drive 50 or more miles this weekend, according to a survey by AAA Mid-Atlantic. That's about the same number who made a road trip last year. About 60,500 more plan to fly, a 3.9 percent increase from last year.
Nationally, AAA estimates that 31.1 million travelers expect to drive, a 2.2 percent increase from the 30.5 million who drove last year. Also, 4.2 million plan to travel by airplane, up 3.2 percent from last Memorial Day weekend. That doesn't mean travelers aren't thinking about rising gasoline prices. While travel experts expect people to make trips, they say some might restrain their spending. That could mean fewer splurges on high-end dinners, no expensive shopping sprees and shorter hotel stays.
"They're budgeting gas prices into their plans," said Amanda Knittle, a spokeswoman with AAA Mid-Atlantic. "They will maybe look for more inexpensive restaurants and cheaper places to sightsee to compensate for some of the other higher costs."
In Maryland, the cost of a gallon of gasoline has dropped by 14 cents a gallon from its all-time-high of $2.27, reached April 12. Many people headed to lunch in downtown Baltimore this week said traffic, not gas prices, would be a reason to keep them off the roads this weekend.
"It sounds scary with gas being over $2, but once you do the math it really doesn't cost that much more," said Dennis Castleman, Maryland assistant secretary for tourism, film and the arts. "I'm not an advocate of high gas prices, but I don't think they're high enough to take people away from their traditional travel time. That is one of the last things we'll see people want to give up."
Jessica Sincavage, 26, an economist who lives in Washington, said she plans to make a weekend trip to Rehoboth Beach, Del., despite cringing every time she fills the tank of her Honda Prelude. "It's not that far away, so it's not that big of a deal," Sincavage said yesterday.
Some hotel chains and resorts are offering travelers gas rebates as an incentive to book a room, continuing a trend that began a few years ago. Days Inn is giving AAA members who stay two nights anytime between April 1 and Sept. 15 a $10 gas card. Hotels.com will give travelers who stay at least two nights a rebate for up to $30 for gas.
Railey Mountain Lake Vacations in Deep Creek will give gas vouchers to vacationers who stay at the rental properties through June 12, excluding Memorial Day weekend.
"This is something that worked phenomenal because gas prices have gone through the roof," said Jodi Taylor, head of marketing and advertising for the company, which also offered the vouchers last year.
But hotel operators aren't necessarily offering gas incentives because they're worried that people won't come.
"We're seeing advanced bookings very strong," said Peter Strebel, executive vice president and chief marketing officer for the Cendant Corp. Hotel Group, the owner of Days Inn. "To me, weather is a bigger problem than gas prices."
Mary Jo McCullough, president of the Maryland Hotel & Lodging Association, said families consider getaways too important to be affected by gas price fluctuations. "It's now as much a part of their everyday existence as food," she said.
Hanson, of Pricewaterhousecoopers, said that a psychological effect from high gas prices makes consumers want to drive less, but that it is small. In the 1980s, there was a negative correlation between gas prices and lodging, but PricewaterhouseCoopers found it had to do more with the recession than gas costs.
In 2002, the Center for Hospitality Research at Cornell University reported it found that a 1 percent increase in gasoline prices results in a drop in room demand of 1.74 percent. The study examined monthly room data from 1988 to 2000.
But in that study, the Cornell researchers found that demand at resort-type hotels increased in some periods when gas prices rose, even as demand for lower-priced and highway lodging declined.
Hotels along highways and outside of metropolitan areas depend more on automobile access. Travelers who frequent resorts might do so to minimize transportation costs, the study theorized. The study did not look at what it called "consumer spending variables" such as income levels and whether the purpose of travel was vacation or business.
A study conducted for the National Retail Federation by BIGresearch found that 31.2 percent of people would spend less on vacation and travel because of prices at the pump, though it didn't determine whether people were cutting back on travel or not traveling at all. People earning less than $50,000 were likely to feel the impact more than those earning more.
Eddie Strickland, a 54-year-old Baltimore retiree, said he plans to drive to North Carolina to visit family this weekend, in spite of the cost to fill up his tank.
"I'll just make up the money some other way," he said.