Cut

High gasoline prices to cut July 4 travel: AAA

Reuters News
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Posted: Jun 22, 2011 4:58 PM
High gasoline prices to cut July 4 travel: AAA

By Selam Gebrekidan

NEW YORK (Reuters) - U.S. Independence Day holiday travel will fall 2.5 percent from a year ago as expensive gasoline eats at driving demand, travel group AAA forecast on Wednesday.

Even with the recent decline in gasoline prices, AAA estimates 39 million Americans will travel 50 miles or more from home during the July 4 weekend, down from 40 million last year.

Of these, some 32.8 million, or 84 percent, will drive to their vacations -- a million fewer than last year. (Graphic: http://link.reuters.com/cek32s )

AAA said a $1 increase in gasoline prices from last year, expected to average $3.74 a gallon during the holiday weekend, would be the main factor keeping U.S. motorists off the road.

U.S. gasoline prices peaked on May 5 at $3.9845 a gallon, according to daily price data from AAA.

Despite the decline in overall travel, slightly more than 3 million people will fly over the holiday weekend, a 9 percent increase from last year's 2.75 million air travelers, according to the travel group.

The forecast, based on an ongoing survey of 50,000 U.S. households, could indicate the weakest summer driving demand since 2009, when the financial crisis forced Americans to stay put.

AAA said higher gasoline prices will be more painful in lower-income households this year. Only 33 percent of households with annual income of $50,000 or less will travel this holiday weekend, compared to 41 percent last year.

The price hike is not limited to the pump. Airfares will be 11 percent more expensive and hotels are hiking rates on their rooms, according to AAA.

(Reporting by Selam Gebrekidan; Editing by David Gregorio)