AAA Travel projects 41 million Americans will journey 50 miles or more from home during the Independence Day holiday weekend, a 1.9 percent increase from the 40.3 million people who traveled last year and a nearly 14 percent increase compared to the Memorial Day holiday weekend.
The majority of travelers will be celebrating their freedom with a road trip, with more than eight in 10 (34.8 million) choosing to travel by automobile, the highest level since 2007. The Independence Day holiday travel period is defined as Wednesday through Sunday.
“With school out for summer, the Fourth of July holiday is typically the busiest summer travel holiday,” said Mark Jenkins, spokesman for AAA – the Auto Club Group. “About 5 million more Americans travel for this holiday compared to Memorial or Labor Day weekends. Traditionally, the majority of those celebrating our nation’s independence take a road trip.”
Travel volume for Independence Day has grown four out of the past five years and is expected to be more than six percent higher than the average of the past 10 years.
Willingness to take on credit card debt, not an increase in income, is responsible for the increase in consumer spending that is spurring the rise in overall travel.
Nearly five million more Americans are expected to travel for Independence Day than for Memorial Day.
Holiday air travel is expected to increase 1 percent to 3.1 million travelers from 3.07 million last year.
Travelers will encounter airfares 5 percent lower than last year and car rental costs that remain consistent with last year at $58.
Hotel rates at AAA two diamond hotels are 15 percent higher than last year and three diamond hotels are 9 percent more.
“Steady improvement in the economy along with increased consumer spending and confidence are the main factors driving more Americans to take a trip, Jenkins said. “Consumer spending is expected to rise 4.2 percent, because of increasing credit not rising incomes. Consumers have been hesitant to add to their credit card balances the past several years, but continued improvements in the employment picture and rising home values means they are starting to feel more comfortable taking on debt.”
About 85 percent of holiday travelers prefer to drive to their destination. Nationally, AAA forecasts there to be 34.8 million automobile travelers – a 2.2 percent increase from last year and the highest volume in seven years (35.1 million in 2008).
“Consumers are still mindful of their personal finances,” said Jenkins. “Auto travel is the best option for controlling expenses. It allows travelers the most flexibility in trip length and the option of making last minute changes.”
AAA expects the majority of U.S. drivers likely will pay the highest gas prices for Independence Day since 2008. Today’s national average price of gas is 20 cents per gallon more expensive than the average on July 4, 2013, which was $3.48 per gallon. In recent years gas prices have declined in the weeks leading up to Independence Day, but this has not happened this summer due to high crude oil costs resulting from violence in Iraq.
“Current gas prices are still cheaper than this year’s peak price and unlikely to deter people from traveling,” Jenkins said. “Many travel plans have already been made, and budgets set aside. In some cases, consumers will reallocate their budgets and cut back on dining, shopping or other trip activities.”
Nearly 7.6 percent of travelers will fly to their destination. That is roughly even with last year’s share, but significantly higher than the 4.8 percent of travelers who flew in 2009 following the economic downturn. Holiday air travel has slowly increased since 2011, even as income growth has stagnated. Automobile remains the preferred mode of transportation due to flexibility and increased airfares.
According to AAA’s Leisure Travel Index, hotel rates for AAA three diamond lodgings are expected to increase 9 percent from one year ago with travelers spending an average of $178 per night compared to $164 last year. The average hotel rate for AAA two diamond hotels has risen 15 percent with an average cost of $137 per night.
Weekend daily car rental rates will average $58, the same as last year. Airfares have declined five percent with the average round-trip, discounted fare for the top 40 U.S. routes costing $215, down from $228 last year.