Gas prices dip, more vacation travel expected

As average U.S. retail gas prices continue moving lower, Arkansas travelers hitting the road on the Memorial Day weekend should expect congested highways, crowded hotels and an occasional overbooked vacation destination.

According to AAA’s annual Memorial Day travel survey, 34.8 million Americans will travel 50 miles or more from home this holiday weekend beginning May 25, the traditional kickoff of the summer driving season. That means more than 500,000 additional travelers (1.2%) will be on the road or flying to their holiday destination than a year ago.

"The overall domestic economic picture continues to improve slightly, however, American consumers faced a new challenge this year as steadily increasing gas prices throughout the spring significantly squeezed many household budgets," AAA President and CEO Robert Darbelnet said in a statement. "Americans will still travel during the Memorial Day holiday weekend but, many will compensate for reduced travel budgets by staying closer to home and cutting entertainment dollars."

In Arkansas, State Tourism Director Joe David Rice said his department is expecting “a great Memorial Day weekend,” citing the improving economic conditions, great weather and excellent water levels at Arkansas area lakes and rivers.

“I think the American mood is better than it was last year,” Rice said. “It is a good time for us; I think we have a lot of factors working in our favor.”

MUSEUMS AND MOUNTAINS
Rice said many of the state’s top tourist destinations and outdoor venues will be brimming with Arkansas travelers and out-of-state tourist during the Memorial Day weekend, adding that he was especially excited about the reopening of the renovated Mather Lodge at Petit Jean State Park and brisk ticket sales at the Crystal Bridges Museum in Bentonville.

“Attendance at the Crystal Bridges has been double what was projected,” Rice said, praising Wal-Mart heiress Alice Walton for her philanthropic contribution. “It is paying big dividends for the Bentonville area and the entire state of Arkansas.”

And in light of current gas prices, Rice said state Department of Parks and Tourism recently unveiled its “More Fun Per  Gallon” marketing campaign, aimed at highlighting affordable family vacations and inexpensive getaways in Arkansas.

The campaign’s website includes a gas calculator that computes the fuel costs to an Arkansas vacation destination, and “one tank” travel ideas across the state. The portal also has discounted deals on state lodging, outdoor activities and weekend travel escapes.

LOWER FUEL PRICES
Also, the U.S. Energy Information Administration said in its weekly petroleum report that average retail gasoline prices across the country have declined for the sixth straight week, despite seasonal highs in early spring when motorists were shocked by price increases for all but four days in February and March.

EIA data shows that pump prices fell for 23 of 30 days during April, helping to break a streak of 911 days since the national average price was lower than the previous year.  Overall, the U.S. average retail price of regular gasoline decreased 4 cents this week to $3.75 per gallon, 21 cents per gallon lower than last year at this time.

And with crude prices on the New York Mercantile Exchange sliding this week to a five-month low near $93 a barrel, the EIA lowered the average regular gasoline retail price forecast for the current April-through-September summer driving season to $3.79 per gallon, 16 cents below  its earlier forecast.

In Arkansas, pump prices are averaging about $3.40 for a gallon of regular unleaded, down about 30 cents from a month ago. Prices in the state’s metropolitan areas range from a low of $3.36 per gallon in the Fort Smith area to a high of $3.53 per gallon in Little Rock/North Little Rock area, according to AAA’s daily fuel gauge.

Motorists in the Fayetteville-Springdale-Rogers area are paying around $3.37 per gallon fill up their tanks. Big rig drivers and other diesel fuel users are paying about $3.88 a gallon, about 20 cents lower than a year ago.

Local travelers driving to destinations in surrounding states will see pump prices similar to those in Arkansas. Average retail prices in Missouri and Oklahoma are a few pennies cheaper at $3.41 and $3.40 per gallon, respectively. Pump prices in Mississippi and Texas are a bit higher at $3.43 and 3.52, respectively for a gallon of regular unleaded. Retail gas prices in Tennessee are the same as Arkansas at $3.40 per gallon.

TRAVEL CHOICES
Meanwhile, fewer U.S. travelers are expected to travel by airplane to their vacation destination during the Memorial Day weekend. More than 2.5 million leisure air travelers (over seven percent of holiday travelers) will fly during the holiday weekend, a 5.5% decrease from last year's 2.7 million air travelers, the AAA said. The remaining 4.5% of holiday travelers are expected to travel by other modes of transportation, including rail, bus and watercraft.

Another vacation survey by American Express says the tough economy and high retail gas prices over the past few years have changed the consumer mindset. Of the 140 million Americans (59%) planning some type of summer vacation this year, nearly half of them are seeking “more meaningful experiences and say they will immerse themselves in the culture and heritage of their destination,” the survey said.

"Consumers want deeper, richer experiences when they travel," said David Patron, vice president of American Express Travel. "When a traveler visits a destination they want to understand the local traditions and feel like they are getting a true insider experience."

To get that experience, more Arkansans and U.S. vacationers plan to travel over holiday weekends this summer, such as Memorial Day, Fourth of July and Labor Day. Twenty five percent of the travels in the America Express survey said they were planning three or more short weekend trips throughout the summer. 

TRAVEL AND INCOME
And the growth in Memorial Day holiday travel can be tied, in part, to a change in the income demographics of travelers compared to last year, the AAA survey said.  In 2011, the share of expected holiday travelers in the under $50K household income bracket fell five percent, from 31% to 26%. The share of expected travelers in the $50K-$100K household income bracket dropped one percent. Conversely, the share of travelers with household incomes over $100K increased from 30% to 36%.

“The effect of higher gas prices is more significant on lower income households as fuel costs make up a larger share of overall spending,” the AAA said.

Vacationers surveyed by American Express said they expect to spend an average of $1,180 per person, on par with 2011. Forty-two percent are keeping costs down by driving to their destinations, with 69% planning to travel by car.

Even though most American Express travelers consider driving to be more cost effective than flying, almost half acknowledged that rising gas prices will affect their driving plans. Still most admit that they are willing to shell out a few more dollars before they leave the car at home.

“Americans sticking to their current driving plans say they'll tolerate an average of $5.00 per gallon before they'll be forced to reduce their driving,” the survey said.