22 December 2011 17:58 [Source: ICIS news]
HOUSTON (ICIS)--The number of people travelling during the US holiday season this year will approach a decade high, largely because of lower gasoline prices and a stronger economy, an analyst said on Thursday.
“Year-end gasoline prices in the US continue to be at their lowest level this year since February,” said independent oil analyst Bob van der Valk. “Prices continue to slide despite an increase in crude oil costs.”
The average retail price in the US is $3.216/gal, down from $3.340/gal a month earlier, according to automobile group AAA’s Fuel Gauge Report. This is about 77 cents/gal lower than the peak price for 2011.
AAA forecasts travel volume during the 2011-2012 holiday season to be the second highest in the past decade.
“It’s a positive sign for the travel industry that so many Americans are planning to travel this holiday season, collectively attributing to the second-highest year-end holiday travel volume in the past 10 years,” said Bill Sutherland, vice president of AAA Travel Services.
AAA forecast 91.9m Americans will travel at least 50 miles (80km) from home during the travel period of 23 December to 2 January, an increase of 1.4% year on year.
Automobile remains the top choice for transportation during the holiday as AAA predicts 83.6m Americans to drive, up 2.1% year on year. This year’s projection is just 100,000 less than the peak travel season of 2006-2007, which saw auto travel at 83.7m.
“Both holidays (Christmas and New years) fall on a Sunday, giving all kinds of opportunities for three-day weekends to be used for travelling to family and amusement parks,” said van der Valk.
Analyst Phil Flynn with PFGBest said the economy is improving, though it is far from normal.
“Most likely we’re going to see the US economy improve next year, as we’re already seeing some signals of growth,” Flynn said.
US automobile group AAA attributes increased travel to a stronger economy, particularly the expected growth of 1.5% for real gross domestic product (GDP) in the fourth quarter of 2011 compared with 2010. A month ago, the predicted increase for the US GDP was 1.3%.
“Bottom line though, it’s all about economy and consumer confidence,” said Purvin & Gertz analyst Stephen Jones.
AAA’s survey showed 59% of intended travellers said the economy has had no impact on their travel plans or has improved their situation. The remaining group, 41% of intended travellers, pared their travel plans in response to the economy.
“There’s the people that say, ‘I’m going to see grandma whether economy is good, bad or indifferent and I’m going to drive to get there’,” said Flynn. “And some people will look at the economy getting better and not only go to grandmas but say, ‘Let’s go drive around and look at the Christmas lights as well’.”
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