US Labor Day travel to rise despite gasoline prices, hurricane

31 August 2012 18:58  [Source: ICIS news]

Freeway trafficHOUSTON (ICIS)--The number of Americans travelling by automobile for the US Labor Day holiday weekend should remain high despite recent gains in gasoline prices and the impact of Hurricane Isaac, analysts said on Friday.

US automobile organisation AAA has forecasted that 33m Americans would travel 50 miles (80 km) or more from their home during the US Labor Day holiday weekend. This is an increase of 2.9% over the 32.1m travelers during the 2011 holiday weekend.

The Labor Day holiday travel period is defined as Thursday, 30 August, to Monday, 3 September. 

Furthermore, the number of travellers is expected to reach a post-recession high, according to the AAA.

Despite higher gasoline prices and Hurricane Isaac hitting the US Gulf coast region, analysts said they think that the AAA number will still hold up.

“I think AAA will be accurate. Maybe they will miss the original mark but we will not see a wholesale drop,” said Phil Flynn, analyst with Price Futures Group.

“This hurricane’s aftermath was unlike the demand destruction after Hurricane Katrina when nobody was moving. Even though Louisiana got hit hard in some areas, people are going on with their vacation,” he said.

Flynn added that he only expects people to cancel plans if their areas were directly affected by the storm.

As for refinery output and supply following the hurricane, Flynn said that despite some sites being shut down for some time after the storm and the potential problems with start up, most of the country will go on with their lives like normal.

“I don’t think it will be demand destruction event people are worried about,” he said, adding that maybe the numbers will be a bit shy of original predictions.

According to Cynthia Brough, AAA’s director of public relations, the organisation does not expect its forecast to change.

“Historically, regional events like tropical storms and hurricanes have impacted travel in the affected region but not on travel nationwide,” she said. “Many Americans confirm and even prepay their holiday travel well in advance so they will monitor conditions and continue with their plans if possible.

“However, last-minute or impromptu travel decisions could be impacted by weather or rising gas prices but these travellers are not counted in the AAA Labor Day travel forecast data,” Brough said.

Flynn agreed, saying the higher gasoline prices won’t have a big impact on travel.

“People have resigned to the fact that prices will be high. They were already facing high prices when AAA did their survey,” he said.

The higher retail gasoline prices could lead to cutbacks in other spending during travel, according to Patrick DeHaan, analyst with GasBuddy.com.

I believe that temporarily higher prices won’t negate or alter a significant portion of the travelling public this weekend,” DeHaan said. “Higher prices may mean less consumption where possible, or a drop in other discretionary spending during the holiday weekend.”

Furthermore, Flynn said that with the state of the economy for the past few years, there is some pent up demand for a vacation, and that will boost the travel numbers for the Labor Day weekend.

“We did see a slight improvement in the economy recently, but people have come to grips with fact that things are slow now,” he said.

Current average price

Week ago average

Month ago average

Year ago average


$3.829/gal

$3.730/gal

$3.521/gal

$3.617/gal

(Source: AAA’s national average price for regular retail gasoline.)

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By: Anna Matherne
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