A record 71 million people will travel this coming long weekend, a growth curve similar to that seen before the pandemic.
High fuel prices and the threat of a hurricane are unlikely to dampen Americans’ desire to travel as vacationers prepare for record numbers of trips to kick off the Fourth of July Independence Day celebrations.
The AAA motorists’ association expects a record number of nearly 71 million people to travel around the US Independence Day – a growth rate that is consistent with pre-pandemic levels.
According to the AAA forecast, about 60 million people will travel to their destinations by car and nearly 6 million by plane, while about 4.6 million people will use buses, trains or cruises during the holiday season.
“We have never seen numbers like this,” said AAA spokesman Andrew Gross. “Travel numbers in 2024 appear to be similar to those in 2020 had the pandemic not occurred.”
Summer travel patterns in the United States will be closely watched from several angles this year, as they could provide central bankers and policymakers with an important indicator of consumer sentiment in an election year.
Despite rising consumer spending, inflation remained unchanged in May, fueling hopes that the Federal Reserve could manage to bring inflation under control while avoiding a recession.
Gasoline prices have been falling in recent months. The national average price for a gallon of fuel was $3.50 ($0.92 per liter) on Tuesday, down three cents from a year ago. Domestic flights are two percent cheaper than a year ago. A round-trip domestic flight costs an average of $800, according to AAA booking data.
“Wanderlust”
Despite recent declines, fuel prices remain well above historical levels. The average price for a gallon of gasoline was $2.74 ($0.72 per liter) during the week of July 4, 2019, and the weekly average price from 2015 to 2019 was less than $2.50 per gallon ($0.66 per liter), according to data from the U.S. Energy Information Administration.
Nevertheless, vacationers’ travel plans remain largely unaffected by higher prices this year, according to a survey of more than 1,000 people conducted by the auto trading group American Trucks.
Average gasoline demand in the U.S. hit a one-year high of 9.2 million barrels per day (bpd) last week on a four-week average as retailers stocked up ahead of the holidays, EIA data showed Wednesday. Average jet fuel demand was 1.7 million bpd on a four-week average, on par with a seven-month high reached in early June.
“We’ve noticed that it’s the speed of change that’s affecting the consumer psyche rather than the price itself,” said John LaForge, head of real asset strategy at Wells Fargo Investment Institute.
Since the price of gasoline has neither risen nor fallen dramatically in the past six months, the consumer psyche has been largely unaffected, LaForge said.
Holiday travel in the USA is not expected to be affected by Hurricane Beryl for the time being. It has caused devastating damage on some Caribbean islands since Monday, but is expected to be significantly weakened by the time it reaches the Mexican Yucatan Peninsula on Thursday evening.
In addition, fuel stocks in the US are better filled than in previous years. This protects drivers against sudden price shocks if the hurricane disrupts refinery operations.
“There’s no denying that Americans are optimistic and keen to travel,” said GasBuddy analyst Patrick De Haan.
