Thursday, May 24, 2007

Gas prices on the rise, $3.50 a gallon looming at the pumps

Commercial car in Hamburg, Germany. Sue Frause photo.
With a busy summer travel season predicted, a new travelhorizons™ survey co-authored by the Travel Industry Association and Yesawich, Pepperdine, Brown & Russell examined the impact of escalating gasoline prices on the travel intentions of Americans.

The results reveal that Americans remain upbeat about their travel plans even as the price at the pump continues to rise. They also reveal the “tipping point” for the majority of Americans is likely to be $3.50 per gallon, at which price the slight majority of travelers state they would reevaluate their summer travel plans.

“The good news is that we expect more travel this summer,” TIA president and CEO Roger J. Dow said. “But if prices rise above $3.50 per gallon, it appears that many Americans may change their travel plans.” Here are highlights of the survey:

  •  Leisure travelers are planning to take slightly more trips this summer than last (1.8 versus 1.6);
  •  9 out of 10 (87%) leisure travelers expect gasoline prices to rise this summer;
  •  The price per gallon at which the majority of American leisure travelers state they would “change their vacation plans” is $3.50. Fully 6 out of 10 (61%) leisure travelers say they would change their vacation plans if the price at the pump reaches $3.75 per gallon;
  •  When asked how their plans would change, the most frequently mentioned responses were “take fewer trips this summer” (35%) and “cancel my trip” (31%). One out of four (26%) leisure travelers said “drive a shorter distance” or “postpone my trip until the price of gas comes down;”
  •  Fully 16% of leisure travelers said they would not alter their summer vacation plans regardless of the price of gasoline.
The national survey of 1,546 leisure travelers was conducted in March 2007, and the estimated margin of error is +/-2.2% at the 95% confidence level. 

UPDATE: Since posting this, the Travel Industry Association is no longer an organization, and the link to the above survey is not working. The U.S. Travel Association is now one of the key players in the US travel industry.

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