Travel for the U.S. Independence Day holiday is expected to rise to record levels this year as inflation on airfare, gasoline and hotel prices eases.
The American Automobile Association (AAA) is expecting record numbers of people on roads and at airports in the week between Saturday, June 29 and Sunday, July 7. The organization estimates that some 70.9 million people plan to travel, the most since the pandemic.
The forecast comes amid broader concerns that consumers are spending less on non-essential items, a key factor in a slow-growing economy. Inflation has eased significantly from levels it reached in 2022, notably on the cost of travel and vacations.
“With summer vacation in full swing and the flexibility to work remotely, more Americans are taking extended trips around Independence Day,” said Paula Twidale, senior vice president of AAA Travel.
The forecast, along with encouraging figures from the cruise industry, bodes well for a sector that is often hurt when consumers stop spending on non-essential products or services.
A record number of people have passed through the country’s airports this summerThe U.S. Transportation Security Administration recorded nearly 3 million people at U.S. airports on June 23, an all-time high. The agency expects the number of travelers to surpass 3 million at some point during the July 4 holiday.
Consumers continue to face inflationary pressures on a wide range of products, but travel costs, such as airfare and hotel stays, have dropped significantly compared to a year ago.
Hotel room rates were 1.2 percent lower in May compared with a year ago, according to government inflation figures. Those costs have been trending downward since the start of the year.
The gasoline priceswhich have a big impact on consumers’ budgets, are generally down from a year ago. Regular gasoline prices are now averaging $3.51 a gallon, down 2 cents from a year ago, according to AAA.
The companies that will benefit most from high travel demand this summer will likely be Delta Air Lines, American Airlines, Marriott and Hilton, according to Morgan Stanley. Still, “the rising tide of demand should lift all boats,” the report said.
Cruise companies are also emerging as winners. Carnival recently raised its profit forecast for the year and noted that 2024 bookings were the highest in its history, both in terms of price and occupancy.
It said customer deposits hit an all-time high of $8.3 billion in the second fiscal quarter and it estimates capacity will expand by 4.8% in 2024. Competitor Royal Caribbean has also raised its forecast for the year.
Connect with the Voice of America! Subscribe to our channels Youtube, WhatsApp and to newsletter. Turn on notifications and follow us on Facebook, X and Instagram.
Add Comment