In the heart of summer takes place arguably the most American of all holidays, Independence Day. With students now on break from school, many Americans will take advantage of the July 4th weekend to travel and most will do it by means of our nation’s highways. As Americans have increased their tolerance for spending in recent years, it is interesting to see how 2014 compares to years past and what has changed among people’s travel preferences. By analyzing trends in factors such as consumer spending and gas prices, we can get a better sense of how travel during one of summer’s biggest holidays has evolved.
Per AAA’s Independence Day Travel Forecast, an estimated 34.8 million people will choose to get away by driving 50 miles or more from home during the period between July 2nd and July 6th, the highest figure in seven years. Including air travelers, the number of people taking trips during the Independence Day weekend is expected to reach 41 million, a 1.9 percent increase over last year. This will mark the fourth time travel volume has increased during the July 4th celebration out of the last five years and this year is projected to be over six percent higher than the last 10 years, on average.
As opposed to income growth driving consumer spending, it is an increase in credit that is leading to more people to travel over the holiday. That means consumers have relaxed their spending habits over time after having tightened their wallets during the midst of the recession. This change in mindset is also captured with regards to gasoline prices in June 2014’s edition of NADA Perspective, which reviews the market for hybrid electric vehicles. Between 2011 and 2013, the cost for fuel averaged $3.55 per gallon and was relatively volatile at 13 cents per month as both figures grew to three times that which was recorded in the 1990s and early 2000s. Despite an initial jump in hybrid demand resulting from high sensitivity to gas prices, the market has softened as consumers gradually adjusted their expectations and household budgets in the face of rising fuel costs.
Both a willingness to utilize credit in addition to consumers’ reduced sensitivity to high gas prices are underlying factors contributing to the higher travel volume expected over the weekend. This is significant because AAA predicts the upcoming Independence Day will see the majority of U.S. drivers pay more for gas than they have in the last six years. The national average cost of fuel is currently 20 cents per gallon higher than it was last July 4th, when it was $3.48 per gallon, as a result of the conflict in Iraq negatively affecting crude oil costs. Instead of causing many consumers to modify their travel plans, however, a reduction in activities such as shopping or dining could be exhibited.
Now that the recession is further in the back of people’s minds, Americans are beginning to shift their priorities and adjust their lifestyles accordingly. While the cost of travel is higher this Independence Day, people are now favoring the utility gained from summer travel after years of cutting back. Regardless of the economic conditions, though, sometimes you need to live a little and taking a nice summer road trip is surely a great way to do so.