Gas Prices Will Drop Through End of Year, AAA Says

AAA estimates the national average price of gasoline will slowly drop through the end of the year and average between $3.20-3.40 a gallon by New Year’s Day.

Gas prices dropped about 50 cents a gallon on average from September through early December, but remain at record highs for this time of year.

AAA does not expect gas prices to have a major impact on travel volume, but consumers could have more money to spend on holiday shopping, dining and entertainment if prices drop through December as expected.

AAA projects 93.3 million Americans will journey 50 miles or more from home during the year-end holidays -- an increase of 1.6 percent over the 91.8 million people who traveled last year.

This increase brings holiday travel figures to within half a million of the decade-high mark seen during the 2006/2007 season.

The year-end holiday travel period is defined as Saturday, Dec. 22 to Tuesday, Jan. 1, 2013.

Highlights from AAA 2012/13 Year-End Holiday Travel Forecast include:

• Year-end holiday travelers to total 93.3 million, an increase of 1.6 percent from the 91.8 million that traveled last year
• Ninety percent of travelers (84.4 million) to travel by automobile, representing 26.7 percent of the total U.S. population
• Holiday air travel expected to increase 4.5 percent to 5.6 million travelers from 5.4 million in 2011
• Median spending expected to increase almost 6 percent to $759, compared with $718 in 2011 with transportation costs consuming about 29 cents of every travel dollar.
• Average distance traveled to increase to 760 miles round-trip from 726 miles, an expected result with an increase in air travelers
• Travel volumes for the year-end holidays are generally very stable; only once in the past decade has there been a change in travel volume greater than 5 percent

“The year-end holiday season remains the least volatile of all travel holidays as Americans will not let economic conditions or high gas prices dictate if they go home for the holidays or kick off the New Year with a vacation,” said AAA President and CEO Robert Darbelnet. “Primary economic indicators all show modest improvement from last year and AAA is projecting an increase in the number of Americans stuffing their stockings with airline tickets and hotel reservations.”

“As we enter the New Year, one unknown for travel is the looming ‘fiscal cliff’ and the resulting uncertainty related to near-term tax and benefit changes.  Having these items unresolved complicates many travelers’ ability to develop an accurate household budget as they plan for future spending and saving decisions. It is important that Congress and the president work together to quickly resolve the situation for the good of the nation,” said Darbelnet.

Impact of gasoline prices on travel plans

AAA estimates the national average price of gasoline will slowly drop through the end of the year and average between $3.20-3.40 a gallon by New Year’s Day. Gas prices dropped about 50 cents a gallon on average from September through early December, but remain at record highs for this time of year. AAA does not expect gas prices to have a major impact on travel volume, but consumers could have more money to spend on holiday shopping, dining and entertainment if prices drop through December as expected.

Automobile travel remains dominant mode of transportation, air travel increases

Approximately 90 percent of travelers (84.4 million) plan to travel by automobile this holiday season. This is a 1.3 percent increase over the 83.3 million people who traveled by auto last year.  Air travel is expected to increase 4.5 percent as 6 percent of travelers or 5.6 million will take to the skies.

Those traveling by air will find lower airfares, according to AAA’s Leisure Travel Index. For the year-end holiday period the average lowest round-trip rate is $203 for the top 40 U.S. air routes, a 3 percent decrease from last year. Approximately 3.3 million travelers will choose other modes of transportation, including rail, bus and cruise ship.

Hotel rates to increase slightly, car rental rates increase 41 percent

According to AAA’s Leisure Travel Index, year-end holiday hotel rates for AAA Three Diamond lodgings are expected to increase 2 percent from a year ago, with travelers spending an average of $129 per night compared with $126 last year. Travelers planning to stay at AAA Two Diamond hotels can expect to pay 3 percent more, at an average cost of $95 per night. Daily car rental rates will average $56, compared with $40 last year.

Average travel distance increases

According to the survey of intended travelers, the average distance traveled by Americans during holiday period is expected to be 760 miles, farther than last year when travelers planned to log 726 miles.

Median spending up nearly 6 percent; top activities are dining and spending time with loved ones

Median spending is expected to be $759, a 6 percent increase compared with the expected median spending of intended holiday travelers ($718) last year.

Dining (67 percent) and spending time with family and friends (66 percent) and are the most popular activities planned by travelers. It is not surprising that during holiday season shopping is the third most popular activity with 57 percent expecting to shop. More than one-third (34 percent) of holiday travelers plan to sightsee during their trips.

AAA offers digital travel planning resources

AAA’s digital tools for travel planning "on the go" include eTourBook guides for 101 top North American destinations, available free to members at AAA.com/ebooks. Choose from city titles, like the award-winning Las Vegas; regions, like Wine Country, and National Parks.

The free AAA Mobile app for iPhone, Android and iPad uses GPS navigation to help travelers map a route, find current gas prices and discounts and access AAA roadside assistance. Travelers can learn about the AAA Mobile app and AAA Mobile Web at AAA.com/mobile.

On AAA.com, travelers can find thousands of AAA Approved and Diamond Rated hotels and restaurants using AAA’s TripTik Travel Planner or the searchable Travel Guides at AAA.com/Travel. Every AAA Approved establishment offers the assurance of acceptable cleanliness, comfort and hospitality, and ratings of One to Five Diamonds help travelers find the right match for amenities and services.

AAA’s projections are based on economic forecasting and research by IHS Global Insight. The Colorado-based business information provider teamed with AAA in 2009 to jointly analyze travel trends during the major holidays. AAA has been reporting on holiday travel trends for more than two decades. The complete AAA / IHS Global Insight 2012/13 Year-end Holiday Travel Forecast can be found here.

As North America’s largest motoring and leisure travel organization, AAA provides more than 53 million members with travel, insurance, financial and automotive-related services. Since its founding in 1902, the not-for-profit, fully taxpaying AAA has been a leader and advocate for the safety and security of all travelers. AAA clubs can be visited on the Internet at AAA.com.