(Bloomberg) —
Most Read from Bloomberg
Kristin Herman and her partner had been planning a European getaway with stops in Paris and Rome, but with the US economy suddenly wobbling, the couple instead drove to Oregon’s nearby redwood forests and Cannon Beach — even camping some nights to save on hotels.
“It didn’t feel like the right time to spend so much money,” said Herman, a 37-year-old who lives in Portland and works as an educator at Academized.com. “Especially when groceries and rent got more expensive as well.”
As President Donald Trump’s global trade war rattles consumer confidence and threatens to reignite inflation, US travelers are increasingly opting for road trips over flights. About 39.4 million Americans will drive this Memorial Day weekend, up 3.1% from last year and the most in 20 years, according to the American Automobile Association. Some 3.61 million people plan to fly, only a 1.7% gain.
Adding to the allure of road trips, oil prices have dropped to near a four-year low, pushing down gasoline costs. The national average pump price was about $3.14 a gallon Friday, almost 50 cents a gallon cheaper than a year earlier, AAA data show. US gasoline prices will remain at roughly that level in the second and third quarter, the Energy Information Administration projects.
Meanwhile, domestic flights are 2% more expensive this Memorial Day weekend compared to the same period last year, with an average round-trip ticket costing $850, the AAA said. That’s being driven partly by bargain airlines moving upscale and raising fares. Concerns surrounding airplane safety in light of a few high-profile incidents are also giving travelers pause. The turmoil has led several US airlines to withdraw their full-year earnings forecasts.
Beyond the pricing factors, recent stock market volatility pushed nearly 68% of travelers to alter their vacation plans, from paying upfront to counteract a weakening dollar to canceling altogether, data from travel tech company Histoury shows.
For Julie Brinkman, Americans’ rapidly changing travel plans remind her of the shift during the sweeping flight restrictions and lockdowns to fight Covid-19 in March 2020. Travelers are increasingly opting for destinations like the Gulf Coast, Gold Coast and Smoky Mountains over overseas markets, said Brinkman, chief executive officer of Beyond, a revenue manager for vacation rentals.
