USTA says reduced travel could hurt overall economy
A new survey by the U.S. Travel Association indicated that if the price of fuel continues to rise, travelers are likely to alter their summer vacation plans.
"If travelers are spending more on gas, they are spending less on hotels, attractions, shopping and restaurants, which could have a negative impact on our overall economy," said Roger Dow, U.S. Travel's CEO. "We need to find solutions that reduce the burden which rising gas prices are placing on everyday travelers."
The study found that for vacationers planning to travel by car this summer, 54% said that an increase in gas prices would affect their summer leisure travel plans.
About one-quarter (26.8%) of business travelers said that an increase in gas prices would affect summer business plans.
The data indicated that 44% of vacationers traveling by car said that an increase in gas prices would cause them to take fewer trips this summer, while 19% of business travelers using a car would take fewer trips.
"There is a very real probability that if gas prices continue to climb, Americans will change and reduce their travel plans, which would work against the positive economic momentum that had been building in recent quarters," stated David Huether, senior vice president of economics and research at U.S. Travel.
Travel industry representatives weighed in on the potentially negative impact that rising fuel costs could have on travel and tourism, during a hearing of the House Committee on Natural Resources on Tuesday.
Mark Brown, AAA's executive vice president of association and club services, said a AAA survey in March 2012 found that 84% of respondents have already changed their driving habits or lifestyle in some way as a result of increased gas prices.
Combining trips and errands was the most commonly reported cost-cutting tactic, with 60% of respondents reporting having already made this adjustment.
"These results are consistent with data we’ve seen from previous surveys we conducted in 2008 and 2010 when we saw similar increases in gas prices," Brown said. "When prices climbed into the $3.80-and-up price point, consumers started to modify their behavior. Our surveys showed that people combined shopping trips and errands, they tended to dine out less and delayed major purchases."
Regarding travel plans, Brown said, "With the start of summer travel still a few months away, it is too early to tell if current prices will negatively impact the summer travel season. Our summer travel forecast will be released in mid-May, which will provide us with a more accurate snapshot of what to expect."
Sam Gilliland, CEO of Sabre Holdings, said in his testimony that one out of every nine jobs in the U.S. depends on travel and tourism, and that last year the industry supported 14 million U.S. jobs and generated $1.8 trillion in economic output.
"The travel industry does not just provide a bump to the U.S economy — it provides a shot of adrenaline," he said.
"But make no mistake. The travel industry’s significant contributions to the U.S. economy can only be fully realized if travel remains affordable and within the budgets of families and businesses of all sizes and backgrounds. This is where the high cost of energy rears its head."
Gilliland cited an Airlines For America study that every $1 per gallon increase in the price of jet fuel costs U.S. airlines $17.5 billion.
"If we do not solve this problem, continued fuel price escalation will result in more and more capacity coming out of the sky," Gilliland said. "Which means less choice for consumers and more expensive airfares. And that means fewer families will be able to afford to fly, fewer tourist dollars will flow into our communities, and fewer businesses will be able to send their personnel on critical trips. It translates to a body blow to our entire economy."
In suggesting ways to remedy rising fuel costs, Gilliland said the "lynchpin of any plan that is serious about confronting oil dependence must be the transformation of a transportation system that is almost entirely dependent on petroleum."
He said such a plan would include working to deploy alternative-fuel vehicles, like natural gas for heavy-duty trucks and electric vehicles for lighter-duty fleets.
Victor Parra, CEO of the United Motorcoach Association, said, "While alternative forms of energy in transportation are under development, and some may hold promise, we must not sacrifice dreams for reality."
"We must focus on short and long-term strategies that insure availability and affordability of the fossil fuel our nation needs for the decades to come," Parra said.
Gilliland said, "While there is no silver bullet on gas prices and no quick fix on energy security, there are solutions. I think we can all agree that there is an urgent need to enact the policies now that will lay the groundwork for a more secure energy future."
Follow Johanna Jainchill on Twitter @jjainchilltw.