AAA has projected the number of Americans traveling this Labor Day holiday weekend will increase 9.9% from 2009, with approximately 34.4 million travelers taking a trip at least 50 miles away from home. Last year, 31.3 million Americans traveled during the Labor Day holiday. The 2010 Labor Day holiday travel period is defined as Thursday, September 2 to Monday, September 6.

“While media reports on the state of the U.S. economy are mixed, many Americans are still interested in taking one more trip as the summer travel season comes to a close,” said Glen MacDonell, director, AAA Travel Services. “It is encouraging to see more Americans planning to travel to visit family, friends and exciting vacation destinations.”

The increase in travel for Labor Day appears to be the result of economic improvement over the past year. While job growth has been disappointing, gross domestic product, household net worth and consumer confidence have increased, while consumer debt has decreased. The U.S. travel industry began to gain traction in the fourth quarter of 2009 and that momentum has continued this year.

In addition to economic data, the date of the Labor Day holiday is another variable considered in the forecast. The earlier the holiday falls in September, the more travel tends to occur. Although the growth in Labor Day travel is predicted to be strong at 9.9%, had the holiday fallen earlier in the month the forecasted number of travelers would likely be even higher.

Air and car trips to increase

Trips by automobile are expected to increase in popularity with 91% of travelers, or 31.4 million people, reaching their destination by driving. This is an increase of 10.3% from last Labor Day when 28.5 million travelers went by motor vehicle. Barring any major tropical storm activity in the Gulf Coast region, AAA expects the national average price of self-serve regular gasoline to be between $2.65 and $2.75 per gallon during this holiday weekend. Leisure air travel is expected to account for just five percent of overall travel with 1.62 million holiday flyers. This is an increase of 4.6% from one year ago when 1.54 million flew. Trips by other modes, including rail, bus and watercraft, will be the dominant means of travel used by four percent of all travelers.

Median spending increases; average distance traveled decreases

Based on a survey of traveler intentions, the average distance traveled by Americans this Labor Day holiday weekend is expected to be 635 miles, slightly less than one year ago (645 miles). Median spending is expected to be $697 this Labor Day, nearly $50 more than last year when median spending was estimated at $650. Dining (63%); shopping (47%) and visiting with friends and relatives (43%) were named as the three top primary activities by travelers this Labor Day weekend.

Airfares, hotel and rental car rates increase over holiday compared to 2009

According to AAA’s Leisure Travel Index, airfares over the Labor Day holiday weekend are expected to increase nine percent from last year with the lowest round-trip rates moving up to $179 for the top 40 U.S. air routes. Weekend daily car rental rates will increase seven percent to an average of $46. Hotel rates for AAA Three Diamond lodgings are expected to increase six percent from a year ago with travelers spending an average of $139 per night compared to $132 last year. Travelers planning to stay at AAA Two Diamond hotels can expect to pay two percent more at an average cost of $102 per night.

[Source:  "AAA / IHS Global Insight 2010 Labor Day holiday forecast."  AAA/ IHS Global Insight.  25 Aug. 2010.  Web.  26 Aug. 2010.]

Most major cities, especially those with convention centers, maintain a visitor’s bureau. Often, these organizations are called destination marketing organizations (DMOs). Historically, DMOs have spent a large portion of their operating budgets advertising to attract both business and leisure travelers to their region. But recent budget pressures have caused some changes in the way DMOs reach out to potential clients.

ExpediaMedia notes that DMOs are now spending up to 50% of the ad budgets in online formats. At least 2 factors have contributed to this shift:

• DMOs must do more advertising with smaller budgets and the online formats allow for this expansion
• More consumers are using digital tools to plan their travel

For example, 43% of consumers access user-generated content when researching leisure trips and  24% access travel information via a mobile phone or other device.

ExpediaMedia’s findings also indicate that DMOs have the opportunity to influence leisure travel plans by maintaining an online presence. A study by PhoCusWright shows that 56% of consumers end up selecting their final travel destination online. Another study by Google-Compete shows that 40% of travelers do not have an exact destination selected when they begin their online travel research.  These numbers mean that a solid online campaign by a DMO increases the likelihood that travelers may choose their city.

ExpediaMedia suggests that DMOs will achieve best results by undertaking a comprehensive marketing campaign that includes websites, social media, microsites, and ads at points of sales. Competition for travel dollars may be at an all-time high so DMOs would be well-served to maintain a strong online presence.

[Source:  New Research from Expedia Media. ExpediaMedia.com 21 Jul. 2010. Web. 27 Jul. 2010]

According to the National Retail Federation’s 2010 Independence Day Consumer Intentions and Actions survey, conducted by BIGresearch, nearly 144 million Americans or 61.9% of adults over 18 years old will celebrate the holiday the traditional way by attending or hosting a cookout/barbeque or picnic, which is the about the same as in 2009 (62.6%).

The survey also found 98 million, or 42.4% of adults over 18 will watch fireworks or attend a community celebration, compared to last year’s 42.7%. More than 28 million (12.2%) will attend a parade and 27 million (11.5%) will travel or take a vacation.

“There’s no better past time than enjoying Independence Day with family and friends,” said NRF President and CEO Matt Shay. “Summer promotions and sales on beach wear, picnic food and accessories should bring Americans into the stores and out of the heat as they prepare for their holiday festivities, especially with many families still relying on strict budgets.”

Independence Day is big business; more than 123 million people (60.8%) already own an American flag and nearly 86 million (41.9%) own patriotic apparel such as a t-shirt or hat. More than one-quarter (27.3%) of consumers own patriotic decorations.  As July 4^th approaches, 16.2% of consumers will head to stores to buy new patriotic merchandise, up from the 14.1% who were expected to shell out extra money for apparel, decorations or accessories in 2009.

“Fortunately for many people this Fourth of July, gas prices won’t be what hinders a trip to the beach or other vacation spot,” said Phil Rist, Executive Vice President, Strategic Initiatives, BIGresearch. “Consumers this year may open up to the idea of traveling to be with family or heading out of town for a little R&R over the holiday weekend, something they may have hid from the last two years.”

AAA predicts the number of Americans traveling this Fourth of July holiday weekend will increase 17.1% from 2009, with approximately 34.9 million travelers taking a trip at least 50 miles away from home. Last year, 29.8 million Americans traveled during the same period. The 2010 Fourth of July holiday travel period is defined as Thursday, July 1 to Monday, July 5.

In addition, trips by automobile are expected to increase in popularity with 90% of travelers, or 31.4 million people, reaching their destination by driving. This is an increase of 17.7% from last Fourth of July when 26.7 million travelers went by motor vehicle. AAA expects the national average price of self-serve regular gasoline to be between $2.70-$2.80 per gallon during this Fourth of July holiday weekend. Leisure air travel also is expected to grow slightly with 1.56 million holiday flyers expected. This would be an increase of 8.2% from one year ago when 1.44 million flew. Trips by other modes, including rail, bus and watercraft, will be the dominant means of travel used by six percent of all travelers.

[Source:  2010 Independence Day Consumer Intentions and Actions survey.    BIGresearch/National Retail Federation. 24 Jun. 2010.  Web.  24 Jun. 2010; AAA/IHS Global Insight 2010 Fourth of July holiday forecast.  AAA/IHS Global Insight. 23 Jun. 2010.  Web. 23 Jun. 2010.]

Unemployment may still be high but consumers are growing restless. Whether it’s a traditional summer vacation or a fall getaway, more consumers might be inclined to travel this year. The chief reason behind this interest is the general confidence many consumers have about their personal financial situations.  Fewer consumers cite personal credit card debt and the plunging value of investment portfolios as reasons to avoid traveling. Overall, the Traveler Sentiment Index, measured by YPartnership, came in at 90.4 in April 2010 which is an improvement from the 89.1  level a year ago.

Three variables have improved with respect to travel attitudes in the past year. They are:

• Interest in travel
• Time available to travel
• Money available to travel

However, it’s not all good news for travel operators. The survey found consumers are concerned about:

• Affordability of travel
• Perceived safety of travel
• Quality of travel services

Travel marketers should position their messages to address consumer concerns in order to increase revenue as the economy begin to expand again.

[Source:  Yesawich, Peter. Insights May 2010. YPartnership.com. 27 May 2010. Web. 15 Jun. 2010]