As the pandemic fades into the rearview mirror, tourists are fanning out across the country to travel despite record gas prices and higher costs across the board.
Gas prices hit another record Thursday, climbing to a national average of $4.72 per gallon. That is up more than 52 cents in just the past month alone and about $1.67 more than this time last year. Those prices are being reflected in high airline ticket prices and are causing travel to become even more unaffordable when combined with higher inflation across the board.
While those prices would typically drive down demand for summer travel, this year appears to be different because of pent-up demand for travel brought on by two years of pandemic-related restrictions and difficulties planning trips.
Some 70% of people plan to travel as much or more this year than last year, even with consumer prices being up 8.3% in the last 12 months and gas prices shooting through the roof, according to a survey by AAA.
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Jase Ramsey, an associate professor at the Florida Gulf Coast University Department of Management, said that despite gas prices shooting through the roof and airline tickets surging, demand for travel and tourism this summer is expected to be strong.
“People just want to travel so bad that they’re absorbing the cost in a way that I find somewhat shocking,” Ramsey told the Washington Examiner. “Right now, after COVID and two years of sitting at home … people are ready to get out again.”
Ramsey said businesses are not as concerned about passing along the higher costs to consumers because of the level of demand.
Angela and Mikel Welling own and operate Appalachian Offroad Adventure in Gore, Virginia. Their company offers tourists 4×4 off-road Jeep tours. The couple actually started the business during the pandemic, and the two have seen it blossom since, especially this year as COVID-19 wanes.
Angela Welling told the Washington Examiner that as the weather warms up and summer gets into full swing, her business has been seeing increased interest and bookings.
She suggested that some of the traffic to her business might actually be a result of the higher gas prices. She said many of her customers come from the surrounding states and may have decided to do a Jeep tour so they can still have a unique vacation experience while not dropping huge sums of money on plane tickets to far-flung locales.
She said that even though gas prices are high and affect how much it costs someone to visit, customers seem to want to venture out and enjoy their first summer that is largely back to normal since the start of the pandemic more than two years ago.
“We’ve been receiving a whole lot more calls and bookings so far this year,” she added.
Angela Welling did say that she and her husband are a bit nervous if gas prices keep creeping up because it will mean they will have to raise their prices a bit more to offset the higher costs. She did say, though, that if she and her husband have to increase prices by a little more, it shouldn’t have too much of an effect on demand because their business offers such a unique experience.
“We’re still not really concerned,” she said of the current gas prices.
Air travel is expected to be up 25% compared to last year, according to AAA, and despite record gas prices, 89% of those traveling expect to travel by car, which is an increase of 4.6% over 2021 levels.
Curtis Dubay, chief economist with the U.S. Chamber of Commerce, told the Washington Examiner that there is so much pent-up demand for travel and tourism that people will pay extra for those experiences.
He noted that wages are still growing, and there is still a glut of savings for people to reach into to cover the costs of their summer vacations.
“It’s certainly going to change some people’s plans, but if you’ve at all tried to book anything, you know how difficult that is to do. So people are just going to absorb the blow and push forward,” Dubay said.
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There are still options to travel for those trying to save money, though. For one, consumers can save on gas costs by traveling shorter distances or visiting regional destinations instead of flying across the country or internationally.
For those who want to save on travel this year, Ramsey suggests finding somewhere to go off the beaten path where demand might not yet be back to its pre-pandemic levels. For example, while the cost of traveling to Europe and major tourist destinations right now might be extremely expensive, other places, such as Costa Rica, are relatively cheap.
