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VOL. 126 | NO. 101 | Tuesday, May 24, 2011

AAA: Memorial Day Travel Remains Flat

By Andy Meek

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Against the backdrop of gas prices that are approaching $4 a gallon in more places nationwide, the American Automobile Association is forecasting the number of Americans driving during the Memorial Day weekend to drop for the first time in three years.

In the four-state group the AAA refers to as the East South Central region, which includes Tennessee, Alabama, Kentucky and Mississippi, Memorial Day travel is expected to remain basically flat. About 1.6 million people will drive in the region over the holiday weekend, a nearly 1 percent drop from 2010.

One culprit is the price at the pump.

“While the (East South Central) region is on the heels of economic recovery, the rising price of gasoline is expected to restrain the demand for holiday travel,” reads the AAA’s Memorial Day 2011 Travel Forecast report. “In 2011, the price of gasoline in the ESC region increased by 41 percent. The effect of this price increase will be to restrict the number of person-trips and to reduce total spending on leisure and hospitality.”

Jessica Brady, media relations manager for AAA Auto Club South, said it’s likely this summer gas prices could range between $3.25 and $3.75, barring any catastrophic event such as a bad hurricane.

Even so, that range is still at least a dollar above where prices were 12 months ago. The current average price of a gallon of gas in Tennessee is about $3.68, up from $2.68 this time last year, according to AAA data.

The drop in travelers driving during Memorial Day weekend is not limited to Memphis, Tennessee or even the AAA’s East South Central region. The AAA is forecasting an overall drop of about 0.3 percent in automobile travel throughout the U.S. during the holiday weekend.

Chris Low, chief economist for FTN Financial, a unit of First Tennessee Bank, said earlier this month that gas prices are one of the factors baked into his forecast that consumer spending will get weaker in the second half of 2011.

“Gas price increases like the one we’ve seen since the beginning of the year – they’re painful,” he said, adding that a widespread, broadly felt sea change in consumer spending patterns wouldn’t happen until prices hit something like the $5 mark.

The AAA’s forecast suggests that’s still a long way off. The group’s data show that rather than scrapping trips, travelers are shortening them.

The AAA data show 19 percent of travelers this year will take a trip of 50 to 150 miles roundtrip, up 5 percent from last year.

“Americans still want to start the summer off with a few days of relaxation, but with tighter budgets as a result of increased gas prices, more people plan to take a trip closer to home and enjoy local attractions and activities,” said Brent Hubele, vice president, Travel, AAA Auto Club South.

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