Why Americans are on the road again

As he fills his minivan at the corner Mobil, Stu Latham has already calculated how much the $2.49 regular gas will cost for a round trip to Lake Tahoe, about seven hours north.

ARE WE THERE YET? Experts predict record high traffic this Memorial Day weekend and this summer. DANIEL HULSHIZER/AP/FILE

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"Don't even talk to me ... I've already decided to bite the bullet," says the semi-retired computer consultant, as his wife and two teens exit the station's food mart with a Styrofoam cooler, drinks, and snacks. "All I can say [is that] it's cheaper than flying."

At a Starbucks next door, housewife Kelly Landes arrives at the same conclusion after comparing airline prices to Phoenix ($325 per person) to a rental car ($211 for four days, $113 for gas) using her laptop computer. "Gas isn't cheap," she says, "but I know a comparative bargain when I see one."

Despite the highest nominal gas prices ever recorded for a holiday, a record 37.2 million Americans are expected to travel this weekend - packed cheek-by-jowl inside their vans and sedans. Steeper gas prices - about 15 cents per gallon more than last year - will not be a significant deterrent, analysts say, because gasoline remains a small share of family vacation costs.

In fact, after adjusting for inflation and rises in average incomes, gasoline is taking less than half the bite from a household budget than in decades past, says Jerry Taylor, director of natural resource studies for the Cato Institute, a Washington think tank.

"The dollar price of gas looks way higher than it did in the 1950s, 1970s, and 1980s," says Taylor, "but the rise in American incomes has been so much greater that you are not going to see that much behavioral change in driving habits as a result."

That's part of the explanation for this year's predicted 2.2 percent rise in driving. But it also goes hand in glove with another phenomenon: Drivers will compensate for the added cost of gas by shortening their stays and cutting out other amenities like nice dinners and entertainment.

"People ... can forgo a pizza or two and a couple trips to Starbucks on their trip - they can make up for it relatively painlessly," says Justin McNaull, spokesman for the Automobile Association of America. With the organization's studies showing the typical "longest drive" for an American vacation is about 793 miles, a 15-cent rise in gas prices adds up to just $8 for a vehicle that gets 15 miles per gallon.

Many will also stay at cheaper hotels, or opt for RVs and campsites.

Rainy weather on the East Coast may dampen the adventurous spirit for many this weekend, but Memorial Day still sets the stage for what experts predict will be a record summer for travel.

Travel bug, at home and abroad

Another part of record car travel inside the US, say analysts, is a trend of Americans traveling less overseas in the wake of the 9/11 and the ensuing war on terror. Though many analysts say Americans are overcoming their reservations about foreign travel, the rediscover-your-own-country movement that started during that time is still playing itself out. "What emerged since 9/11 was a strong desire for Americans to reconnect with the America they had never seen, and the only way to do that is through a road trip," say Matthew Hudson, author of "Roadtripping USA: The Complete Coast-to-Coast Guide to America."

As America's undeterred four-wheel wanderers explore scenic drives from the Smoky Mountains to the Grand Canyon, they will encounter a dramatic surge in foreign visitors.

Thanks to a dollar that has weakened against the euro and the British pound, European visitors are taking advantage of package deals to see more of America than ever before.

"Thank goodness for the euro that is spurring the recovery in international travel to the US," says Cathy Keefe, spokeswoman for the Travel Industry Association of America. "We have been fighting an essentially negative image of this country internationally, but now that we have become a bargain destination, visitors are helping to break that negative image."

A post-9/11 rebound

The increased car travel by Americans within the US and the surge of foreign visitors here are part of a global increase in travel since the nadir after Sept. 11, 2001.

"We are continuing to see the broader travel recovery that started in 2004," says Ms. Keefe, noting that last year was the first year since 9/11 that saw improvements in every sector of the travel industry. She and other analysts say that although the costlier airlines and gas prices don't affect whether travelers choose to go on vacation, they do affect where they go, both in destinations and accommodations.

Air travel to pricey destinations like London, Paris, and Rome has dropped, as Americans opt for cheaper entry points such as Manchester, England, Glasgow, Scotland, and Dublin, Ireland. Americans have flocked to Prague (up 53 percent over last year), Vienna (up 44 percent), Zurich (up 23 percent), and Athens (up 45 percent).

Savvy ways to pinch pennies

At the same time, because of the weak dollar, travel agents report that Americans are taking care to trim costs on both sides of the Atlantic. Abroad, that means finding ways to avoid larger airports where cab rides to adjacent cities are notoriously high ($80 for Heathrow to London, for example.) And at home it means choosing more discount chains at the perimeters of destination cities, rather than more expensive, downtown hotels.

"With a far weaker US dollar, people are looking seriously at ways to take the train, bus, and shuttle into cities," says Mr. McNaul. "And they are often choosing to stay at cheaper accommodations which are farther away from what they want to see."

SOURCE: AAA/TRAVEL INDUSTRY ASSOCIATION OF AMERICA; GRAPHIC: RICH CLABAUGH