Vacation is back in vogue: Where are Americans going this summer?

Summer vacation bookings are already up from last year. What's the latest hot destination? Vegas, baby.

By , / Staff writer

Many Americans spent their summer vacations last year going to the local swimming hole, picking raspberries in their backyards, and spending the night in their own beds.

But this year, it looks as if Americans will hit the road – perhaps kayaking in California with the leopard sharks in La Jolla Cove, learning about the world of Cleopatra at the Franklin Institute in Philadelphia, or shopping for Armani and Dolce & Gabbana in Milan, Italy.

Already, travel agents report, bookings are much better than last year, which qualified as a travel dud. A late May forecast from the U.S. Travel Association, a trade group in Washington, predicts a modest 2.3 percent increase in summer leisure travel compared with last year.

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"We think people will take a vacation from 'staycations,' " says Steve Piraino, a senior economist at IHS Global Insight in Washington. "Summer travel will still be lower than [in] 2007 and 2006, but we will start along the path of recovery this summer."

What changed?

The economy has showed improvement. "People feel better off and more confident in their financial prospects than they did," says Suzanne Cook, senior vice president of research at the U.S. Travel Association.

The biggest factor may be the job market. Although the figure for May did not meet expectations, there were 1.1 million more people employed in April than in January, according to the US Bureau of Labor Statistics. By contrast, between January and April of last year, the ranks of the unemployed increased by 1.3 million. In addition, housing prices have stopped falling so fast – and are actually rising in some areas, benefiting homeowners. A recovery in the stock market in 2009 has also helped.

At the same time, many Americans missed taking a vacation last year. Since travel has been at below-normal levels for the past two years, there is "pent-up" demand, Mr. Piraino says.

What are the most popular destinations?

The high temperature in Las Vegas averages 106 degrees F. in July, but that won't stop Americans from traveling there. In fact, it's the top spot this summer, according to advance bookings at Travelocity, the online travel agency. One reason is price: Las Vegas hotels average $104 a night compared with the national average of $144 for key destinations.

"It shows you people are still watching their travel dollars," says Genevieve Shaw Brown, a travel expert at Travelocity.

Americans seem to have an affinity for warm weather: They also plan to visit Florida – Orlando and destinations in the southern part of the state.

For other big destinations, see the chart at top.

Are bargains still available?

Hotels might be the best deal for travelers who shop around. In addition to Vegas, cities that have average hotel rates below the national average include Portland, Ore.; Reno, Nev.; Dallas; St. Louis; Atlanta; and Tampa, Fla., according to Ms. Brown.

Even in more-expensive cities, some hotel chains are offering 30 percent off for weekend stays, says Glen MacDonell, director of AAA Travel Services in Heathrow, Fla. Some luxury hotels, such as Four Seasons, have "free night" promotions if you stay longer. However, Mr. MacDonell says, "We are not seeing the discount mania like we had last summer."

Will it be cheaper to drive or fly?

Driving to a destination will be slightly more expensive than last summer: Gasoline prices are now 36 cents a gallon higher than a year ago. According to an estimate by AAA Travel Services, the average family travels 600 miles on a vacation. If the family car gets 25 miles a gallon, that means it will cost about $10 more than last year to drive.

Airfares have also gone up, and their rise may be more significant. Domestic fares are 21 percent higher than in 2009, and international airfares are 19 percent higher, according to Brown.

"It may encourage people to consider a driving vacation," she says.

Will the strong US dollar help on a trip to Europe or Asia?

The stronger dollar may make Europe more affordable. A Paris hotel that charges 200 euros a night would cost $244 a night now, compared with $316 a night in 2008, when the dollar was weaker. Over seven days, that's about $500 in savings. Even little things can add up: A ticket to the Louvre Museum is now $11.80 compared with $13.54 last August.

Related:

Jobs numbers for May squelch some economic optimism

Case Shiller index shows house prices rising 0.3 percent

After a long slide, dollar on the rebound

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