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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 Ron Scherer/ Staff writer / June 5, 2010

New York

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.

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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.

"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.