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Lower gasoline prices mean road trips are back this Memorial Day

Americans are ready for a break, and they're being enticed out of their homes by big travel discounts, according to AAA.

By Ron SchererStaff writer of The Christian Science Monitor / May 12, 2009

Source: IHS Global Insight, AAA/ Rich Clabaugh/ Staff

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Last Memorial Day, many Americans, concerned about the economy, ate their hamburgers and hot dogs in the backyard. This year, the nation will start to hit the road again, perhaps chowing down with family and friends hundreds of miles away.

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But the yen to travel is not likely to continue through the entire summer. Instead, some travel economists say, the weight of the economy will probably drag down spending on trips to the beach, cruises to nowhere, and lobster dinners in Maine. This will keep things challenging for one of America's largest industries – the hospitality business, which employs 8 million people.

"Economic conditions are worse than last year," says Kenneth McGill, executive managing director of travel and tourism at IHS Global Insight in Eddystone, Pa.

Still, this Memorial Day, gasoline prices are significantly lower than they were in 2008, when some motorists were paying more than $3.94 a gallon. Despite a recent rise, the current average US price of gasoline is $2.25 a gallon, according to AAA.

Lower fuel prices is a key reason that AAA, a federation of motor clubs, predicted Tuesday that travel this Memorial Day holiday will rise by 1.5 percent, or 500,000 travelers. By comparison, travel dropped 10 percent last year.

Americans say they're ready for a break, and they're being enticed out of their homes by big travel discounts, according to AAA, which conducts an annual survey. Americans are also keenly aware that the price of fuel is less expensive than last year. And most people aren't concerned about the H1N1 flu outbreak, the AAA survey found.

Normally, the AAA forecast simply helps predict how busy the roads and airports will be, says Robert Darbelnet, AAA president and CEO. "However, this year our forecast may be more significant," he said Tuesday at a briefing in New York on the holiday forecast. "In addition to giving us a sense of the traffic we may have to deal with, it also provides us with a glimpse into the mood of the American consumer."

That mood is being pulled in different directions, Mr. Darbelnet says. For one thing, as job losses mount, people travel less. He added, "For those who are still employed and that is the vast majority of the population, they are dealing with falling home prices or smaller 401(k)s that may cause them to tighten their purse strings."

But on the other hand, Americans are being enticed by travel bargains that may not be available next year. Airfares are down 15 percent compared with last year, Darbelnet says. "In fact, we're seeing fares in some cases at 10-year lows," he said.