Lower gasoline prices mean road trips are back this Memorial Day

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.

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.

The cruise industry in particular is offering bargains in an apparent effort to fill their ships. "You could go to Alaska on a seven-day cruise at fares starting at $399 per person," Darbelnet said.

Carnival Cruise Lines has "pack and go" last-minute deals that have extremely low prices. An inside room for a four-day trip to Key West and Nassau, for example, can be purchased for $179, or $44.75 a day. That includes food. "It is unheard of," says Betsy Sell, AAA's managing director of travel services.

While the cruise prices are geared to procrastinators, resorts in some cases are trying to entice consumers to book early to get discounts. That's the case at the Resort at Squaw Creek at Lake Tahoe in California, which is offering a two-night package that includes an option for free golf or spa activities for a couple or a children's program that has an emphasis on mountain adventure. It has to be booked by June 11 but can be used through Oct. 10.

"Business is definitely down from summers past," says Marc Sapoznik, marketing and public relations manager at the resort.

Many resorts are trying to lure customers with special promotions. Ms. Sell points to a Disney World promotion that offers free food for customers staying five nights.

In the San Diego North area, meanwhile, the Lodge at Torrey Pines is throwing in a free 40-minute biplane ride for two. The Woodfin Suite Hotel will give customers two free tickets to SeaWorld. And for the more adventurous, the Grande Colonial is offering a bike tour of La Jolla and a chance to snorkel with sharks.

Some resorts are reviving programs that helped them last summer when gasoline prices were high. That's the case at the Wild Dunes Resort in Palms, S.C., which is offering 20 to 40 percent off depending on the length of the stay. For bookings at least 30 days in advance, add a $100 dining credit, which is new this year.

Other resorts are trying to make it easier for families with children. The Sea Pines Resort on Hilton Head Island is offering free food for children under the age of 12, plus free golf for the kids. And in case the family wants to remember its less expensive vacation, it gets a complimentary family portrait on the beach – normally worth $160.