Overall Labor Day holiday travel will be down; but more people will be in cars than airplanes

ORLANDO, Fla. — For the first time this year, the number of holiday air travelers is expected to decline for a major travel holiday as airfares are up 13%, AAA reported Wednesday. The number of overall holiday travelers likewise is projected to decline as compared with last year.

AAA forecasts 31.5 million Americans will travel 50 miles or more from home during the Labor Day holiday weekend, a 2.4% decrease from the 32.3 million people who traveled one year ago. Approximately 27.3 million people (87% of holiday travelers) plan to take to the nation’s roadways this Labor Day holiday weekend. This is a slight increase of 0.5% from the 27.2 million auto travelers in Labor Day 2010, and a 3% increase in the share of total holiday travelers from last year’s 84%. Automobile travel remains the dominant mode of holiday transportation.

Almost 2.5 million leisure travelers (8% of holiday travelers) will fly during the Labor Day holiday weekend, a 1.9% decrease from 2010. Rising fuel costs, combined with steady air travel demand, have resulted in rising airfares over the past few months. According to AAA’s Leisure Travel Index, Labor Day airfares are expected to be 13% higher than last year with an average lowest round-trip rate of $202 for the top 40 U.S. air routes. Increasing airfares and fees are factors contributing to the decline in air travel, the first expected decline for a major travel holiday in 2011 as forecast by AAA.

“AAA is projecting a decrease in the number of Labor Day travelers as some Americans react to recent economic uncertainty and increasing air fares,” AAA Travel Services director Glen MacDonell said. “While automobile travel is expected to increase slightly, if recent declines in gasoline prices continue through Labor Day, we could see an increase in last-minute holiday weekend travel.”

The decrease in expected travelers is a result of a mixed economic outlook, consumer uncertainty regarding the overall economy, and recent downturns in economic factors that affect discretionary income, which is particularly relevant to the travel and tourism industry. Real disposable income is up just 1.3%, which is being offset by the travel price index rising 6.7% since last year, due primarily to rising transportation costs. The housing market remains depressed, with new and existing home prices down 2.4% and 3.4%, respectively.

A consistent story throughout the year has been the significant increase in gas prices, AAA stated. The current national average price for regular unleaded gasoline is approximately $3.57 per gallon, about 86 cents higher than one year ago. Down nearly 10% from their May peak, gas prices will have less of an impact on Labor Day holiday travelers than they had on Memorial Day and Independence Day holiday travelers, during which 42% and 44% of travelers, respectively, stated gas prices would impact travel plans. Almost three out of four intended Labor Day holiday travelers said gasoline prices would not impact their travel plans. For the remaining 29% who said gas prices would impact their travel plans, 20% plan to economize in other areas while the remaining 9% are divided between changing their mode of travel and taking shorter trips.

The Labor Day holiday travel period is defined as Thursday, Sept. 1 to Monday, Sept. 5.