How is everyone traveling so much when gas and food prices are sky high?

Posted by Admin July 30, 2024 Travel

KANSAS CITY, Missouri ‒ Susan Ewer watched as her kids rampaged around the play area inside the Kansas City airport, burning off energy for what promised to be a marathon travel day: flying to Ireland.

Seven members of her family were leaving from Kansas City, meeting up with another three in Chicago, for the jet trip across the Atlantic. They planned to spend 10 days driving around the Emerald Isle, meeting long-lost cousins in local pubs. They were supposed to have gone in 2020, but the pandemic screwed everything up, and this was the first chance they all had to travel together since then.

“A lot of people say we’re crazy, but I’m really optimistic,” she said.

Like millions of Americans, Ewer’s clan is taking a big summer vacation this year, driven partly by pent-up COVID-19 demand but also funded in part by the booming stock market and increasing wages. Airports are reporting record travel, and analysts say vacationers plan to spend more on their trips, even as higher gas prices, interest rates and food costs are pinching their everyday spending.

About 60% of Americans plan to take a summer trip this year, roughly the same as last year, travel experts say. But the same time, 60% of Americans think the U.S. economy in a recession, according to a new poll, and former President Donald Trump argues many Americans can’t afford summer travel.

During this presidential election, the economy and inflation are the single-biggest issue cited by voters, at 35%, with threats to democracy well behind at 21%, and immigration further back, at 19%, according to a July USA TODAY/Suffolk University survey. And even though wages and the stock market are both up under President Joe Biden, higher fuel and food costs, along with housing affordability, remain a major concern.

“It’s kind of hard to understand how the stock market is doing so well when the economy doesn’t really feel like it is,” said Gary Smith, 54, recently as he waited for a Southwest flight to Las Vegas. “I can’t quite get my hands around that.”

Smith was flying with his wife, daughter, niece and a friend to the Evolution Championship Series, the world’s largest e-sports competition. The long-planned trip was a graduation present for his daughter, he said, and they saved up for years to afford it.

“It did take a tad longer to put together the funds,” he said, citing the higher costs of living. “But as inflation has a tendency to increase, so does our pay. It doesn’t totally keep pace but any extra does help, and it’s a blessing.”

Experts say travelers like the Smiths represent a typical American family going on summer vacation: They know it’s more expensive but they’re still going by cutting back elsewhere or saving longer.

“The fact that people are still prioritizing travel is a wallet-share shift: They are prioritizing travel, and that’s a structural shift to Americans prioritizing experiences, how they want to spend their time,” said Mike Daher, a longtime travel analyst at consulting firm Deloitte. “The pandemic was a reminder that life is short, and that people are wanting to prioritize time with loved ones and new experiences.”

Scott Hughes is among those prioritizing travel. As he waited at Denver International Airport with his wife and four kids to fly from Alabama to Steamboat Springs, Colorado, where they have a second home, Hughes, a real estate developer, said higher interest rates have made business more expensive. He said they often fly a friend’s private plane to Colorado, but that it’s far cheaper to fly on United.

“I’m more concerned than I was last year about the economy, but not super concerned,” he said.

The rising prices are hitting lower-income families the hardest, with about 19% of households earning $50,000 or less planning to travel this summer, down from 31% last year.

The July USA TODAY/Suffolk University poll showed that Americans, by a 54% to 40% margin, believe Trump, who is running for reelection, would do a better handling the economy than Biden. The poll was taken shortly before Biden dropped out of the race and endorsed Vice President Kamala Harris. During the Republican National Convention earlier this month, several speakers said the higher cost of living means they’ve had to adjust their vacation expectations.

“Under Biden and Harris, half of Americans are not taking a vacation at all this summer because they cannot afford to do it,” Trump said at a July 9 rally, speaking days after Newsweek released a poll of 2,500 eligible voters that found 44% of respondents wouldn’t be taking a summer trip, and 53% said they would have traveled if things were cheaper.

About 32% of Americans said they don’t take any vacation in any given year because they are “too busy,” according to Expedia’s 24th annual Vacation Deprivation Report.

Among those who think the economy was better under Trump are Dwain and Kerrie Weinrich of Yuma, Colorado. Waiting to board a recent flight to Cabo San Lucas at Denver International Airport, the retired couple was among about 200 people from their small community flying to Mexico for a wedding. They said they prefer Cabo to Cancun because it’s cheaper, and had recently returned from a different wedding in Texas.

“We saved and now we get the payoff,” said Jerrie Weinrich, 66, who wondered aloud how young Americans are affording to travel. “We didn’t travel like this when we had kids in school.”

Dwain Weinrich, 66, who recently retired as a hog slaughterhouse manager, said they were using a combination of savings, credit card points and stock market gains to pay for their trip. He said they also booked early to lock in low prices. Even though the stock market is dramatically higher under Biden than Trump, he said they felt the overall economy was more secure before.

“Right now, it’s costing us more to live,” he said.

Daher, the travel-industry analyst, said Baby Boomers ‒ people aged 60-78 years old ‒ are traveling more this summer than last year. Baby Boomers, who account for about 21% of the U.S. population, hold half of the country’s wealth, according to NASDAQ officials, and with the stock market riding high, their 401Ks and other investments are surging.

Daher said 34% of Baby Boomers planned to travel this summer, compared to 28% last year. He said Baby Boomers, and travelers in general, understand that vacations will cost more this year. But he said they also anticipate having a better experience as a result.

“They are expecting to spend more, they have higher budgets and they have an elevated expectation of that experience,” he said. “They want to have a better experience and are willing to pay for it.”

Social media is playing a big role, Daher said, with Americans spurred to travel by their friends and family posting about trips online, from Ally in Peru to Sam in Portugal, Deb in Greece and Eric in Andorra.

Daher said one significant shift is that vacationers are taking fewer trips this summer, an average of 2.3 compared to 3.1 last year. But he also noted travelers are flying more, even though experts would expect travelers trying to save money would drive instead.

Over the July 4th holiday weekend, for instance, AAA estimated road travel increased by 5%, with more than 60 million people driving more than 50 miles. Air travel on the Sunday of the July 4th weekend also set an all-time record, with more than 3 million people passing through TSA checkpoints, up 15% from 2023.

“People are protecting their longest trips (and) that marquee summer vacation has stayed pretty steady,” Daher said. “What we’ve seen is a decrease in those short trips and weekend getaways. People are saying they are planning to take fewer of those.”

For Ewer’s family, the pandemic-delayed Ireland trip represented years of planning, saving and strategizing. The costs were slightly higher than they had initially planned for, in part because several of the young kids going on the trip now needed their own seats to fly.

Ewer’s dad, Paul Linneman, 71, last visited Ireland more than 30 years ago, when he biked around the island. Now semi-retired, he said savings and investments are helping him afford the adventure. As his daughter played tour guide and worried about making their Chicago connection to Shannon, Ireland, Linneman watched his grandchildren clamber over a mock airplane in the Kansas City airport and reflected on his hopes for their trip.

“It’s like the best dream you’ve ever had, all of these relatives coming together,” he said. “We’re having this great adventure.”