Pent-up demand insulates tourism industry from soaring gas prices | United States and world

Ait’s the pandemic fades in the rearview mirror, tourists are deployed across the country to travel despite record gasoline prices and higher costs in all areas.

Gasoline prices hit a new high on Thursday, climbing to a national average of $4.72 per gallon. That’s up more than 52 cents last month alone and about $1.67 more than the same time last year. These prices are reflected in high airfare prices and make travel even more unaffordable when combined with higher prices. inflation at all levels.

While these prices would typically lead to lower demand for summer travel, this year appears to be different due to pent-up travel demand caused by two years of pandemic-related restrictions and difficulties planning trips.

Some 70% of people plan to travel as much or more this year than last, even though consumer prices have risen 8.3% over the past 12 months and petrol prices have climbed in arrow, according to a investigation by AAA.

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Jase Ramsey, an associate professor in the Department of Management at Florida Gulf Coast University, said despite soaring gas prices and soaring airfares, demand for travel and tourism this summer is expected to be strong. .

“People want to travel so badly that they absorb the cost of it in a way that I find somewhat shocking,” Ramsey told the Washington Examiner. “Right now, after COVID and two years at home…people are ready to go out again.”

Ramsey said companies aren’t as concerned about passing on higher costs to consumers due to the level of demand.

Angela and Mikel Welling own and operate Off-Road Adventure in Appalachia in Gore, Virginia. Their company offers tourists off-road 4×4 Jeep tours. The couple actually started the business during the pandemic, and the two have seen it flourish ever since, especially this year as COVID-19 wanes.

Angela Welling told the Washington Examiner that as the weather gets warmer and summer is in full swing, his business is seeing increased interest and bookings.

She suggested that some of the traffic to her business might actually be the result of higher gas prices. She said many of her clients come from surrounding states and may have decided to take a jeep tour so they can still have a unique vacation experience without wasting huge amounts of money on tickets. plane to distant places.

She said that even though gas prices are high and affecting the cost of a visit, customers seem to want to venture out and enjoy their first summer which has largely returned to normal since the pandemic began there. over two years ago.

“We’ve had a lot more calls and bookings so far this year,” she added.

Angela Welling said she and her husband were a little nervous if petrol prices continued to rise, as it would mean they would have to raise their prices a bit more to offset the higher costs. She said, however, that if she and her husband were to raise prices a bit more, it shouldn’t have too much of an effect on demand, because their business offers such a unique experience.

“We’re still not really worried,” she said of current gas prices.

Air travel is expected to increase 25% from a year ago, according to AAA, and despite record gas prices, 89% of travelers plan to travel by car, a 4.6% increase from at 2021 levels.

Curtis Dubay, chief economist at the U.S. Chamber of Commerce, told the Washington Examiner that there is so much pent-up demand for travel and tourism that people will pay extra for these experiences.

He noted that wages continue to rise and there is still a glut of savings people can dip into to cover the costs of their summer holidays.

“It’s definitely going to change some people’s plans, but if you’ve tried to book anything you know how hard it is to do. So people are just going to absorb the blow and move on.” , said Dubay.

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However, there are still travel options for those trying to save money. On the one hand, consumers can save on gas costs by traveling shorter distances or visiting regional destinations instead of flying across the country or overseas.

For those looking to save on travel this year, Ramsey suggests finding a place to get off the beaten path where demand may not yet have returned to pre-pandemic levels. For example, while the cost of travel to Europe and major tourist destinations right now can be extremely high, other places, like Costa Rica, are relatively cheap.

Original location: Pent-up demand shields tourism industry from soaring gasoline prices

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