Americans Overcome Fuel Costs and Bad Weather to Achieve Record July Fourth Travel

By Shariq Khan

NEW YORK – High fuel prices and the looming threat of a hurricane are not expected to deter Americans from traveling this summer, as preparations for a record Fourth of July holiday kick off.

Motorist organization AAA anticipates that nearly 71 million individuals will travel across the country during the Independence Day holiday, reflecting growth akin to pre-pandemic patterns.

Approximately 60 million people are expected to drive, while close to 6 million will take to the skies. Additionally, around 4.6 million travelers will utilize buses, trains, or cruises during this festive period, according to AAA’s predictions.

"We’ve never seen numbers like this," said AAA spokesperson Andrew Gross. "The travel expected in 2024 appears to mirror what 2020 would have looked like without the pandemic," he remarked.

This year’s summer travel will be closely monitored for various reasons, offering central bank officials and lawmakers a critical insight into consumer sentiment in an election year.

Inflation remained steady in May, even as consumer spending increased, fostering optimism that the U.S. Federal Reserve might control inflation without triggering a recession.

In recent months, gasoline prices have stabilized, with the national average for a gallon of fuel at $3.50, a slight decrease from last year. Domestic airfares are also 2% lower than a year ago, with the average round trip costing about $800, as indicated by AAA booking data.

Despite the declines, fuel prices are still significantly higher than historical levels. For instance, the average price for a gallon of gasoline was $2.74 during the July Fourth week in 2019, and from 2015 to 2019, the weekly average was below $2.50 per gallon, based on data from the U.S. Energy Information Administration.

Nonetheless, a survey by American Trucks involving over 1,000 participants suggests that vacationers’ plans are largely unaffected by the current fuel prices.

Last week, the four-week average U.S. gasoline demand reached a one-year high of 9.2 million barrels per day as retailers stockpiled for the holiday, according to EIA data. Additionally, the four-week average for jet fuel demand stood at 1.7 million barrels per day, matching a seven-month high observed earlier in June.

John LaForge, head of real asset strategy at Wells Fargo Investment Institute, noted, "What we have observed is that it’s more about the rate of change rather than the price itself that influences consumer perception." He explained that since gasoline prices have not seen drastic fluctuations in the past six months, consumer sentiment remains largely stable.

Currently, U.S. vacation travel appears unlikely to be affected by Hurricane Beryl, which has significantly impacted some Caribbean islands but is expected to weaken as it reaches Mexico’s Yucatan Peninsula.

Moreover, U.S. fuel inventories are more robust than in previous years, offering motorists some protection against sudden price increases that may arise from hurricane-related disruptions in refining operations.

U.S. gasoline reserves were around 231.7 million barrels as of the week ending June 28, marking a 5.6% increase from the same time last year, according to EIA data. Jet fuel stockpiles were also 4.7% higher compared to last year.

"Americans are optimistic and eager to travel, and that’s undeniable," affirmed GasBuddy analyst Patrick De Haan.