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Gas Prices Decline, While Holiday Travel Hits Six-Year High

In spite of a tough U.S. economy and continued talks of the imminent fiscal cliff, millions of Americans will be traveling this holiday season.

Recently reduced gasoline prices and lower-priced airfares are expected to entice more than 93 million Americans to celebrate the Christmas and New Year holidays at least 50 miles away from home this year.

Holiday Travel Plans

This holiday season is expected to be the busiest in six years for travel, according to a recent AAA report. The leisure travel organization predicts 90 percent of travelers, an estimated 84.4 million people, will hit the road between Dec. 22 and New Year’s Day using a car, pickup or recreational vehicle to reach their holiday destination. An estimated 5.6 million Americans are expected to fly, and 3.27 million will most likely travel by bus, train, cruise ship or a combination of modes.

AAA president and CEO Robert Darbelnet said that in spite of a struggling economy, people are expected to make travel part of their celebration. “The year-end holiday season remains the least volatile of all travel holidays as Americans will not let economic conditions or high gas prices dictate if they go home for the holidays or kick off the New Year with a vacation,” he said.

Relief at the Gas Pump

Road travelers will benefit from the recent reduction in gas prices. While consumers in New York and New Jersey may have experienced higher gas prices following Superstorm Sandy due to gas shortages and a bit of price gouging, the national price average fell steadily throughout the month.

It is expected the cost of gas will be similar to the average $3.23 per gallon charged last holiday season; that’s a 50 cent per gallon drop since September 2012. AAA predicts the average price per gallon will range between $3.20 and $3.40 by Jan. 1, 2013.

While fuel costs are down this month, they are still considered record highs for the holiday season.

Airports Also Busy

Not only are America’s highways expected to be packed with travelers this season, so will American airports.

The trade group Airlines for America predicts about 15 million people will travel by air between Dec. 17 and Jan. 6. An estimated 42 million segments will be flown, which include a takeoff and landing; that’s a 1 percent decrease from last year.

Airlines for America chief economist John Heimlich predicts 86 percent of airline seats will be occupied by paying passengers, up from 85 percent last year. That number may increase to 90 percent on the traditionally busiest days: the weekend before Christmas, the day after Christmas and Jan. 2.

According to AAA’s Leisure Travel Index, air travelers will experience lower airfares as well. The average lowest roundtrip fare is $203 for the top 40 U.S. air routes, a 3 percent reduction from last holiday season.

Some Travel Costs Increase

Year-end lodging rates are expected to see a minimal increase from last year, according to AAA’s Leisure Travel Index. Average hotel rates for AAA Three Diamond lodging, for example, are expected to rise from $126 per night to an average $129 per night, a 2 percent increase. AAA Two Diamond hotel prices grew 3 percent.

The average cost of car rentals has jumped from $40 per day to $56 this year.

Dip in Fuel Prices to Help Economy

A drop in overall gas prices in November is expected to benefit the American economy.

The Consumer Price Index, the key gauge of inflation, fell 0.3 percent last month as a result of the 7.4 percent decrease in gas prices, according to the Labor Department. While prices were still 1.8 percent higher than one year ago, they are 2.2 percent lower than the inflation rate recorded in October. Another vital element of the price index, food prices, also increased only slightly in November, up 1.8 percent from the year prior.

Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].

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