Summer Tourism Gets a Lift from Americans With More Money to Spend

PNC’s economists are packing more optimism for this summer’s travel season amid lower gas prices plus increases in wages and employment rates for Americans.

Following a harsh winter and spring, vacation dreams will become a summer reality for many Americans. A more stable U.S. economy, higher employment levels and a strong U.S. dollar have opened up a wide variety of travel opportunities this year.

“We think people across the country will have a little more money to spend and certainly the drop in gasoline prices is part of that story,” said Stuart Hoffman, PNC’s chief economist. “But probably an even bigger part is the fact that there will be 3 1/2 million more people working this summer than a year ago. Wages also are picking up a little bit and gasoline prices are down.”

By Land and By Air

For stateside summer travelers, the trend is skewing toward road trips. “It’s still a whole lot cheaper to drive and pack four, five or six people into a car than to fly them,” Hoffman said. Additionally, domestic vacationers may go away on several extended weekend trips instead of one longer excursion.

Top U.S. vacation destinations for 2015 include several California locations for the West Coast with Washington, D.C., Florida and New York being popular destinations on the East Coast.

The state of Florida, for example, expects another busy year. The Sunshine State estimates it welcomed more than 97 million visitors in 2014, the fourth consecutive record year for tourism there. Additionally, 2014 tourism and recreation taxable sales in Florida were up 7.7 percent year over year.

U.S.-based airlines also are expecting their busiest summer on record, with industry estimates predicting more than 220 million passengers flying between June 1 and August 31 this year. This includes more than 31 million passengers expected to travel to European vacation destinations.

Bill Adams, senior international economist

Cross-Border Benefits

For Americans traveling overseas, “a vacation in Europe is cheaper than it’s been for years,” said Bill Adams, senior international economist, PNC. “The strength of the U.S. dollar combined with the improving U.S. economy and rising consumer confidence means that more American consumers are feeling confident enough to take an international vacation. Whether you’re looking at train fares, hotel rates or museum admissions, the strength of the U.S. dollar means that all of those prices in the Euro area are on discount.”

Going to Europe for vacation is a strong option for people living on the U.S. East Coast since the flying time is nearly the same between there and Europe or the West Coast. “For those who might have been considering a destination domestically or internationally, the dollar makes international a lot more attractive than it did last summer,” Hoffman said.

Mekael Teshome, regional economist

While the currency exchange rate is favorable for the U.S. dollar now, the relative strength of the dollar in Europe and elsewhere, is having an adverse effect on foreign travelers vacationing in the United States. Travel experts say foreign tourists may not necessarily curtail a planned U.S. vacation, but they may make budget conscious decisions about how long they’ll stay, where they’ll go and where they’ll eat.

For PNC regional economist Mekael Teshome, there has been a noticeable impact on some of Florida’s retail business. “Miami does have a large contingent of Latin American visitors who come there for shopping, especially Brazilians,” he said. “There are winners and losers. The businesses that do tend to cater to foreigners are seeing a reduction in customers. But, Americans are making up for it.”

Kurt Rankin, regional economist

“Something else that’s going to hurt European travel tourism dollars coming from Europe is simply the state of much of Europe’s economy, which is not good,” added Kurt Rankin, regional economist for PNC. “So, although the Euro is not buying as many dollars these days to make that trip, the economies there are suffering, which is going to hamper travel for even those that could afford it.“

With lower gas prices and better pay, more Americans will travel this summer, says PNC’s chief economist Stuart Hoffman

Travel experts say 13 of the 15 busiest travel days for U.S. airlines occur during the summer months. However, the busiest travel period of the year is typically the Thanksgiving holiday.