A record number of Americans are expected to hit the roadways this July 4th weekend. Despite elevated inflation straining households, there’s still a lot of pent-up travel demand after the pandemic years. Even with surging travel demand, fuel consumption is unlikely to exceed pre-Covid levels due to more efficient vehicles and the proliferation of EVs.
“We’ve never projected travel numbers this high for Independence Day weekend,” Paula Twidale, Senior Vice President of AAA Travel, wrote in a new report released Monday.
Twidale said, “What this tells us is that despite inventory being limited and some prices 50% higher, consumers are not cutting back on travel this summer. Many of them heeded our advice and booked early, another sign of strong travel demand.”
AAA projects more than 43 million motorists will drive at least 50 miles from their homes between June 30 and Tuesday, July 4. That’s a 2.4% increase versus 2022 and 4% compared to 2019. If travel by buses, trains, cruise ships, and planes is added, then a record 50.7 million Americans are expected to travel.
Bloomberg pointed out that while record travel is expected for the holiday weekend, “widespread adoption of more efficient vehicles means fuel demand nonetheless remains muted — and might never get back to pre-pandemic rates.” Data from the Environmental Protection Agency shows the average car is more fuel efficient, getting about 33.3 miles per gallon. Also, the increasing number of EVs decreases fuel product demand at retail pumps.
Americans are still traveling and spending money despite negative real wage growth for the past two years, along with soaring credit card balances and the highest interest rates in a generation.
The next test for the consumer will be if they still can splurge on travel on late summer Labor Day weekend.
