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Summertime, and the Leaving Is Costly, With Prices Jumpin'


Attention, summer travelers: Take extra cash.

Despite chronically low inflation throughout much of the economy, the price of enjoying yourself this summer--specifically when paying for gasoline, rental cars, hotel rooms and airline tickets--will be higher than it was last summer.

The higher travel costs, however, will not discourage vacationers, who will take to the roads and airways in record numbers between Memorial Day and Labor Day.

"We expect Memorial Day will kick off a strong summer travel season," said Jerry Cheske, spokesman for AAA, which recently released its annual summer forecast with the Travel Industry Assn. of America.

Travel is expected to rise 4% this summer to 271 million "person-trips" within the United States. A person-trip is one person traveling at least 100 miles from home one way. About 229 million, or 84%, of those trips will be by auto, truck or recreational vehicle, the travel association said.

"We have very high expectations for summer travel this year," said Suzanne Cook, the association's senior vice president of research. "Family travel remains popular, mature adults continue to take longer trips, and young adults, many of whom have not started families, are some of our most active travelers."

The association is predicting that overall travel price inflation will average about 2% this year, continuing the same relatively small price increases of the last few years. A separate analysis by the consulting firm PricewaterhouseCoopers predicted higher price jumps.


The most obvious cost increase is for gasoline, but unlike the situation in summers past, the worst may be behind us before the season even begins.

Gasoline prices flared in March due to several unrelated refinery mishaps in California, which also created a ripple of higher prices outside the state. The price of self-serve regular unleaded gasoline peaked in California at nearly $1.63 a gallon in mid-April but has fallen about 21 cents a gallon since then. Nationwide, regular unleaded gasoline is hovering around $1.13 a gallon, near its 16-month peak.

Prices usually begin to rise in April or May nationally, hitting a high in early June before retreating somewhat until Labor Day, when summer demand dries up and the price drops again, said David Costello, an economist with the Energy Information Administration, the statistical arm of the U.S. Energy Department.

"This year, we've stuck our necks out and said that maybe the peak might be in May," Costello said. "My guess is there's still some momentum for prices to decline," although they will be about a dime higher than last summer. California's prices are expected to remain about 15 cents higher than the predicted national average of $1.15 a gallon for regular unleaded in the second quarter and $1.13 a gallon in the third quarter.

But even at these prices, gasoline remains a relatively small part of any vacation travel budget, Cheske said.

"It's not a deal breaker," he said.

For example, a round-trip visit to Las Vegas from Los Angeles would cost nearly $31 in gasoline this Memorial Day compared with slightly more than $25 a year ago, said Jeffrey Spring of the Automobile Club of Southern California. That increase assumes an average gasoline price of $1.56 a gallon this year and $1.27 last year.

Most major U.S. car rental companies recently hiked base rates by $3 a day, and prices in some cities will be as much as 12% higher than last summer, according to PricewaterhouseCoopers.

The average daily cost of a U.S. hotel room will rise 3.9%, more than twice the rate of inflation, to $81.77, the company said. AAA is forecasting that the average cost of lodging for a family of four will be $110 a night, the same as in 1998, but meal costs are up 3% to $103 a day.

For those who will leave their cars behind and take to the skies, domestic U.S. air fares are rising nearly 10% this year, PricewaterhouseCoopers said.


Higher travel costs this summer "are reflective of pent-up demand because of the prosperity of the economy," said Michael Mahoney, director of the hospitality and leisure practice in the Los Angeles office of PricewaterhouseCoopers. "The traveling public is getting richer faster than the prices are going up."

Even the game of summer is not immune: A family of four will spend 6.8% more at the ballpark this vacation season compared with last year, according to Team Marketing Report, a Chicago-based newsletter. Its fan cost index is at $121.36 this summer, based on average prices charged by all baseball teams for two adult tickets and two child tickets, two beers, four sodas, four hot dogs, parking, a program and a souvenir cap.

So if you decide to confine your summer road trip to the Greater Los Angeles and Orange County areas, take note: The fan cost index for the Dodgers rose 11.7% to $123.60, ranking 13th highest among baseball teams. (The Dodgers had the distinction of charging the most for a cap, at $15.) The Angels ranked 16th at $121.89, up 8.4%.

Nancy Rivera Brooks covers energy for the Business section. She can be reached at

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