Americans on the road again as economy improves

Bloomberg NewsJuly 2, 2014 

Traci Butler and her husband cut out vacations after the U.S. recession five years ago. This week, the couple is taking their two boys on a weeklong trip that includes a July 4th visit to the nation's capital, just a few weeks after touring Italy on their own.

In the aftermath of the recession, "things were much tighter," said Butler, a special education teacher from Washington, Ill., whose husband works for construction machinery maker Caterpillar. "We didn't have bonuses for a while. The last two years have been better."

About 34.8 million people plan to drive 50 miles or more from home during the five days ending July 6, up from 34.1 million last year and the most since 2007, AAA, the biggest U.S. motoring organization, said June 26.

The travel recovery is boosting sales for hotels and attractions, a sign that consumer confidence and consumer spending are on the mend, said Mark Zandi, chief economist at Moody's Analytics in West Chester, Pa.

"Stronger business travel and tourism is a very good barometer of the health of the broader economy," Zandi said. "Spending on travel is more discretionary and expensive. The revival in travel is thus a good sign that the economic recovery is gaining traction."

Hotel occupancies across the U.S. averaged 62 percent during the first five months of this year, up from 60 percent during the same period last year and the highest average for that time frame since 1996, according to data provided by Hendersonville, Tenn.-based research firm STR. Average room rates climbed 4.1 percent to $113.58.

Fifty-one percent of U.S. residents are planning to spend at least $2,000 or more on their summer vacations this year, versus 44 percent last summer, according to a survey by Chicago-based Orbitz.com, a travel website.

An estimated 88 percent planned a vacation this year, up 11 percentage points from a year earlier, the survey found.

In another sign of higher demand, air fares are up 6 percent for Memorial Day to Labor Day and hotel rates are up 12 percent, according to Orbitz.com.

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