Lower gas prices having impact on US travel and tourism
Gasolene prices in the US continue to go down, raising the question of how low they can go and what impact it’s having on travel and tourism.
The average price of self-service regular gas has declined almost 38 cents per gallon since the middle of last month and is now $2.265 per gallon, according to AAA.
Prices haven’t been this low since last March.
Said Catherine L. Rossi, manager of public and government affairs for AAA Mid-Atlantic:
“Lower crude prices, the end of the summer driving season, a cooling of international tensions and an unusually quiet hurricane season have translated to lower prices at the gas pump.”
How low will prices go?
“We really don’t know where the bottom is right now,” she said.
But the US Department of Energy expects the prices of crude oil and gas to decrease next year by roughly 5 and 3 percent, according to estimates.
Other analysts say with increased worldwide drilling, gas prices may continue to plummet in the near future.
A major reason for the rising gas prices was based on fears that producers still recovering from refinery damage from last year’s hurricanes would have trouble keeping up with rising summer demand, according to several media reports.
The moderation in gas prices is certain to help the domestic tourism market dependent on travelers arriving by autos, AAA officials say. There has been ongoing concern that rising gas prices would reach a point where travelers would be hesitant to continue planned auto trips.
But the falling fuel prices are also “acting as a white knight” for the airline industry, according to The Wall Street Journal.
Lower fuel prices, which dropped to $58.22 a barrel after peaking in the $70s last year, come just as US airlines are coping with a drop-off in fliers following August’s terrorist threat in London. That has also helped the investment market.
“Even though some travelers are being scared away, investors have concluded that any decline in fliers is more than overcome by the drop in fuel prices,” the Journal concluded.
Each $1 drop in the price of a barrel of oil cuts $80 million in an airline’s fuel costs, according to estimates.
American Airlines estimates it could save $475 million during the second half of the year if fuel costs remain lower.
Report by David Wilkening
David
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