Despite what most still see as a sluggish economy, Americans will increase their holiday travel this coming Labor Day weekend by 2.9 percent, according to AAA Travel’s annual survey. AAA Travel is predicting 33 million Americans will journey 50 miles or more from home during the Aug 30-Sept. 3 weekend, which is up from the 32.1 million people who traveled during the same period last year.

According to the AAA/IHS Global Insight 2012 Labor Day Holiday Travel Forecast, the total number of 2012 Labor Day holiday travelers is expected to reach a new post-recession high, and is the third increase in holiday travel this year. AAA's Memorial Day and Independence Day holiday travel forecasts projected increases of 1.2 percent and 4.9 percent, respectively.

Despite the economy and recent rises in gas prices, the increase in expected Labor Day holiday weekend travelers is driven by improved consumer confidence compared to one year ago and Americans' unwavering desire to travel, according to AAA. "In the absence of strong economic growth that might fuel a significant boost in travel volume, it is an encouraging sign that Americans continue to prioritize travel," said Bill Sutherland, vice president of AAA Travel Services. "Travel is still within America's discretionary spending budget."   

AAA’s survey of intended travelers found that 66 percent said their current financial situation would not negatively impact their Labor Day holiday weekend travel plans. Of the remaining 34 percent of travelers who said their current finances would impact their travel plans, 21 percent will economize in other areas, nine percent are planning to take a shorter trip, and the remaining 4 percent will travel by an alternate mode of transportation.

Surveyed travelers who reported their intent to economize in other areas plan to reduce spending on shopping and sightseeing and will stay with friends and relatives instead of reserving a hotel room. Changes in the expected primary activities of travelers this Labor Day holiday include increases in entertainment like nightlife, sporting events, concerts and golf.

Roughly 28.2 million people (85 percent of holiday travelers) will make their Labor Day holiday journey by automobile, representing a 3.1 percent increase over the 27.3 million people who did so in 2011.  The number of air travelers is expected to increase by 3.7 percent was airfares decrease. Labor Day holiday air travel has been fairly consistent since the recession bounce back began for the travel industry in 2010.  About 2.55 million leisure travelers (8 percent of holiday travelers) will fly during the Labor Day weekend, a 3.7 percent increase over 2011 when 2.46 million traveled by air.

In 2010, 2.6 million chose to fly to their Labor Day vacation destinations, which began the steady recovery from the decade-low 1.5 million air travelers in 2009. Airfares decreased 4 percent compared to the same period last year with an average lowest round-trip rate of $197 for the top 40 U.S. air routes, according to AAA's Leisure Travel Index. The remaining seven percent of Labor Day holiday travelers are expected to use other modes of transportation, including cruise ships, rail and bus travel accounting for 2.3 million Americans, a 0.2 percent decrease over last year.           

The average distance traveled by Americans during the Labor Day holiday weekend is expected to be 626 miles, up slightly from last year's average 608 miles.  Despite the longer average travel distance, most holiday travelers (54 percent) will be taking shorter-distance trips, between 100 and 400 round-trip miles.  The increase in expected air travel is a contributing factor to the slight lift in the average travel distance as air trips typically span longer distances than automobile trips, many over 1,500 round-trip miles. 

Median spending is expected to be $749, a small increase over the $702 median spending of intended holiday travelers in 2011. According to AAA's Leisure Travel Index, Labor Day holiday hotel rates for AAA Three Diamond lodgings are expected to increase 4 percent from a year ago with travelers spending an average of $154 per night compared to $148 last year. Travelers planning to stay at AAA Two Diamond hotels can expect to pay 6 percent more at an average cost of $117 per night. Weekend daily car rental rates will average $39, a 10 percent decrease from the same period a year ago.

National gas prices have fluctuated and been particularly sensitive to region variations throughout much of the year.  On April 5 and 6, motorists experienced a year-to-date peak average price of $3.94 per gallon for regular gasoline. The current national average price of regular gasoline for Aug. 20, 2012 is $3.72 per gallon, which is 22 cents less than the April peak and 14 cents more than last year's price on August 20. Sixty-six percent of intended holiday travelers said their current household finances would not negatively impact their Labor Day holiday weekend travel plans. As the Labor Day holiday weekend approaches, increases in gas prices could cause some travelers to alter their plans.  Conversely, falling prices could spur last-minute travel increases.

Barring any significant unforeseen events such as severe hurricanes, geopolitical incidents or dramatic nationwide price increases, gas prices are not expected to have a major impact on Labor Day holiday weekend travel. Historically, incidents that impact regional gas prices and regional travel have not impacted nationwide holiday travel.