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July 14, 2008

Summer driving plans

With gas prices up so much, there's concern that households will scale back their vacation plans. Is this a real possibility? Listen

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"This is important not only because some people may not be able to take their vacation but because a large segment of our economy depends on tourism. We know that here in North Carolina you go to the coast or to the mountains, a lot of people depend on those tourist dollars, so this is very important stuff. Well, I think a couple of pieces of good news on this front. One survey showed - and, of course, we can't always rely on surveys - but they do show right now that a majority of households say that they're not going to let high gas prices stifle their summer vacations. They're still going to take their summer vacations. That's good news. The second piece of good news is that if you work the numbers, yes, gas prices are certainly up - a lot, over 30 percent this year - but if you compare, for example, driving 1,000 miles by normal car, compare the cost of doing that this year compared to last year driving 1,000 mile, it's going to cost you about $30 more this year. If you're driving an SUV 1,000 miles, it'll cost you about $40 more this year. So I think put in context, yes, people are going to spend more on gas for their vacations, but it's perhaps something that's manageable, and people are going to look at that extra $30 or $40 and say, 'Look, it's worth it, it's worth it for me to get away, get away with the kids, do something fun.' So I think the bottom line is that we may not have as bad of a vacation summer, and those businesses may not be suffering as much as you might think because of high gas prices."

Posted by Dave at July 14, 2008 08:00 AM