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1 CONFIDENTIAL FOR INTERNAL USE ONLY
AAA Memorial Day 2013 Travel Forecast
Prepared for:
Prepared for:
American Automobile Association
May 22, 2013
1 IHS / AAA 2013 Memorial Day Forecast
Table of Contents
Table of Contents .................................................................................................................................................................... 1
Holiday Forecast Methodology: A Brief Overview ................................................................................................................... 2
2013Memorial Day HolidayTravel Forecast ............................................................................................................................ 3
Travel by Mode of Transportation ........................................................................................................................................... 5
Travel by Region: East North Central ..................................................................................................................................... 8
Travel by Region: East South Central ................................................................................................................................... 10
Travel by Region: Middle Atlantic ......................................................................................................................................... 12
Travel by Region: Mountain .................................................................................................................................................. 14
Travel by Region: New England............................................................................................................................................ 16
Travel by Region: Pacific ...................................................................................................................................................... 18
Travel by Region: South Atlantic ........................................................................................................................................... 20
Travel by Region: West North Central .................................................................................................................................. 22
Travel by Region: West South Central .................................................................................................................................. 24
Memorial Day 2013 Holiday Traveler Profile Survey Methodology ...................................................................................... 26
Change in the Average Memorial Day Traveler .................................................................................................................... 27
Travel Distances ................................................................................................................................................................... 28
Total Spending ...................................................................................................................................................................... 29
Party Composition ................................................................................................................................................................. 31
Activities ................................................................................................................................................................................ 32
The Impact of Fuel Prices on Travel Plans ........................................................................................................................... 34
Addendum 1: US Economic Forecast Summary: ................................................................................................................. 35
Addendum 2: US Regional Forecast Summary .................................................................................................................... 37
Regional definitions used throughout the report:
East North Central (ENC): IL, IN, MI, OH, WI
East South Central (ESC): AL, KY, MS, TN
Middle Atlantic (MATL): NJ, NY, PA
Mountain (MTN): AZ, CO, ID, MT, NM, NV, UT, WY
New England (NENG): CT, MA, ME, NH, RI, VT
South Atlantic (SATL): DC, DE, FL, GA, MD, NC, SC, VA, WV
West South Central (WSC): AR, LA, OK, TX
West North Central (WNC): IA, KS, MN, MO, ND, NE, SD
Pacific (PAC): AK, CA, HI, OR, WA
2 IHS / AAA 2013 Memorial Day Forecast
Holiday Forecast Methodology: A Brief Overview
The AAA Memorial Day 2013 Travel Forecast combines information from several sources to provide a prospective
assessment of likely travel patterns for the upcoming holiday weekend. This report comprises two key components: the
travel forecast and the holiday traveler profile. The travel forecast is based on economic conditions while the holiday
traveler profile is developed employing survey data on travel behaviors. This approach provides the most comprehensive
and detailed understanding of holiday travel at both the national and regional levels. In addition, the regional travel
sections in this report have been enhanced to incorporate information about the state of the local tourism industries
throughout the United States.
Holiday Travel Forecast
In cooperation with AAA, IHS developed an approach to forecast domestic travel volumes. The economic variables used
to forecast travel for the current holiday are leveraged from IHS. These data include macroeconomic drivers such as
employment, output, household net worth, asset prices including stock indices, interest rates, housing market indicators,
and variables related to travel and tourism, including prices of gasoline, airline travel, and hotel stays.
The historical travel volume estimates come from the ongoing travel survey database of D.K. Shifflet & Associates, the
premier source of US resident travel volume and behavior. DKSA interviews over 50,000 US households per month
tracking trip incidence, party composition, traveler behavior, and spending—all after the trips have been taken.
Holiday travel is forecast by person-trips, where a person-trip is defined as a trip that involves travel of 50 miles or more
away from home. In particular, AAA and IHS forecasts total US holiday travel, travel by mode of transportation, and travel
by US census region. The Travel Forecast presented in this report was prepared the week of April 22.
Holiday Traveler Profile
The Holiday Traveler Profile is a survey of intended travel behaviors related to party composition, travel distances, trip
expenditures, and vacation activities conducted by D.K. Shifflet & Associates. The initial survey includes 1,352
households, out of which only the respondents intending to travel during the designated holiday are interviewed in detail
about their anticipated trips. For Memorial Day 2013, 306 respondents were interviewed in detail about their intended
trips. The survey was in the field from Monday, April 8 to Friday, April 12, 2013.
Memorial Day Holiday Travel Period
For purposes of this forecast, the Memorial Day holiday travel period is defined as trips that include travel of 50 miles or
more away from home during the five-day period from Thursday, May 23 to Monday, May 27.
3 IHS / AAA 2013 Memorial Day Forecast
2013 Memorial Day Holiday Travel Forecast AAA and IHS project 34.8 million travelers will journey at least 50 miles from home this upcoming Memorial Day holiday
weekend. This represents a decrease of 0.9 percent relative to the 35.1 million trips that occurred over the holiday period
in 2012.
CHART 1
MEMORIAL DAY TRAVELERS 2001-2013
TOTAL PERSON-TRIPS*
* 2001-2012 represent historical travel results. 2013 is a forecast.
The economy’s fundamentals are improving, particularly in housing, but policy headwinds from Washington are still
holding it back for now. Economic growth in the first quarter was strong, with real GDP increasing 3.8 percent, but second-
quarter growth is expected to be just 0.4 percent as the impact of the sequester is felt, with those impacts expected to last
through the third quarter as well. Unemployment is falling, down to 7.6 percent, but a shrinking labor force has been a
bigger part of the decline recently than job growth. The nationwide labor force participation rate, the percentage of working
age people in the work force, fell to a 30-year low in March. Housing market news remains very encouraging, though, and
housing should continue to make a strong contribution to growth, particularly with consumers. Consumer spending is
forecast to increase 3.1 percent in the second quarter, which is higher than the 2.8 percent increase expected in personal
income, highlighting a willingness of consumers to spend despite some of the negative economic news.
Considering the ongoing stagnation within the recovery, it is not surprising that some consumer uneasiness exists. The
Reuters/University of Michigan Consumer Sentiment Index has fallen slightly the past few months and is now right in line
with last year’s results. The Bloomberg Consumer Comfort Index has improved slightly in the past month and is ahead of
the results at this time last year. The Conference Board’s Consumer Confidence Index for April was higher than the March
results, but slightly below the level for last year. The absence of consistent enthusiasm from consumers is offset partially
by an improved situation relative to last year with gasoline prices. As of the end of April, the national average price for
regular gasoline was just over eight percent lower than last year, a difference of over 30 cents. Gas prices do remain high,
however, making it unlikely that the price difference will be a major spur for travelers this holiday period.
Our survey of intending travelers supports the expectation of a rate of travelers similar to last year this travel period. Only
minor shifts are expected in the demographics of the travel party, while the differences in expected spending levels and
travel distances are also not significant.
35.933.2 30.9
34.6
44.0
36.0 35.331.6 30.5
34.8 34.3 35.1 34.8
-30%
-20%
-10%
0%
10%
20%
30%
0
10
20
30
40
50
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013(F)
(Pe
rce
nt
Ch
ange
)
(Mill
ion
)
Person Trips (left) % change (right)
4 IHS / AAA 2013 Memorial Day Forecast
The Memorial Day holiday commemorates those who have died in service to our country, while also serving as the
unofficial kickoff of the summer season. AAA and IHS forecast a minor decline in travelers this Memorial Day holiday of
0.9 percent, with 34.8 million travelers expected. Now four years removed from the recessionary declines of 2009, pent-up
demand has been largely satisfied. This figure is just above the average volume in the previous 12 years, which is 34.7
million.
5 IHS / AAA 2013 Memorial Day Forecast
“Last year, holiday spending
included airfare and hotel
accommodations and my 2013
Memorial Day holidays plans do
not include those costs.”
Pacific Respondent
Travel by Mode of Transportation AAA and IHS expect that 31.2 million travelers will choose the automobile as their primary mode of travel this Memorial
Day holiday period, making up 89 percent of all travelers. That share is up slightly from the 88 percent in 2012, and
represents an increase of 0.25 percent from the 2012 volume. The automobile
remains the dominant mode of travel for all holidays, including Memorial Day,
due to its convenience, affordability, and flexibility. That affordability will be
improved slightly this holiday period as gas prices are currently favorable
compared to last year. On April 30th, the national average price for a gallon of
regular unleaded gasoline is $3.51, which is about eight percent lower than at
the end of April 2012. That change represents a price difference of more than
30 cents, and although prices remain at historically high levels, the decline in
comparison to last year should help keep travel by automobile in line with last year’s volumes.
Air travel makes up the next largest share of travel for the Memorial Day holiday period, and this year 2.3 million travelers
are expected to take to the skies.
That represents a decline of just over eight percent from 2012, and a share of travelers at just under seven percent. This
year’s expected volume is just under the average of 2.4 million travelers seen since 2006.
Other modes of travel (buses, trains, watercraft, multi-modal travel) will account for the remaining four percent of the total
person-trips, with more than 1.3 million travelers expected to make use of these modes during their holiday trip. The
expected volume this year represents a decline of 12 percent from 2012, but is right in line with the average volume from
the past three years.
Auto89%
Air7%
Other4%
Chart 2Distribution of US Memorial Day Travelers by
Mode of Transportation
6 IHS / AAA 2013 Memorial Day Forecast
CHART 3
MEMORIAL DAY TRAVELERS 2001-2013
AUTOMOBILE PERSON-TRIPS*
*2001-2012 represent historical travel results. 2013 is a forecast.
CHART 4
MEMORIAL DAY TRAVELERS 2001-2013
AIR PERSON-TRIPS*
*2001-2012 represent historical travel results. 2013 is a forecast.
30.5
26.9 25.528.1
37.3
30.5 29.2
26.1 26.4
31.0 30.3 31.1 31.2
-30%
-20%
-10%
0%
10%
20%
30%
40%
0
10
20
30
40
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013(F)
(Pe
rce
nt
Ch
ange
)
(Mill
ion
)
Person-Trips (left) % change (right)
2.9 2.9
2.6
3.0
3.6
1.9
2.7
2.1 2.1
2.6 2.72.5
2.3
-60%
-20%
20%
60%
100%
140%
0
1
2
3
4
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013(F)
(Pe
rce
nt
Ch
ange
)
(Mill
ion
)
Person-Trips (left) % change (right)
7 IHS / AAA 2013 Memorial Day Forecast
CHART 5
MEMORIAL DAY TRAVELERS 2001-2013
OTHER TRAVEL MODES PERSON-TRIPS*
*2001-2012 represent historical travel results. 2013 is a forecast.
CHART 6
AVERAGE APRIL* GASOLINE PRICES
NATIONAL AVERAGE PER GALLON REGULAR UNLEADED
2001-2013
Source: AAA Fuel Gauge Report
* Average gasoline prices for the month of April are emphasized because prices observed several weeks prior to the holiday
are likely to influence holiday travel planning, while actual holiday prices are typically less influential.
2.5
3.5
2.7
3.5
3.1
3.63.4 3.4
1.9
1.2 1.4 1.5 1.3
-60%
-20%
20%
60%
100%
140%
0
1
2
3
4
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013(F)
(Pe
rce
nt
Ch
ange
)
(Mill
ion
)
Person-Trips (left) % change (right)
$1.55$1.40
$1.60 $1.79
$2.23
$2.76 $2.82
$3.43
$2.05
$2.85
$3.79 $3.89$3.55
-60%
-20%
20%
60%
100%
140%
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
(Pe
rce
nt
Ch
ange
)
$ per Gallon (left) % change (right)
8 IHS / AAA 2013 Memorial Day Forecast
Travel by Region: East North Central Travel from the East North Central region (ENC) is expected to fall by 1.2 percent this Memorial Day holiday period
relative to last year. The 5.62 million person-trips from the ENC region represent 12.1 percent of the population, which is
higher than the national frequency expected to travel (11 percent). The pace of recovery remains modest, as real GDP
growth continues to display an up-and-down growth pattern. The economy’s fundamentals are improving, particularly in
housing, but job creation is still below expectations. The ENC unemployment rate dropped in the first quarter, not because
employment rose but because the labor force fell; the nationwide labor force participation rate fell to a 30-year low in
March. Now four years removed from the recessionary declines of 2009, pent-up demand has been largely satisfied. As
such, IHS expects a modest decrease in travel originating from the ENC region relative to last Memorial Day, in following
with the muted pace of the current recovery. Travel by airplane from the ENC region is expected to decrease 7.6 percent
compared to Memorial Day 2012, while travel by automobile is expected to decline slightly (down 0.3 percent).
TABLE 1A
2013 MEMORIAL DAY TRAVEL FORECAST – EAST NORTH CENTRAL REGION AND UNITED STATES
The Bureau of Labor Statistics reported that nationwide payrolls rose by 88,000 jobs in March, which is a big
disappointment following gains of 148,000 and 268,000 jobs in January and February, respectively. The uneven pace of
job creation is eerily similar to last year, when payrolls in the ENC region steadily decelerated through 2012, starting at 2.3
percent in the first quarter (annualized) and falling to 0.4 percent by the fourth quarter. Faster employment growth in the
middle of last year was impeded by the
particularly poor performances of
Illinois, Michigan, and Wisconsin.
Michigan has turned things around and
gained some early-2013 momentum,
but the region’s unemployment rate
remains above eight percent and is just
0.2 percent lower compared to this time
last year. While the national
unemployment rate is forecast to
decline to 7.7 percent, this has more to
do with a reduction in the size of the
labor force than an increase in
employment.
Economic output in the ENC region is
anticipated to grow 1.4 percent in the
second quarter of 2013, coinciding with
the up-and-down growth pattern experienced nationwide. A swing in inventory accumulation from a big drag in the fourth
Memorial Day Travel
YOY %
Change Level
% of
Population
YOY %
Change Level
% of
Population
Total (millions of person trips) -1.2% 5.62 12.1% -0.9% 34.82 11.0%
Automobile (millions of person trips) -0.3% 5.14 11.0% 0.2% 31.15 9.8%
Air (millions of person trips) -7.6% 0.27 0.6% -8.2% 2.32 0.7%
Economy (2013Q2)
YOY %
Change Level
YOY %
Change Level
Unemployment Rate (YOY Change) -0.2% 8.1% -0.4% 7.7%
Real Gross Product ($, bn)* 1.4% 1,850 1.9% 13,807
Median Price, New Single Family Home ($, thn) -15.5% 195 1.1% 239
East North Central United States
-0.2%
1.4%0.9%
-0.4%
1.9%1.1% 1.2%
-8%
-6%
-4%
-2%
0%
2%
4%
Unemployment Rate
Real Gross State Product
Median Price New Single
Family Home
Real Disposable Personal Income
Chart 1A
YOY Growth, 2012Q2 to 2013Q2
East North Central and United States
ENC Total US
Soure: IHS Globql Insight
-15.5%
9 IHS / AAA 2013 Memorial Day Forecast
to a big plus in the first quarter accounted for most of the sway in national GDP growth. In the second quarter, inventory
accumulation will probably slow and become a drag once again. Consequently, IHS sees no immediate end to the up-
and-down pattern of growth in both the ENC region and the greater nation.
Real disposable personal income growth in the ENC is slightly below the national rate and is projected to rise 0.9 percent
as compared to one year ago (versus 1.2 percent
nationally). The increase in disposable income
means that potential travelers will have more
money in their pockets than last holiday, but the
expiry of the payroll tax cut and the
disappearance of special dividends are
headwinds to discretionary spending growth. The
regional housing market continues to struggle as
the median price of new single-family homes is
expected to fall 15.5 percent in the second
quarter. In order for the housing market to
improve significantly, there will need to be
economic recovery to the extent of providing
enough qualified borrowers and buyers to
stimulate demand, which will clear the existing
inventory from the market and drive new starts,
sales and construction employment.
In general, because the majority of travel occurs by automobile and remains within regional borders, regional travel ties
closely with the output generated by that region's leisure and hospitality industry. The following information provides a look
into the state of the local tourism industry in the East North Central region
The tourism industry in the ENC region, as measured by leisure and hospitality industry output (the value of goods and
services produced by the industry), has been decelerating since the first quarter of 2012, and increased by less than one
percent in the first two quarters of 2013. Despite the
deceleration, however, consumers are cautiously
increasing their spending on tourism. As labor markets
loosen, consumer spending growth will no longer be
limited by weak disposable income gains, and the tourism
industry will enjoy a more robust recovery.
Throughout all of the second quarter of 2013, total output
from the leisure and hospitality industry in the ENC region
is expected to increase by 0.5 percent relative to this time
last year (Chart 1B). The composition of tourism industry
output by state in the ENC region is fairly balanced (Chart
1C). With Chicago being one of the top cities for tourism
in the United States, it is no surprise that Illinois accounts
for about one-third of tourism output in the East North
Central region. Wisconsin accounts for the smallest
share, with 11.2 percent of total tourism output.
0%
1%
2%
3%
4%
5%
6%
2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2
CHART 1BREAL GROSS PRODUCT -- LEISURE & HOSPITALITY
YOY % CHANGE
ENC Total USSource: IHS Global Insight
IL, 33.7%
IN, 14.0%MI, 18.9%
OH, 22.1%
WI, 11.2%
CHART 1CREAL GROSS PRODUCT -- LEISURE & HOSPITALITY
EAST NORTH CENTRAL REGION MAKEUP BY STATE, 2013Q2
Source: IHS Global Insight
10 IHS / AAA 2013 Memorial Day Forecast
Travel by Region: East South Central Travel from the East South Central (ESC) region this Memorial Day is projected to increase 0.4 percent compared to year-
ago levels. With the greater economy continuing to grow at a sluggish pace, the expected increase in regional travel
compares favorably to the modest decline expected nationwide (down 0.9 percent). Housing markets are finally
recovering, and with gas prices safely below year-ago levels, IHS expects a slight increase in travel originating from the
ESC region, relative to last year. Even so, the good news remains tenuous. The unemployment rate in the ESC remains
stubbornly high at 7.8 percent, and it would be higher if not for a recent drop in the size of the labor force. Automobile
travel is expected to increase 0.9 percent while airplane travel is anticipated to fall 2.7 percent. Total person-trips in the
East South Central region are projected to account for 10 percent of the population, which is lower than the expected
nationwide frequency (11 percent).
TABLE 2A
2013 MEMORIAL DAY TRAVEL FORECAST – EAST SOUTH CENTRAL REGION AND UNITED STATES
Employment growth in the ESC region has been accelerating over the past year, led by strong performances in Kentucky
and Tennessee. Professional/business services and the manufacturing sector accounted for the largest shares of the
region’s employment gains. The auto sector, boosted by the new Volkswagen plant in Tennessee and large expansions at
existing facilities throughout the region, experienced particularly strong growth. The region’s key service sectors—finance,
education, health, and leisure/hospitality services—also posted gains over the past year. Yet despite these payrolls gains,
poor performers such as Mississippi and Alabama are weighing down on regional employment. As a result, the
unemployment rate is expected to
decline by just 0.4 percent in the
second quarter, compared to this time
last year.
Consumer spending is expected to
show strong growth in the first quarter
of this year, but the expiry of the
payroll tax cut will act as a drag on
future spending activity in the near-
term. Modest incomes, high debt
burdens, and low (though now rising)
house prices are some of the
obstacles to a robust spending
recovery that consumers face. The
housing recovery is supporting
consumer spending through its effect
Memorial Day Travel
YOY %
Change Level
% of
Population
YOY %
Change Level
% of
Population
Total (millions of person trips) 0.4% 1.88 10.0% -0.9% 34.82 11.0%
Automobile (millions of person trips) 0.9% 1.66 8.8% 0.2% 31.15 9.8%
Air (millions of person trips) -2.7% 0.14 0.8% -8.2% 2.32 0.7%
Economy (2013Q2)
YOY %
Change Level
YOY %
Change Level
Unemployment Rate (YOY Change) -0.4% 7.8% -0.4% 7.7%
Real Gross Product ($, bn)* 1.6% 627 1.9% 13,807
Median Price, New Single Family Home ($, thn) 4.0% 181 1.1% 239
East South Central United States
-0.4%
1.6%
4.0%
0.3%
-0.4%
1.9%
1.1% 1.2%
-2%
0%
2%
4%
6%
Unemployment Rate
Real Gross State Product
Median Price New Single
Family Home
Real Disposable Personal Income
Chart 2A
YOY Growth, 2012Q2 to 2013Q2
East South Central and United States
ESC Total US
Soure: IHS Globql Insight
11 IHS / AAA 2013 Memorial Day Forecast
on wealth and on housing-related purchases, and is probably one of the reasons why consumer spending growth was
strong in the first quarter. The median price of a new single-family home in the ESC region is expected to grow four
percent in the second quarter relative to the same quarter last year. While we expect home prices to steadily rise, the
impact of the housing recovery on consumer spending is unlikely to be maintained. As such, we expect a modest increase
in ESC travel this coming Memorial Day.
The ESC economy’s fundamentals are improving, but it is premature to conclude that the region is back to a sustained
growth track. Job creation continues to remain a concern and despite the housing recovery, consumers continue to
experience a drag from high (though falling) debt burdens. With weak improvements in employment and output, the ESC
region is expected to see a small 0.4 percent increase in total person-trips over the Memorial Day holiday, which
compares favorably to the 0.9 percent decline that is forecasted nationwide.
In addition to the originating travel forecast of person-trips from the East South Central region, the following information
provides a look into the state of the local tourism
industry in the region. In general, because the
majority of travel occurs by automobile and
remains within regional borders, regional travel
ties closely with the output generated by that
region's leisure and hospitality industry.
The ESC region lagged behind the nation in
terms of growth in real tourism output in the first
quarter of 2013 (0.8 percent compared to 1.3
nationally). In the second quarter, growth in the
ESC is expected to decelerate further, rising just
0.4 percent compared to this time last year.
Kentucky and Tennessee will maintain the
highest year-over-year growth in real tourism
output at 0.9 and 0.7 percent, respectively.
Alabama and Mississippi continue to struggle
to attract visitors, in following with their
sluggish pace of job creation.
Tennessee remains the largest state
contributing to the leisure and hospitality
industry in the region. The Volunteer State is
expected to account for 43.8 percent of
regional tourism output. Kentucky, Alabama,
and Mississippi will make up the remaining
three-fifths of the total.
AL, 19.4%
KY, 20.6%
MS, 16.2%
TN, 43.8%
CHART 2CREAL GROSS PRODUCT -- LEISURE & HOSPITALITY
EAST SOUTH CENTRAL REGION MAKEUP BY STATE, 2013Q2
Source: IHS Global Insight
0%
1%
2%
3%
4%
5%
6%
2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2
CHART 2BREAL GROSS PRODUCT -- LEISURE & HOSPITALITY
YOY % CHANGE
ESC Total USSource: IHS Global Insight
12 IHS / AAA 2013 Memorial Day Forecast
Travel by Region: Middle Atlantic Memorial Day holiday travel originating from the Middle Atlantic (MATL) region is forecasted to decline 0.9 percent relative
to one year ago. The economic recovery continues to advance at an uneven and largely modest pace, with combined real
gross state product growing just 2.1 percent compared to the second quarter of last year. The unemployment rate is
showing improvements, but the effect is due mainly to a shrinking labor force rather than a growing number of jobs. The
housing market news remains encouraging, but absent any meaningful job creation, households still face too many
negatives to allow a robust recovery in discretionary spending. The forecast for travel by automobile calls for a decline of
0.2 percent, while air travel is forecast to decrease by 6.9 percent. About 10.1 percent of the regional population is
expected to journey at least 50 miles away from home this holiday, a slightly lower frequency than is expected nationwide
(11 percent).
TABLE 3A
2013 MEMORIAL DAY TRAVEL FORECAST – MIDDLE ATLANTIC REGION AND UNITED STATES
The labor market in the MATL region fared reasonably well in 2012. Total payrolls grew 1.2 percent, but employment
levels remain below their pre-recession peak. The manufacturing sector is not yet on solid footing, and the finance sector
has entered a period of diminished returns. The uncertainty caused by the sequester and the impending debt-ceiling
agreement (July 2013) creates an unpredictable framework for businesses to make hiring decisions. The latest
employment reports remain weak, and much of the improvement in the unemployment rate is attributable to a decline in
the labor force participation rate, which hit a 30-year low in the most recent national household survey. This coming
Memorial Day, the unemployment rate in the MATL is projected to be 8.4 percent, which is still far above the national
average (7.7 percent), and somewhat
misleading in terms of the true slack
that remains in the regional labor
market.
While the job market continues to
struggle, the housing market recovery
is a welcome sign that the economy’s
fundamentals are improving. In the
MATL region, the median price of new
single family homes increased sharply
in the first quarter, compared to year-
ago prices. Prices are forecast to rise
by a lesser degree in the second
quarter (0.4 percent relative to last
year). Slowing population growth and
Memorial Day Travel
YOY %
Change Level
% of
Population
YOY %
Change Level
% of
Population
Total (millions of person trips) -0.9% 4.17 10.1% -0.9% 34.82 11.0%
Automobile (millions of person trips) -0.2% 3.78 9.1% 0.2% 31.15 9.8%
Air (millions of person trips) -6.9% 0.26 0.6% -8.2% 2.32 0.7%
Economy (2013Q2)
YOY %
Change Level
YOY %
Change Level
Unemployment Rate (YOY Change) -0.2% 8.4% -0.4% 7.7%
Real Gross Product ($, bn)* 2.1% 2,009 1.9% 13,807
Median Price, New Single Family Home ($, thn) 0.4% 346 1.1% 239
Middle Atlantic United States
-0.2%
2.1%
0.4%1.1%
-0.4%
1.9%1.1% 1.2%
-2%
0%
2%
4%
6%
Unemployment Rate
Real Gross State Product
Median Price New Single
Family Home
Real Disposable Personal Income
Chart 3A
YOY Growth, 2012Q2 to 2013Q2
Middle Atlantic and United States
MATL Total US
Source: IHS Global Insight
13 IHS / AAA 2013 Memorial Day Forecast
high foreclosure rates remain a threat to future price increases, but MATL prices should continue to slowly recover.
Despite recent improvements in the housing market, the MATL recovery has not yet moved to a sustained, stronger,
growth path. Real gross state product for the region is expected to be 2.1 percent higher this Memorial Day than last, but
growth continues to oscillate between periods of expansion and relative contraction. In annualized percent change terms,
by which economic output is usually measured, regional output is expected to be flat in the second quarter, following 5.3
percent growth in the first quarter. The up-and-down growth pattern seen in the MATL is consistent with that of the greater
nation. A swing in inventory accumulation from a big drag in the fourth quarter (0.3 percent annualized growth) to a big
plus in the first quarter (3.8 percent) accounted for most of the swing in national GDP growth. In the second quarter,
inventory accumulation will probably slow and become a drag once again, as real GDP is forecast to rise just 0.4 percent.
In addition to the originating travel forecast of person-trips from the Middle Atlantic region, the following information
provides a look into the state of the local tourism industry in the region. In general, because the majority of travel occurs
by automobile and remains within regional borders, regional travel ties closely with the output generated by that region's
leisure and hospitality industry.
The tourism industry has witnessed a
slowdown in output (the value of goods and
services produced by the leisure and hospitality
industry) at both the national and regional
levels since the beginning of last year. Chart 3B
shows that growth in tourism output in the
Middle Atlantic slowed from 3.9 percent in the
first quarter of 2012 to 1.4 percent in the
second. Regional tourism output is also
expected to decelerate from the first-to-second
quarter of this year (2.4 to 2.3 percent), albeit at
a lesser pace. The relative nationwide figure for
comparison is a one percent annual increase in
tourism output this Memorial Day.
New York State contributes 57.9 percent of the
Middle Atlantic region's tourism output, which
accounts for more than half of the industry
output. This remains unsurprising, since New
York City is the top tourist destination in the
country. Pennsylvania and New Jersey do
contribute large amounts to the Middle Atlantic
regional tourism output, accounting for 23 and
19.1 percent, respectively.
0%
1%
2%
3%
4%
5%
6%
2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2
CHART 3BREAL GROSS PRODUCT -- LEISURE & HOSPITALITY
YOY % CHANGE
MATL Total USSource: IHS Global Insight
NJ, 19.1%
NY, 57.9%
PA, 23.0%
CHART 3CREAL GROSS PRODUCT -- LEISURE & HOSPITALITY
MIDDLE ATLANTIC REGION MAKEUP BY STATE, 2013Q2
Source: IHS Global Insight
14 IHS / AAA 2013 Memorial Day Forecast
Travel by Region: Mountain The holiday forecast for the Mountain (MTN) region calls for a 0.6 percent decline in travel this Memorial Day versus
2012. The Mountain region continues to recover at a slow-moving pace, consistent with the unstable growth pattern in real
gross state product. A declining unemployment rate, usually a welcomed sign of improvement, belies the worrying fact
that the labor force participation rate has fallen to a new 30-year low nationwide. With the pent-up demand for Memorial
Day travel now largely satisfied, IHS anticipates a decline in total person-trips originating from the Mountain region.
Automobile travel is expected to grow a meager 0.1 percent, while air travel is forecasted to decrease 6.5 percent
compared to last Memorial Day. The percentage of travelers from the Mountain region expected to travel (11.7 percent) is
higher than the projected national frequency (11 percent).
TABLE 4A
2013 MEMORIAL DAY TRAVEL FORECAST – MOUNTAIN REGION AND UNITED STATES
The Mountain region continues to lead the pack in terms of economic growth. Real gross state product (GSP) in the
combined Mountain states is expected to grow 2.1 percent in the second quarter, the highest year-over-year growth
among the nine census regions. The regional expansion is being fueled by several factors. Hydarulic fracturing, or the
ability to access oil and gas deposits locked up in shale and tight sands, is adding to the region’s already prolific mining
industry. Population growth is also adding to potential demand, especially for service-related jobs, with several Mountain
states among the top 15 in the country over the past few years.
Even so, the recovery from the recession
continues to bump along at an uneven,
and overall modest pace. From the third
quarter of last year to the first quarter of
2013, real GSP has oscillated between
periods of 3.2, 1.2 and 3.4 percent
annualized growth, respectively. In the
second quarter, real GSP is expected to
decelerate once again, growing at an
annual rate of just 0.6 percent. The up-
and-down nature of economic growth in
the Mountain states is consistent with that
of the greater nation. With continued
swings in inventory accumulation and a
pull down in government spending from
the sequester, IHS expects economic
growth in the Mountain region to continue
Memorial Day Travel
YOY %
Change Level
% of
Population
YOY %
Change Level
% of
Population
Total (millions of person trips) -0.6% 2.68 11.7% -0.9% 34.82 11.0%
Automobile (millions of person trips) 0.1% 2.36 10.3% 0.2% 31.15 9.8%
Air (millions of person trips) -6.5% 0.22 1.0% -8.2% 2.32 0.7%
Economy (2013Q2)
YOY %
Change Level
YOY %
Change Level
Unemployment Rate (YOY Change) -0.8% 7.2% -0.4% 7.7%
Real Gross Product ($, bn)* 2.1% 901 1.9% 13,807
Median Price, New Single Family Home ($, thn) 1.5% 197 1.1% 239
Mountain United States
-0.8%
2.1%
1.5% 1.2%
-0.4%
1.9%
1.1% 1.2%
-2%
0%
2%
4%
Unemployment Rate
Real Gross State Product
Median Price New Single
Family Home
Real Disposable Personal Income
Chart 4A
YOY Growth, 2012Q2 to 2013Q2
Mountain and United States
MTN Total US
Source: IHS Global Insight
15 IHS / AAA 2013 Memorial Day Forecast
to move at an uneven and modest pace.
The unemployment rate in the Mountain region (7.2 percent) remains the fourth-lowest among all census regions, and 0.8
percent lower than this time last year. This is partly due to an increase in energy activity (e.g., mining, oil and natural gas
extraction) but is also, to some extent, merely a statistical artifact. The latest US household survey saw the labor force
decline by 496,000 workers, while the number of people employed also fell, but by less than the size of the labor force. As
a result, the labor force participation rate fell to a new 30-year low (63.3 percent), leading to a drop in the unemployment
rate. Meanwhile, the March employment report, which comes from a different survey, was much worse than expected with
only 88,000 new jobs created. Taken together, the reduction in unemployment is likely overstating the strength of the
regional labor market.
In addition to the originating travel forecast of
person-trips from the Mountain region, the
following information provides a look into the
state of the local tourism industry. In general,
because the majority of travel occurs by
automobile and remains within regional borders,
regional travel ties closely with the output
generated by that region's leisure and hospitality
industry.
The tourism industry in the Mountain region, as
measured by real gross product in leisure and
hospitality (the value of goods and services
produced by the leisure and hospitality industry)
has been decelerating since the third quarter of
2012. Even so, the Mountain region has been
outperforming the national tourism recovery over
that same period.
In the second quarter of 2013, leisure and hospitality output in the Mountain region is anticipated to rise 2.4 percent,
relative to year-ago levels (the national growth rate for comparison is one percent). Among the participating Mountain
states, Nevada is expected to see the largest
increase in tourism growth (3.2 percent),
followed closely by Wyoming (three percent)
and Arizona (2.7 percent). Utah is at the other
end of the spectrum and is expected to realize
just 1.1 percent annual growth in tourism output
during the second quarter of this year.
The Mountain states of Nevada, Colorado, and
Arizona together contribute 78.9 percent of
tourism output to the region. Nevada, which
includes the major tourist city of Las Vegas, is
expected to supply 38.1 percent of regional
tourism output. Colorado and Arizona are
expected to add 20.8 and 20 percent,
respectively, to the regional tourism sector.
0%
1%
2%
3%
4%
5%
6%
2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2
CHART 4BREAL GROSS PRODUCT -- LEISURE & HOSPITALITY
YOY % CHANGE
MTN Total USSource: IHS Global Insight
AZ, 20.0%
CO, 20.8%
ID, 3.3%
MT, 3.1%NM, 5.1%
NV, 38.1%
UT, 6.9%WY, 2.6%
CHART 4CREAL GROSS PRODUCT -- LEISURE & HOSPITALITY
MOUNTAIN REGION MAKEUP BY STATE, 2013Q2
Source: IHS Global Insight
16 IHS / AAA 2013 Memorial Day Forecast
Travel by Region: New England
Memorial Day travel originating from the New England (NENG) region is forecast to decline 0.7 percent relative to 2012,
as the recovery continues to advance in fits and starts. Real gross state product (GSP) in the combined New England
States is bouncing up and down, consistent with the growth pattern in the nation’s real gross domestic product (GDP).
Modest employment growth and the expiry of the payroll tax cut are likely to cut into consumer spending, thereby dimming
the prospects for Memorial Day trips in New England. Travel by automobile is projected to rise just 0.1 percent, compared
to last year, while air travel is expected to fall 8.1 percent. The forecast indicates that 10.7 percent of the New England
population will travel this upcoming Memorial Day holiday period, which is lower than the expected national frequency (11
percent). A slightly higher percentage of the regional population will travel by air than the broader nation (0.8 percent
compared to 0.7 percent).
TABLE 5A
2013 MEMORIAL DAY TRAVEL FORECAST – NEW ENGLAND REGION AND UNITED STATES
The New England economy continued to recover at a slow pace in 2012, with limited progress in the regional labor
market. Although the market reported a mix of gains and losses across all sectors, the healthcare and professional,
scientific, and technical services sectors were the strongest performers, which is good news for the region given the high
growth potential of these sectors. The regional unemployment rate has been on a steady decline since reaching its peak
in 2010, and is expected to fall to 6.9 percent in the second quarter of 2013, third-lowest among the nine census regions.
While this is normally an encouraging sign, the drop in national unemployment from the most recent household survey
resulted from fewer people in the labor force rather than more people working. The labor force participation rate or the
ratio between the labor force and the
overall size of the working-age
population is now at a 30-year low.
Demographics are partially pushing
the participation rate lower, but the
absence of a cyclical revival to draw
potential workers back into the labor
force is a sign of continued weakness
in the labor market.
The New England housing market
remains depressed, but recent
indicators have shown clear signs of
improvement. Indeed, regional
housing starts increased 28.4 percent
in the first quarter of 2013, relative to
Memorial Day Travel
YOY %
Change Level
% of
Population
YOY %
Change Level
% of
Population
Total (millions of person trips) -0.7% 1.56 10.7% -0.9% 34.82 11.0%
Automobile (millions of person trips) 0.1% 1.42 9.7% 0.2% 31.15 9.8%
Air (millions of person trips) -8.1% 0.12 0.8% -8.2% 2.32 0.7%
Economy (2013Q2)
YOY %
Change Level
YOY %
Change Level
Unemployment Rate (YOY Change) -0.3% 6.9% -0.4% 7.7%
Real Gross Product ($, bn)* 1.5% 740 1.9% 13,807
Median Price, New Single Family Home ($, thn) 0.1% 391 1.1% 239
New England United States
-0.3%
1.5%
0.1%
0.6%
-0.4%
1.9%
1.1%1.2%
-1%
-1%
0%
1%
1%
2%
2%
3%
Unemployment Rate
Real Gross State Product
Median Price New Single
Family Home
Real Disposable Personal Income
Chart 5A
YOY Growth, 2012Q2 to 2013Q2
New England and United States
NENG Total US
Source: IHS Global Insight
17 IHS / AAA 2013 Memorial Day Forecast
last year, and are expected to grow 4.4 percent in the second quarter. The prolonged duration of the current recovery has
enabled a gradual release in the pent-up demand for household formation. At the same time, depressed construction
levels have ensured that the supply of vacant homes could be pared down, despite poor housing market conditions.
Housing prices have also shown signs of stabilizing, but high foreclosure rates and slowing regional population growth
remain a threat to future price increases. In the New England region, the median price of new single-family homes is
expected to inch upwards by 0.1 percent in the second quarter, relative to year-ago prices.
Households still face too many negatives to allow a robust consumer spending recovery, one of which is the expiry of the
payroll tax cut. IHS expects about a 1 percent loss of disposable income due to the ending of the payroll tax provision. As
such, real disposable personal incomes are expected to rise just 0.6 percent in the second quarter compared to one year
ago (versus 1.2 percent nationally). Gasoline prices have been slowly retreating since February, but high debt burdens,
modest employment growth, and a lack of
confidence in the government’s ability to
make things better are likely to hasten any
spending increases on discretionary items
such as travel.
In addition to the originating travel forecast of
person-trips from the New England region,
the following information provides a look into
the state of the local tourism industry in the
region. In general, because the majority of
travel occurs by automobile and remains
within regional borders, regional travel ties
closely with the output generated by that
region's leisure and hospitality industry.
The New England tourism industry has
experienced sluggish growth over the past
year and trails considerably behind the
national tourism industry. Leisure and hospitality
industry output (the value of goods and services
produced by the leisure and hospitality industry) in
New England contracted 0.7 percent in the first
quarter of 2013 and is expected to show meager
growth of just 0.3 percent in the second quarter.
Massachusetts remains the largest contributor of
tourism output to the New England economy,
accounting for 51.9 percent of regional tourism
output. Connecticut is the second largest
contributor (19.9 percent) followed by New
Hampshire (8.3 percent), Maine (8.0 percent),
Rhode Island (6.9 percent), and Vermont (4.9
percent).
CT, 19.9%
MA, 51.9%
ME, 8.0%
NH, 8.3%
RI, 6.9%VT, 4.9%
CHART 5CREAL GROSS PRODUCT -- LEISURE & HOSPITALITY
NEW ENGLAND REGION MAKEUP BY STATE, 2013Q2
Source: IHS Global Insight
-1%
0%
1%
2%
3%
4%
5%
6%
7%
2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2
CHART 5BREAL GROSS PRODUCT -- LEISURE & HOSPITALITY
YOY % CHANGE
NENG Total USSource: IHS Global Insight
18 IHS / AAA 2013 Memorial Day Forecast
Travel by Region: Pacific Memorial Day travel in the Pacific region is projected to be down 2.2 percent from year-ago levels. As is true with the
nation as a whole, indicators of economic recovery in the Pacific are mixed and have fluctuated in recent months. Despite
gas prices being down eight percent from 2012, the sluggish recovery is projected to put downward pressure on Pacific
travel volumes. The forecast calls for air travel to decrease 12.5 percent and automobile travel to decrease marginally
compared to last year. IHS forecasts that 10.7 percent of Pacific residents will travel this holiday, which is slightly below
the percentage of the national population expected to travel (11 percent). The Pacific region is typically projected to see a
higher than average share of its population travel by air over the holidays (compared to other regions), and despite a 12.5
percent decrease in air person-trips, this is the case for Memorial Day as well (0.9 percent compared to the national figure
of 0.7 percent).
TABLE 6A
2013 MEMORIAL DAY TRAVEL FORECAST – PACIFIC REGION AND UNITED STATES
While the unemployment rate in the Pacific region remains the highest of any census region at 9.1 percent, the region saw
the nation's largest year-over-year drop in unemployment. However, the decrease in the unemployment rate is less
indicative of economic improvement than of migration out of the labor force. With the exception of California, all states
within the Pacific region are expected to see a year-over-year decline in the labor force participation rate in the second
quarter of 2013.
There are some bright spots in the overall economic outlook. Growth in regional output is expected to rise 2.1 percent in
the second quarter of 2013 as
compared to the same quarter last
year. This growth is expected to be
somewhat higher than the expected
increase in national output (1.9
percent). Year-over-year growth in real
disposable income is expected to be
on a par with the national rate of 1.2
percent. While the increase in real
incomes is rather modest, a reduction
in the personal saving rate has
contributed to an increase in
consumer spending, as consumers
are spending more at the expense of
saving less.
The housing market is also showing
Memorial Day Travel
YOY %
Change Level
% of
Population
YOY %
Change Level
% of
Population
Total (millions of person trips) -2.2% 5.48 10.7% -0.9% 34.82 11.0%
Automobile (millions of person trips) -0.1% 4.70 9.1% 0.2% 31.15 9.8%
Air (millions of person trips) -12.5% 0.47 0.9% -8.2% 2.32 0.7%
Economy (2013Q2)
YOY %
Change Level
YOY %
Change Level
Unemployment Rate (YOY Change) -1.0% 9.1% -0.4% 7.7%
Real Gross Product ($, bn)* 2.1% 2,436 1.9% 13,807
Median Price, New Single Family Home ($, thn) 2.9% 327 1.1% 239
Pacific United States
-1.0%
2.1%
2.9%
1.2%
-0.4%
1.9%
1.1% 1.2%
-2%
0%
2%
4%
Unemployment Rate
Real Gross State Product
Median Price New Single Family
Home
Real Disposable Personal Income
Chart 6A
YOY Growth, 2012Q2 to 2013Q2
Pacific and United States
PAC Total US
Source: IHS Global Insight
19 IHS / AAA 2013 Memorial Day Forecast
signs of life, but again, results across the region are mixed. The median price of new single-family homes in the Pacific is
projected to increase 2.9 percent from this time last year. The regional price increase is being driven primarily by
California, where prices are projected to be up three percent annually in the second quarter. Hawaii is also expected to
see a marginal price increase, while Washington, Oregon, and Alaska are projected to show declines. Home prices in
these states remain relatively low due to the huge overhang of empty dwellings. As lending standards tighten, less credit
is available to finance home ownership. Credit availability is gradually improving, but its slow recovery coupled with
insufficient job growth has contributed to the lack of recovery in the housing market. A growing economy will provide
consumers with the income and confidence to purchase the excess supply available in the housing market and in time,
drive prices back to pre-recession levels.
Continued economic uncertainty and the absence
of strong economic recovery is expected to elicit
caution in discretionary travel spending. A lower
personal saving rate as a percentage of
disposable income, and increased real gross
state output, will not be enough to spark higher
levels of travel traffic this Memorial Day weekend.
Gas prices are expected to have little influence
on travel plans, though a spike in prices before
the holiday weekend may cause some travelers
to curb spending on non-fuel travel expenditures.
In addition to the originating travel forecast of
person-trips from the Pacific region, the following
information provides a look into the state of the
local tourism industry in the region. In general,
because the majority of travel occurs by
automobile and remains within regional borders,
regional travel ties closely with the output
generated by that region's leisure and hospitality industry.
In terms of growth in total leisure and hospitality
output (the value of goods and services produced
by the leisure and hospitality industry), the Pacific
region had been trailing the national recovery
until the fourth quarter of 2011, when it began to
grow faster than the nation. Growth in national
leisure and hospitality output has slowed since
the second quarter of 2012, a trend that carried
into most of the regions.
The Pacific region's leisure and hospitality output
is projected to rise just 0.8 percent over second-
quarter output in 2012, which is slightly below the
national figure of one percent. Hawaii and Alaska
are expected to see the strongest improvements
in leisure and hospitality output, growing 5.1 and
2.3 percent, respectively, compared to this time
last year.
0%
1%
2%
3%
4%
5%
6%
2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2
CHART 6BREAL GROSS PRODUCT -- LEISURE & HOSPITALITY
YOY % CHANGE
PAC Total USSource: IHS Global Insight
AK, 1.5%
CA, 75.4%
HI, 6.0%
OR, 5.4%
WA, 11.8%
CHART 6CREAL GROSS PRODUCT -- LEISURE & HOSPITALITY
PACIFIC REGION MAKEUP BY STATE, 2013Q2
Source: IHS Global Insight
20 IHS / AAA 2013 Memorial Day Forecast
Travel by Region: South Atlantic Memorial Day travel from the South Atlantic (SATL) region is estimated to fall 1.1 percent this Memorial Day holiday as
compared to 2012. The pent-up demand from people foregoing travel during the recession has largely been satisfied, as
evidenced by increases in Memorial Day travel the past few years. Air travel is projected to fall 9.3 percent, while
automobile travel is expected to rise by just 0.1 percent. The forecast calls for 10.6 percent of the regional population to
travel this Memorial Day holiday period, slightly below the national share of 11 percent.
TABLE 7A
2013 MEMORIAL DAY TRAVEL FORECAST – SOUTH ATLANTIC REGION AND UNITED STATES
The economic recovery in the South Atlantic region is progressing slowly, as evidenced by the region’s declining rate of
unemployment and moderate increases in regional output. In the second quarter of 2013, the regional unemployment rate
is expected to fall by 0.6 percent from last year's second-quarter levels. Real gross state product across the region is
expected to increase 1.8 percent, on a par with national output growth. Personal income gains have been small (1.1
percent), and increases in consumer spending, supported by a reduction in the personal saving rate, are being tempered
by continued uncertainty surrounding the economy and the labor market.
While a reduction in the personal saving rate is supporting an increase in consumer spending, consumers still face mixed
signals about the trajectory of the regional economy that will likely prevent a strong recovery in spending. Decreases in
the unemployment rate for the majority of states in the region are a sign of people dropping out of the labor force rather
than finding employment. Job creation across the country has not kept pace with those leaving the labor market, nor has it
been sufficient in terms of putting a
dent in the large number of workers
who lost work during the recession.
The labor force participation rate is
expected to be lower than it was a year
ago in five of the eight states within the
region, signaling that discouraged
workers may be temporarily or
permanently leaving the labor market.
Home prices, on the other hand, seem
to be finally recovering. The median
price of new single-family homes in the
South Atlantic is projected to increase
by 3.7 percent, relative to spring 2012.
Every state in the region is expected to
see an increase in new home prices in
Memorial Day Travel
YOY %
Change Level
% of
Population
YOY %
Change Level
% of
Population
Total (millions of person trips) -1.1% 6.55 10.6% -0.9% 34.82 11.0%
Automobile (millions of person trips) 0.1% 5.96 9.6% 0.2% 31.15 9.8%
Air (millions of person trips) -9.3% 0.44 0.7% -8.2% 2.32 0.7%
Economy (2013Q2)
YOY %
Change Level
YOY %
Change Level
Unemployment Rate (YOY Change) -0.6% 7.7% -0.4% 7.7%
Real Gross Product ($, bn)* 1.8% 2,476 1.9% 13,807
Median Price, New Single Family Home ($, thn) 3.7% 253 1.1% 239
South Atlantic United States
-0.6%
1.8%
3.7%
1.1%
-0.4%
1.9%
1.1% 1.2%
-1%
0%
1%
2%
3%
4%
5%
UnemploymentRate
Real Gross StateProduct
Median PriceNew Single Family
Home
Real DisposablePersonal Income
Chart 7A
YOY Growth, 2012Q2 to 2013Q2
South Atlantic and United States
SATL Total US
Source: IHS Global Insight
21 IHS / AAA 2013 Memorial Day Forecast
the second quarter. Sales of existing homes, another indicator of the health of the housing market, are also projected to
be higher than they were in the second quarter of 2012 in all nine South Atlantic states. Improving personal credit
conditions are revitalizing the housing market by allowing more potential homebuyers to enter the market and reduce the
quantity of excess empty homes.
Gas prices are expected to have a negligible impact on travel decisions this Memorial Day weekend. The average
gasoline price is down more than eight percent from the second quarter of 2012. An increase in the gas price prior to the
Memorial Day holiday is unlikely to influence the decision of whether or not to travel, but it may convince some travelers to
reallocate travel budgets to account for higher
fuel costs by spending less in other areas.
In addition to the originating travel forecast of
person-trips from the South Atlantic region,
the following information provides a look into
the state of the local tourism industry in the
region. In general, because the majority of
travel occurs by automobile and remains
within regional borders, regional travel ties
closely with the output generated by that
region's leisure and hospitality industry.
The tourism industry in the SATL region, as
measured by leisure and hospitality industry
output (the value of goods and services
produced by the leisure and hospitality
industry), has been growing since the third
quarter of 2011 and is currently growing at a
pace slightly below the national tourism
industry. In the second quarter of 2013, total output from the leisure and hospitality industry in the SATL region is
expected to grow by 0.8 percent from the
year prior (compared to one nationwide).
Florida contributes 40.7 percent of tourism
output to the South Atlantic tourism industry
with its draw of unique beaches and
amusement parks. Georgia contributes the
second-largest share of tourism output
(13.1 percent), with Atlanta being one of the
top cities for tourism in the United States.
North Carolina and Virginia contribute 12
and 11.2 percent, respectively, followed by
Maryland (9.1 percent), South Carolina (6.3
percent), the District of Columbia (3.9
percent), West Virginia (2.3 percent), and
Delaware (1.3 percent).
0%
1%
2%
3%
4%
5%
6%
2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2
CHART 7BREAL GROSS PRODUCT -- LEISURE & HOSPITALITY
YOY % CHANGE
SATL Total USSource: IHS Global Insight
DC, 3.9%
DE, 1.3%
FL, 40.7%
GA, 13.1%
MD, 9.1%
NC, 12.0%
SC, 6.3%
VA, 11.2%
WV, 2.3%
CHART 7CREAL GROSS PRODUCT -- LEISURE & HOSPITALITY
SOUTH ATLANTIC REGION MAKEUP BY STATE, 2013Q2
Source: IHS Global Insight
22 IHS / AAA 2013 Memorial Day Forecast
Travel by Region: West North Central
The West North Central (WNC) region is projected to see a one percent decrease in Memorial Day travel volumes this
year compared to 2012. The gradual recovery of the WNC regional economy mirrors the national trend. The projected
decline in total person-trips is driven largely by the normalization of travel patterns following a three-year release of pent-
up demand from 2010 through 2012. Air travel is expected to decline 7.9 percent, while automobile travel is expected to
remain effectively unchanged relative to last Memorial Day. Roughly 14.2 percent of the population in the West North
Central region, which typically sees a higher share of the population travel than other regions, is expected to travel this
holiday.
TABLE 8A
2013 MEMORIAL DAY FORECAST – WEST NORTH CENTRAL REGION AND UNITED STATES
The WNC region continues to show all the signs of an improved labor market. The West North Central boasts the lowest
unemployment rate among the nine census regions (5.4 percent) and that is substantially below the national average (7.7
percent). At the state level, North Dakota is leading the pack in terms of job growth. The Peace Garden State has the
fastest-growing job market and the lowest unemployment rate in the country, fueled by the rapid expansion of its energy
sector centered on activity in the Bakken shale. Minnesota ranks second in the region after North Dakota in terms of job
creation, with every sector in the economy adding payrolls. In the middle of the pack are the stable economies of Iowa,
South Dakota, and Kansas, where slow rates of population and labor force growth have been balanced by recent gains in
farm income.
In some dimensions, the WNC
economy is moving in step with the
greater nation. Real gross state
product across the region is forecast
to grow 1.3 percent in the second
quarter of 2013, which is slightly below
the expected increase in national
output (1.9 percent). Real disposable
incomes in the WNC are also
expected to rise at a similar, though
slightly higher pace than the country at
large this coming Memorial Day (1.7
percent compared to 1.2 percent
nationally).
The housing market in the WNC is
laggard in an otherwise upward
Memorial Day Travel
YOY %
Change Level
% of
Population
YOY %
Change Level
% of
Population
Total (millions of person trips) -1.0% 2.97 14.2% -0.9% 34.82 11.0%
Automobile (millions of person trips) 0.0% 2.65 12.7% 0.2% 31.15 9.8%
Air (millions of person trips) -7.9% 0.12 0.6% -8.2% 2.32 0.7%
Economy (2013Q2)
YOY %
Change Level
YOY %
Change Level
Unemployment Rate (YOY Change) -0.3% 5.4% -0.4% 7.7%
Real Gross Product ($, bn)* 1.3% 878 1.9% 13,807
Median Price, New Single Family Home ($, thn) -13.5% 200 1.1% 239
West North Central United States
-0.3%
1.3% 1.7%
-0.4%
1.9%1.1% 1.2%
-8%
-6%
-4%
-2%
0%
2%
4%
Unemployment Rate
Real Gross State Product
Median Price New Single
Family Home
Real Disposable Personal Income
Chart 8A
YOY Growth, 2012Q2 to 2013Q2
West North Central and United States
WNC Total US
Source: IHS Global Insight
-13.5%
23 IHS / AAA 2013 Memorial Day Forecast
trending regional economy. Unable to sustain the spike in home prices from this time last year, the median price of new
single-family homes is forecast to decrease 13.5 percent in the second quarter of 2013, compared to year-ago levels. The
price depreciation in the WNC region diverges from the upward trend seen in the national housing market, in which home
prices are projected to grow 1.1 percent. The states in the WNC region saw home prices increase through the third
quarter of 2012, but the market has since taken a downward turn. In South Dakota, median home prices are projected to
be 17 percent lower in the second quarter of 2013 than they were one year ago.
Fuel prices in the region are higher than in
January of this year but lower than they were in
the second quarter of 2012. The decision to
travel is unlikely to be influenced significantly by
gas prices this year, but a price spike before the
holiday weekend may encourage travelers to
reallocate expenses to accommodate for an
increase in fuel costs.
In addition to the originating travel forecast of
person-trips from the West North Central region,
the following information provides a look into the
state of the local tourism industry in the region.
In general, because the majority of travel occurs
by automobile and remains within regional
borders, regional travel ties closely with the
output generated by that region's leisure and
hospitality industry.
Growth in the WNC's tourism industry has been decelerating since the first quarter of 2011, as measured by leisure and
hospitality industry output (the value of goods and services produced by the leisure and hospitality industry). Regional
tourism output growth has been
underperforming the national recovery.
In the second quarter of 2013, total output
from the leisure and hospitality industry in the
WNC region is projected to see a year-to-
year increase of 0.4 percent, which is lower
than the growth expected nationwide (one
percent). North Dakota is expected to see
the largest annual increase (1.8 percent) in
tourism output within the region.
The composition of tourism industry output
by state in the West North Central is
dominated by Missouri and Minnesota, which
together account for over 60 percent of
tourism output in the region. Iowa (12.5
percent) is the third-largest contributor,
followed by Kansas (11.2 percent), Nebraska
(7.1 percent), South Dakota (4.4 percent),
and North Dakota (3.3 percent).
-1%
0%
1%
2%
3%
4%
5%
6%
2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2
CHART 8BREAL GROSS PRODUCT -- LEISURE & HOSPITALITY
YOY % CHANGE
WNC Total USSource: IHS Global Insight
IA, 12.5%
KS, 11.2%
MN, 29.9%
MO, 31.6%
ND, 3.3%
NE, 7.1%SD, 4.4%
CHART 8CREAL GROSS PRODUCT -- LEISURE & HOSPITALITY
WEST NORTH CENTRAL REGION MAKEUP BY STATE, 2013Q2
Source: IHS Global Insight
24 IHS / AAA 2013 Memorial Day Forecast
Travel by Region: West South Central The Memorial Day holiday travel forecast calls for a 0.9 percent increase in total person-trips originating from the West
South Central (WSC) region, relative to last year. Air travel is expected to fall by 4.3 percent while automobile travel is
expected to rise 2.2 percent from Memorial Day 2012. About 10.3 percent of the WSC population is predicted to travel this
Memorial Day period, which is slightly less than the estimated national frequency of 11 percent.
TABLE 9A
2013 MEMORIAL DAY TRAVEL FORECAST – WEST SOUTH CENTRAL REGION AND UNITED STATES
The unemployment rate in the WSC region has been dropping over the past year, and is expected to reach 6.1 percent in
the second quarter of 2013. The WSC maintains the second-lowest unemployment rate among the nine census regions,
and is forecast to fall 0.7 percent compared to this time last year. In 2013, the WSC economy will continue to gather
momentum and remain one of the fastest growing regions in the country. However, Texas and Arkansas are expected to
see decreases in the labor force participation rate, which illustrates a particular weakness in the national recovery. As of
March 2013, the US labor force participation rate, or the ratio between the labor force and the overall size of the working-
age population, was at its lowest level since May 1979 (63.3 percent). Demographics (an aging population) are partially
pushing the participation rate lower, but the absence of a cyclical revival to draw potential workers back into the labor
force is a sign of weakness in labor markets across the country.
Real gross state product growth in the WSC region is expected to exceed national output growth compared to the second
quarter of last year (2.1 percent versus 1.9 percent). The expected 1.9 percent annual increase in real disposable
personal income is a modest
improvement, as the anticipated loss
of about one percent of disposable
income due to the ending of the payroll
tax cut is restricting growth in regional
incomes. Households still face too
many negatives to allow a robust
spending recovery, including high debt
burdens, low (though now rising)
house prices and modest employment
growth. However, a lower personal
saving rate, as a percentage of
disposable income, will help to sustain
consumer spending this Memorial
Day.
Memorial Day Travel
YOY %
Change Level
% of
Population
YOY %
Change Level
% of
Population
Total (millions of person trips) 0.9% 3.91 10.3% -0.9% 34.82 11.0%
Automobile (millions of person trips) 2.2% 3.48 9.2% 0.2% 31.15 9.8%
Air (millions of person trips) -4.3% 0.28 0.7% -8.2% 2.32 0.7%
Economy (2013Q2)
YOY %
Change Level
YOY %
Change Level
Unemployment Rate (YOY Change) -0.7% 6.1% -0.4% 7.7%
Real Gross Product ($, bn)* 2.1% 1,647 1.9% 13,807
Median Price, New Single Family Home ($, thn) 5.2% 190 1.1% 239
West South Central United States
-0.7%
2.1%
5.2%
1.9%
-0.4%
1.9%
1.1% 1.2%
-2%
0%
2%
4%
6%
Unemployment Rate
Real Gross State Product
Median Price New Single Family
Home
Real Disposable Personal Income
Chart 9A
YOY Growth, 2012Q2 to 2013Q2
West South Central and United States
WSC Total US
Source: IHS Global Insight
25 IHS / AAA 2013 Memorial Day Forecast
The WSC housing market is beginning to turn around, as the median price of new single-family homes is projected to rise
5.2 percent from the second quarter of 2012. Of the four contributing states, Oklahoma is expected to see the largest
increase in second-quarter prices (six percent), followed by Louisiana (5.8 percent), Texas (5.3 percent), and Arkansas
(1.4 percent). Housing starts and sales of existing homes are also above year-ago levels in each of the WSC states.
Homebuilders continue to break ground on more homes as household formation rates begin to pick up, while some of the
excess existing supply is being gobbled up by investors and conventional homebuyers. Low interest rates will keep
housing very affordable by historical standards, which should continue to boost home sales and new construction.
The price of gasoline is expected to have little
effect on holiday travel from the WSC region
this Memorial Day. April gas prices are down
from a year ago. Any price increase that
comes shortly before the holiday is unlikely to
impact travel decisions, though it may compel
travelers to reallocate their travel budgets to
account for higher fuel prices.
In addition to the originating travel forecast of
person-trips from the West South Central
region, the following information provides a
look into the state of the local tourism industry
in the region. In general, because the majority
of travel occurs by automobile and remains
within regional borders, regional travel ties
closely with the output generated by that
region's leisure and hospitality industry.
The WSC recovery in real gross state product
from the leisure and hospitality industry (the
value of goods and services produced by the
leisure and hospitality industry) commenced in
the third quarter of 2010. In the second quarter
of 2013, the WSC region is expected to witness
annual tourism output growth of 0.6 percent,
lower than the projected one percent growth for
the national tourism industry.
Texas accounts for nearly three-quarters of
tourism output in the West South Central
region. Arkansas accounts for the smallest
share, with just five percent of the regional
total.
0%
2%
4%
6%
8%
10%
2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2
CHART 9BREAL GROSS PRODUCT -- LEISURE & HOSPITALITY
YOY % CHANGE
WSC Total USSource: IHS Global Insight
AR, 5.0%
LA, 15.2%
OK, 7.8%
TX, 72.1%
CHART 9DREAL GROSS PRODUCT -- LEISURE & HOSPITALITY
WEST SOUTH CENTRAL REGION MAKEUP BY STATE, 2013Q2
Source: IHS Global Insight
26 IHS / AAA 2013 Memorial Day Forecast
Memorial Day 2013 Holiday Traveler Profile Survey Methodology The Holiday Traveler Profile study, conducted by D.K. Shifflet and Associates, surveys holiday travelers regarding their
planned holiday travel including planned party composition, travel distances, trip expenditures, and activity participation.
For the Memorial Day 2013 holiday, the survey was in the field during April 8–12, 2013, and 306 respondents were
interviewed in detail about their holiday plans. This panel was designed to yield survey responses that are statistically
significant at the national level.1 Although we report detail for individual census regions, the reader should be aware that
the census region-level results are not generally statistically significant and margins of error are generally large.
Those census region-level responses that do differ significantly from national responses are flagged with asterisks, as in
the example below from our Memorial Day 2010 report:
Party Composition Memorial Day 2010 (example)
* Indicates estimate differs from estimate for Total US with 99 percent confidence or greater.
Source: D.K. Shifflet & Associates, Ltd.
Numbers may not add due to rounding.
Note that the percent of West North Central respondents planning to travel as a party of "One Adult" is listed as "6
percent*." As the footnote below the table states, the asterisk indicates that the West North Central estimate differs from
the Total US estimate with 99 percent confidence or greater. In other words, if the actual proportion of West North Central
residents traveling as a party of one adult were the same as the actual proportion of US residents traveling as a single
adult, there would be a one percent or lower chance of seeing a difference as large as the difference observed in this
survey (6 percent for West North Central versus 21 percent for Total US). Therefore, it is unlikely—though not
impossible—that this difference is reflective of random sampling error.
Although we will focus primarily on national responses, our commentary on the Holiday Traveler Profile tables may call
out certain regional responses of interest. When we discuss a regional response, we will generally avoid highlighting
responses with large margins of error. For example, the margin of error for the share of West North Central residents
travelling in parties with one adult is +/-14 percent, meaning that the share could be as high as 20 percent. As such, we
would either avoid highlighting that result or provide the margin of error to the reader for appropriate statistical context.2
1 Specifically, the margin of error for each binary response question is, at most, about 6 percentage points, with 99 percent confidence.
2 This +/-14 percent margin of error reflects a 99 percent confidence interval based on a t-distribution.
One Adult Two Adults
Three or
more Adults Families
Total US 21% 33% 19% 27%
New England 11% 10%* 26% 53%
Middle Atlantic 7% 19% 15% 60%*
South Atlantic 30% 33% 23% 14%
East North Central 39% 17% 23% 21%
East South Central 27% 23% 15% 35%
West North Central 6%* 17% 28% 49%
West South Central 16% 39% 20% 24%
Mountain 26% 52% 10% 13%
Pacific 13% 67%* 14% 6%*
27 IHS / AAA 2013 Memorial Day Forecast
Change in the Average Memorial Day Traveler Results from the survey of intended travelers reveal that the share of expected travelers in the under-$50,000 household
income bracket has risen from 26 percent last year to 28 percent this year, while the $50,000–100,000 household income
bracket has fallen two percentage points to 36 percent, with no share changes in the highest income bracket.
In 2013, the economy has begun on a strong note, with real GDP growth up to 3.8 percent in the first quarter, from just 0.4
percent in the fourth. Unfortunately, it is premature to conclude that the recovery has moved to a sustained stronger
growth track. Falling gasoline prices are particularly important to the households with lower incomes, which are expected
to increase travel. Similarly, the recent increases seen in the stock market have likely insulated those in the highest
income bracket from losing any share of travelers. The result of this is highlighted in the chart below, which shows the
change in income distribution of those intending to travel this holiday compared to last year.
CHART 10
HOUSEHOLD INCOME DISTRIBUTION OF INTENDING TRAVELERS
MEMORIAL DAY 2012 AND 2013 HOLIDAYS
TOTAL US
26%
38%36%
28%
36% 36%
0%
10%
20%
30%
40%
50%
Under $50k $50k - $100k Over $100k
2012 2013
28 IHS / AAA 2013 Memorial Day Forecast
“Going on a longer trip to
visit family/friends at the
Grand Canyon."
ENC Respondent
Travel Distances Travelers intend to journey an average of 690 miles round-trip this upcoming Memorial Day, which is higher than last year,
when travelers planned to log an average of 642 miles. While the increase is reflective of the overall improvement in the
economy’s fundamentals, the improvement is relatively weak. With GDP growth bouncing
up-and-down and job growth remaining slow, consumer spending growth remains modest.
Gasoline prices, however, are providing a well-deserved break for automobile travelers.
Compared to April 30th 2012, gasoline prices have fallen eight percent. Last year, the
shortest trips, those of less than 150 miles, made up 21 percent of total travel. This year,
these shortest trips make up only 13 percent of the total, consistent with the expectation
that lower gas prices have prompted travelers to plan longer automobile trips.
The distribution among mileage categories is fairly balanced, with every category receiving between a 13 and 20 percent
share of intended travelers. The average number of miles traveled tends to vary by region. The West South Central region
has the highest expected average mileage (829 miles), with 22 percent of travelers planning to go more than 1,500 miles
this Memorial Day. The Pacific region, which has the highest share of residents intending to travel by air, has the second
highest proportion of trips in excess of 1,500 miles (29 percent). Travelers in the Middle Atlantic region, on the other hand,
plan to stay relatively close to home and travel an average of just 396 miles round-trip during the holiday.
TABLE 11
EXPECTED ROUND-TRIP DISTANCE TRAVELED
MEMORIAL DAY 2013 HOLIDAY
TOTAL US AND BY REGION OF RESIDENCE
Measures of statistical confidence are not available for differences between regional and Total US average miles traveled.
Source: D.K. Shifflet & Associates, Ltd.
Numbers may not sum due to rounding
50-150
miles
151-250
miles
251-400
miles
401-700
miles
701-
1500
miles
Over
1500
miles
Average
Miles
Total US 13% 19% 17% 16% 20% 16% 690
New England 19% 21% 11% 14% 3%* 33% 579
Middle Atlantic 26% 32% 4%* 16% 9% 13% 396
South Atlantic 8% 25% 17% 20% 16% 13% 737
East North Central 9% 19% 35% 12% 13% 11% 619
East South Central 21% 10% 13% 7% 39% 10% 732
West North Central 9% 13% 15% 26% 25% 13% 679
West South Central 15% 23% 12% 20% 8%* 22% 829
Mountain 11% 9% 16% 11% 50%* 4%* 803
Pacific 12% 12% 17% 11% 18% 29% 730
(Percentage of Travelers)
29 IHS / AAA 2013 Memorial Day Forecast
“Last year, holiday spending
included airfare and hotel
accommodations and my 2013
Memorial Day holidays plans do
not include those costs.”
Pacific Respondent
Total Spending The median Holiday Traveler Profile respondent expects to spend $659 this upcoming holiday period—more than 6
percent less than the $702 expected spending of intending travelers in 2012.
Total spending can be roughly grouped into the following categories:
transportation spending, and spending occurring at the travel destination
including lodging, food and beverages, shopping, and entertainment.
Transportation spending accounts for roughly 28 cents of the traveler dollar,
which is almost five cents higher than last year. Gas prices are roughly 10
percent lower than they were at this time last year, but a shift from shorter- to
medium- and longer-distance trips is likely behind the net increase in
transportation spending. Further reductions in “Other Transportation” spending
are likely driven by the expected decline in travel via the non-automotive modes. All other categories make up the
remaining 72 cents of the holiday dollar, and the decrease in share is spread fairly evenly across those categories.
TABLE 12
MEDIAN EXPECTED TOTAL TRIP SPENDING AND AVERAGE EXPECTED SHARES OF BUDGET BY CATEGORY
MEMORIAL DAY 2013 HOLIDAY
TOTAL US AND BY REGION OF RESIDENCE
Source: D.K. Shifflet & Associates, Ltd.
Numbers may not add due to rounding.
Total
US
New
England
Middle
Atlantic
East
North
Central
West
North
Central
South
Atlantic
East
South
Central
West
South
Central Mountain Pacific
Median Total Expenditures $659 $675 $629 $569 $593 $867 $891 $567 $730 $980
Fuel Transportation 16% 13% 12% 17% 15% 16% 11% 12% 20% 21%
Other Transportation
Spending 12% 13% 23% 6% 11% 13% 10% 10% 7% 13%
Accommodations 20% 23% 19% 19% 17% 27% 22% 19% 14% 17%
Food & Beverages 22% 22% 23% 30% 21% 16% 19% 20% 30% 17%
Shopping 14% 12% 12% 13% 18% 14% 15% 16% 10% 14%
Entertainment/Recreation 13% 15% 9% 12% 11% 12% 16% 18% 13% 12%Other 4% 3% 2% 2% 7% 2% 6% 5% 5% 6%
30 IHS / AAA 2013 Memorial Day Forecast
Chart 12 illustrates the average expected shares of budget by category for 2013. Chart 13 shows the change in expected
budget distribution from Memorial Day 2012 to Memorial Day 2013.
CHART 11
US MEMORIAL DAY 2013 HOLIDAY SPENDING
DISTRIBUTION BY CATEGORY
Source: D.K. Shifflet & Associates, Ltd.
CHART 12
TOTAL US MEMORIAL DAY HOLIDAY SPENDING
CHANGE IN BUDGET SHARE FROM 2012 TO 2013
Source: D.K. Shifflet & Associates, Ltd.
Fuel
16%
Other
Transp.
12%
Lodging
20%
Food &
Bev.
22%
Shopping
14%
Ent/Rec
13% Other
4%
4.2%
0.6%
-0.4%-1.0%
-0.6%
-1.5% -1.3%-2%
0%
2%
4%
6%
Fuel Other Transp.
Lodging Food & Bev.
Shopping Ent/Rec Other
31 IHS / AAA 2013 Memorial Day Forecast
Party Composition For Memorial Day 2013, the most common expected travel party (37 percent) is a party composed of two adults. About 28
percent expect to travel with their family while 18 percent intend to travel with 3 or more adults. The main variance here
from 2012 is that the “One Adult” segment has jumped from 13 percent in 2012 to 17 percent in 2013, with the difference
coming from declines in expected travel by families and groups of three or more adults.
.
TABLE 13
PARTY COMPOSITION
MEMORIAL DAY 2013 HOLIDAY
TOTAL US AND BY REGION OF RESIDENCE
* Indicates estimate differs from estimate for Total US with 99 percent confidence or greater.
Source: D.K. Shifflet & Associates, Ltd.
Numbers may not add due to rounding.
One
Adult
Two
Adults
Three or
more
Adults Families
Total US 17% 37% 18% 28%
New England 6%* 26% 44% 25%
Middle Atlantic 18% 36% 17% 28%
South Atlantic 20% 29% 16% 35%
East North Central 4% 44% 23% 29%
East South Central 8% 23% 17% 52%*
West North Central 14% 40% 18% 28%
West South Central 11% 46% 20% 24%
Mountain 33% 28% 10% 29%
Pacific 27% 43% 13% 17%
32 IHS / AAA 2013 Memorial Day Forecast
“Last year I was on a multi-state
vacation on the West Coast and the
Rockies, this year we are going to
my girlfriends family's camp.”
New England Respondent
Activities The Memorial Day holiday serves as the kick-off for the summer travel
season, standing as a symbolic end to the winter and spring and a reminder
that summer is almost here. As a result, the expected activities during the
holiday are predominantly focused around visiting with friends and family,
and dining. These are the only two activities in which more than half of
intending travelers surveyed plan to partake.. Other top choices include
such outdoor activities as going to the beach (32 percent), touring and
sightseeing (27 percent), and hiking, biking, and related pursuits (22 percent).
TABLE 14
MAIN PURPOSE OF TRIP
MEMORIAL DAY 2013 HOLIDAY
TOTAL US AND BY REGION OF RESIDENCE
Source: D.K. Shifflet & Associates, Ltd.
Numbers may not add due to rounding.
Total
US
New
England
Middle
Atlantic
East
North
Central
West
North
Central
South
Atlantic
East
South
Central
West
South
Central
Mountain Pacific
Visit with friends/relatives 59% 57% 64% 55% 72% 64% 60% 54% 52% 58% Dining 55% 34%* 56% 49% 64% 63% 71% 52% 68% 43% Shopping 44% 37% 34% 41% 61% 45% 58% 49% 44% 40% Go to beach/waterfront 32% 38% 44% 26% 32% 33% 48% 25% 28% 28% Touring/sightseeing 27% 23% 14% 22% 36% 21% 48%* 32% 26% 36% Hike, bike, etc. 22% 27% 9% 25% 14% 17% 24% 20% 34% 24% Night Life 18% 22% 26% 9% 5% 10% 31% 12% 19% 34% Visit national or state parks 18% 16% 2% 27% 17% 17% 9% 13% 28% 21% Visit historic sites 16% 14% 8% 9% 25% 24% 13% 25% 7% 17% Hunt, fish, etc. 15% 13% 8% 29% 22% 8% 6% 9% 15% 18% Attend festivals, craft fairs, etc. 14% 18% 10% 19% 9% 5% 13% 10% 33% 12% Visit museums, art exhibits, etc. 13% 13% 0% 7% 18% 20% 15% 17% 8% 17% Attend concerts, plays, dance, etc. 11% 6% 14% 18% 3% 23% 14% 12% 3% 1% Gambling 11% 17% 9% 16% 8% 0% 8% 13% 19% 13% Boat/sail 11% 13% 10% 20% 22% 7% 12% 6% 7% 5% Visit theme/amusement parks 9% 1% 6% 2% 13% 19% 12% 3% 14% 5%
Observe & conserve nature/culture -
Eco-Travel8% 14% 0% 8% 9% 3% 8% 11% 12% 12%
Other 8% 3% 9% 8% 19% 4% 9% 9% 9% 2% Watch sporting events 6% 8% 14% 9% 8% 0% 4% 5% 3% 8% Play golf 6% 1% 8% 6% 8% 4% 5% 3% 5% 9% Spa 5% 1% 0% 3% 2% 3% 4% 5% 3% 18% Look at real estate 4% 1% 7% 1% 3% 4% 1% 6% 9% 3% Compete in sporting events 3% 4% 0% 2% 2% 5% 0% 2% 6% 0% Attend show: boat, car, home, etc. 1% 0% 0% 4% 2% 0% 0% 2% 2% 1% Snow ski, snow board,
other snow/ice sports 0% 0% 0% 0% 0% 2% 0% 0% 0% 0%
33 IHS / AAA 2013 Memorial Day Forecast
Expected spending for Memorial Day 2013 is in line with last year’s results, and aside from transportation spending, there
were no major shifts in the distribution among spending categories. As such, it is not surprising that the mix of expected
activities does not show a dramatic change from last year. However, one change of note is the increase in expected
travelers who intend to dine out and shop. While these two activities maintain their second- and third-place rankings from
last year, the proportion of travelers who include shopping and dining as primary activities in their travel plans has
increased by 2 and 5 percentage points, respectively.
TABLE 15
VARIANCE IN EXPECTED PRIMARY ACTIVITIES
MEMORIAL DAY 2012 HOLIDAY COMPARED TO MEMORIAL DAY 2013 HOLIDAY
Expected Primary Activities 2013 2012 Variance
Visit with friends/relatives 59% 59% 0% Dining 55% 53% 2% Shopping 44% 39% 5% Go to beach/waterfront 32% 36% -4% Touring/sightseeing 27% 32% -5% Hike, bike, etc. 22% 18% 4% Night Life 18% 26% -8% Visit national or state parks 18% 20% -2% Visit historic sites 16% 20% -4% Hunt, fish, etc. 15% 11% 4% Attend festivals, craft fairs, etc. 14% 18% -4% Visit museums, art exhibits, etc. 13% 20% -7% Attend concerts, plays, dance, etc. 11% 11% 0% Gambling 11% 11% 0% Boat/sail 11% 13% -2% Visit theme/amusement parks 9% 10% -1%
Observe & conserve nature/culture -
Eco-Travel8% 8% 0%
Other 8% 7% 1% Watch sporting events 6% 13% -7% Play golf 6% 10% -4% Spa 5% 10% -5% Look at real estate 4% 2% 2% Compete in sporting events 3% 1% 2% Attend show: boat, car, home, etc. 1% 1% 0% Snow ski, snow board,
other snow/ice sports 0% 0% 0%
34 IHS / AAA 2013 Memorial Day Forecast
The Impact of Fuel Prices on Travel Plans After fluctuating significantly since last Memorial Day, gas prices have been trending downward in recent weeks. At the
end of April, the national average price for a gallon of regular unleaded gasoline was $3.51. Over the last three years, the
price has dropped by an average of 14 cents in the six weeks leading up to the holiday, making it likely that holiday prices
will remain lower this year than last. High gas prices can have numerous effects on the economy, including cutting into
disposable income and, therefore, consumer spending. At current levels, however, gas prices are unlikely to have a
significant effect on Memorial Day travel.
If prices do rise in the weeks leading up to Memorial Day, the late climb in gas prices is unlikely to be a major factor in
go/no-go decisions for the majority of Americans who are interested in traveling. Within the Holiday Traveler Profile
survey, respondents were asked about the impact of fuel prices on travel plans. Given current pump prices, the
expectation was that fuel prices will not impact travel plans for the majority of households, and the survey clearly supports
this assumption. Of the intending travelers surveyed, 62 percent expect that high gasoline prices will have no impact on
their travel plans; last year, the figure was 53 percent. Of the 38 percent who do expect it to impact their travel plans, 27
percent plan to economize in other areas. The remaining travelers are divided between changing their travel mode (three
percent) and taking a shorter trip (8 percent).
CHART 13
TOTAL US MEMORIAL DAY HOLIDAY
IMPACT OF HIGH FUEL PRICES
At this time, many decisions on travel have already been made, and the needed funds have been set aside. For the
majority who say that gas prices will not affect their travel plans, it is possible that their planning process has already
accounted for a potential price fluctuation. The share of expected spending on fuel costs has increased by more than four
percentage points relative to last year, as many travelers are foregoing air travel in favor of automobile trips or taking
longer distance road trips than they did last year. Many travelers may feel strongly that rising gas prices will not affect their
travel plans, and even for those who are affected, changes to travel plans are likely to be reallocations within already-
determined travel budgets.
Yes, new travel mode
3%Yes, shorter trip
8%
Yes, economize other areas
27%No impact
62%
Source: D.K. Shifflet & Associates, Ltd.
35 IHS / AAA 2013 Memorial Day Forecast
Addendum 1: US Economic Forecast Summary: Published 4/4/2013
Ups and downs continue The economy has begun 2013 on a strong note, with real GDP growth now expected to bounce up to 3.8% in the first
quarter, from just 0.4% in the fourth. Unfortunately, it is premature to conclude that the recovery has moved to a sustained
stronger growth track. A swing in inventory accumulation from a big drag in the fourth quarter to a big plus in the first
quarter accounts for most of the swing in GDP growth. In the second quarter, inventory accumulation will probably slow
and become a drag once again. In addition, the sequester will be taking effect, pulling down government spending. As a
result, we see no immediate end to the up-and-down pattern of GDP growth, and expect the second quarter to register a
meager 0.4% growth rate.
We now assume that the sequester will continue through the end of the third quarter—rather than through the end
of the second, as we assumed last month—and as a result have cut our third-quarter growth rate from 3.2% to 1.8%.
Growth then bounces back above 3% in the fourth quarter, after the assumed end to the sequester. Despite the longer
sequester, the stronger-than-expected start to the year still leaves the calendar-year 2013 growth rate higher than our
previous forecast. We now project 2013 GDP growth at 2.0%, compared with 1.8% in our March forecast. We have
shaved our projected 2014 growth rate from 2.9% to 2.8%.
The stream of upbeat news on the economy has been interrupted, at least temporarily, consistent with the view that
growth will slow in the second quarter. The two ISM indexes both showed slower growth in March than in February, and
the March employment report came in much weaker than expected, with only 88,000 jobs added, and the unemployment
rate dropping 0.1 percentage point to 7.6% only because the labor force plunged by 496,000. The housing market news
remains very encouraging, though, across all dimensions —home sales, housing starts, and house prices—and housing
should continue to make a strong contribution to growth. The housing recovery is the main reason that we expect growth
to improve to around 3%—not just for one quarter, but on a sustained basis—after the sequester's effects unwind.
The sequester has become entrenched, at least for the rest of the fiscal year. The continuing resolution to keep the
government funded through the end of the fiscal year passed with little fuss at the end of March, leaving the sequester in
place. There is general agreement that the sequester is a bad thing, but the crucial disagreement is whether extra
revenues should be part of any replacement deal—Democrats say yes, Republicans say no. If the sequester is to end
soon, it will require some evidence of severe public discomfort from its effects (not yet seen) to turn up the heat in
Washington and produce a compromise.
The next key deadline will probably not arrive until August, when the debt ceiling will once again become binding. The
new fiscal year will be approaching, as well. If a deal can be done, this would be the time, replacing the sequester's crude
spending cuts with better-targeted cuts spread over many years—including to entitlement programs—and with extra
revenues from limits on tax expenditures.
Our baseline forecast assumes that such a package is agreed in time to end the sequester at the beginning of the new
fiscal year in October. Under our assumptions, the sequester delivers $44 billion in actual spending cuts in fiscal 2013 and
$57 billion in calendar 2013, and cuts 0.4% off the calendar-year GDP growth rate for 2013.
The housing recovery continues to gather momentum. Household formation is reviving, and the recovery in demand is
spreading from rental units to the owner-occupied sector. For 2012 overall, housing starts rose 28%, albeit from a low
base (782,000 units, compared with 612,000 in 2011). We expect starts to improve another 24% in 2013, to 970,000, and
36 IHS / AAA 2013 Memorial Day Forecast
then by 30% in 2014, to 1.27 million. House prices are also reviving. We expect a 6.5% house-price increase in 2013 to
follow a 5.5% increase in 2012, as measured by the FHFA purchase-only index, fourth quarter to fourth quarter.
The housing recovery is supporting consumer spending (through its effect on wealth and on housing-related purchases),
and is probably one of the reasons why consumer spending growth is heading for 3.3% in the first quarter despite the
drag from the loss of the payroll tax cut. We doubt that this pace can be maintained, though, since it would be far ahead of
the 1.2% growth rate that we expect for real disposable incomes this year. Households still face too many negatives to
allow a robust consumer spending recovery—a loss of about 1% of disposable income due to the ending of the payroll tax
cut, high (though falling) debt burdens, low (though now rising) house prices, modest employment growth, and a lack of
confidence in the government's ability to make things better. Overall, we expect consumer spending to rise 2.2% in 2013,
slightly better than 2012 (1.9%), and to strengthen to 2.5% growth in 2014. Light-vehicle sales are the brightest spot, as
pent-up demand is coming through, and we have nudged higher our sales forecast for 2013 to 15.3 million (from 15.2
million), up from 14.4 million in 2012.
Capital equipment should remain an important driver of GDP growth. After a dip in mid-2012, capital goods orders have
revived strongly. Business equipment and software spending bounced up at an 11.8% pace in the fourth quarter (led
by aircraft). The fourth-quarter bounce may have been exaggerated by the anticipated expiry of bonus depreciation, and
we expect spending growth to slow to 4.3% in the first quarter, before accelerating again in the second quarter. On a
calendar-year basis, we expect spending growth of 6.5% in 2013, similar to the 6.9% growth rate in 2012.
On the business structures side, spending on buildings is improving, although at an uneven pace. We expect spending
to rise 3.2% in 2013, down from 10.7% growth in 2012. Oil and gas drilling activity surprisingly rose in the third and
fourth quarters, despite a retreat in natural gas drilling in the face of low prices. Overall drilling rose 5.7% in 2012, but we
expect only a 0.8% increase in 2013.
In the state and local government sector, the pace of budget tightening has eased slightly as revenues have begun to
improve, but municipalities remain under severe pressure, and the sequester will cut federal grants. We expect real state
and local government spending to decline 0.8% in calendar 2013, after dropping 1.4% in calendar 2012.
The federal budget deficit in fiscal 2012 narrowed to $1.1 trillion (7.0% of GDP), from $1.3 trillion in fiscal 2011 (8.7% of
GDP). Fiscal policy is tightening, as stimulus fades away and spending cuts and tax increases take effect. We expect the
deficit to decline further to $868 billion in fiscal 2013 (5.4% of GDP).
Slower growth around the world has created a headwind for US export growth. Exports fell sharply in the fourth quarter,
but we think that paints an unduly pessimistic picture. We expect modest export growth during 2013, at 2.6%, down
slightly from 3.4% in 2012. We expect the dollar to strengthen against the euro over the rest of 2013 as the Eurozone
recession lingers. We foresee a downward trend against emerging-market currencies, dictated by the pace at which China
allows the renminbi to appreciate. The overall current-account deficit should shrink to 2.7% of GDP in 2013, from 3.0%
in 2012, due to a smaller bill for imported oil.
Inflation remains a nonissue. We expect lower oil prices to pull headline CPI inflation down to 1.4% in 2013, from 2.1%
in 2012. Moreover, in the face of sluggish demand growth, we expect core inflation to continue to ease gradually through
mid-2013.
37 IHS / AAA 2013 Memorial Day Forecast
Addendum 2: US Regional Forecast Summary
Published 4/12/2013
A gradual but steady recovery
Last year the United States saw its third year of post recession payroll gains. According to the Bureau of Labor Statistics’ recently
revised payroll numbers, all but two states—Wyoming and Maine—gained jobs in 2012, although in most states year-over-year gains in
December amounted to less than 2%. North Dakota was the fastest growing state for the second year, with payrolls in December up
6.5% over the end of 2011. It was followed by Utah and Texas, the two only other states to see gains of more than 3%. By the end of
year, five more states—New York, Louisiana, Utah, South Dakota, and West Virginia—joined the four states that had already returned
to their prerecession employment levels in 2011: North Dakota, Alaska, the District of Columbia, and Texas.
Employment Growth, 2013–18 (Average annual growth rate)
In 2013, a number of headwinds will prevent growth from significantly exceeding that of 2012. On the domestic front, the main risk
comes from the sequester, which will not only bring significant cuts to government spending, but also has the potential of derailing
consumer and business confidence, especially if it lasts longer than anticipated. We currently expect that the sequester will remain in
effect at least until the end of the fiscal year in September, and that the Washington DC area will feel the greatest pinch, as its economy
is highly dependent on federal government spending.
On the external front, the main impediment to growth comes from the ongoing European recession and its dampening effect on US
exports. Export growth slowed considerably last year on the back of sluggish global growth, and in 2013 we do not expect the
international trade environment will see much improvement. The Northeast, which was the only region to see exports contract last year,
will struggle again in 2013 because of its outsized exposure to Europe.
It is not all bad news, however. Thanks to pent-up demand, improved affordability, and low interest rates, the housing sector has finally
embarked on a sustainable path towards recovery, and is spurring robust growth in the construction sector. The pace of recovery
across the regions varies significantly, however. Although real estate markets in the Northeast were not hit as hard as other markets by
the bursting of the housing bubble, the region’s recovery has been falling behind the rest of the nation. While the foreclosu re rate has
38 IHS / AAA 2013 Memorial Day Forecast
been falling in all other regions, in the Northeast it continues to rise and is now well above the national average. As a result, while many
markets, especially in the West and the South, began to see home price increases last year, prices in the Northeast continue to fall.
Although states in the West and South suffered the most during the crisis, they are also expected to experience the largest rebound.
Thanks in part to strong construction sector gains, we expect the Mountain and West South Central regions will be the top performers in
2013. However, the Mountain region fell the most during the recession, losing more than 8.5% of payrolls, so its strong growth rates will
be from a very low base. By the last quarter of 2013, payrolls in the Mountain region will still be off 2.9% from their prerecession peak.
On the other hand, the West South Central, which has benefited from the strength of its energy sector, surpassed its peak employment
level in early 2012. The Northeast, meanwhile, will be the weakest region, and the only one to see payrolls rise less than 1%.
Metropolitan area population growth in 2012
According to the US Census Bureau’s annual population release, 89 of the 100 largest metropolitan statistical areas experienced an
increase in population from July 2011 to July 2012. The majority of the high-growth metros are located in the South and West.
The revival of the energy sector played a significant role in metropolitan area growth over the past year. The booming oil and gas
industry in metros such as Houston, Midland, and Odessa in Texas and Fargo and Bismarck in North Dakota helped to develop a
robust, expanding economy, which in turn resulted in an influx of migrants seeking employment and other economic opportunities.
Indeed, the energy-rich Texas and North Dakota metros experienced some of the highest population growth rates in the country last
year. That these metros also have relatively low cost of living, an ample supply of land, and affordable housing prices provided a further
boost to their population gains.
39 IHS / AAA 2013 Memorial Day Forecast
Highest Population Growth Among 100 Largest Metros
Austin-Round Rock-San Marcos, TX 3.0
Charleston-North Charleston-Summerville, SC 2.3
Orlando-Kissimmee-Sanford, FL 2.2
Raleigh-Cary, NC 2.2
Cape Coral-Fort Myers, FL 2.2
Houston-Sugar Land-Baytown, TX 2.1
Dallas-Fort Worth-Arlington, TX 2.0
Charlotte-Gastonia-Rock Hill, NC-SC 2.0
San Antonio-New Braunfels, TX 1.9
Provo-Orem, UT 1.9
The slower-growing metros tended to be in the Northeast and eastern part of the Midwest, primarily Ohio. Relatively sluggish economic
growth and limited employment opportunities in these metros encouraged people to move out and seek their fortunes elsewhere.
State personal income growth in 2012
According to the latest figures published by the Bureau of Economic Analysis (BEA), state personal income accelerated significantly in
the last quarter of 2012, rising by an annualized 7.9% quarter on quarter (q/q), after expanding by a revised 2.3% in the third quarter.
Personal income rose in all states during the last three months of the year, with annualized growth rates ranging from 5.1% in West
Virginia to 20.7% in South Dakota. A number of special factors affected state personal income in the fourth quarter: accelerated
dividends and bonuses due to anticipated changes to federal tax laws; Hurricane Sandy, which temporarily disrupted production and
earnings in New York and New Jersey; and the ongoing drought in the Midwest.
Highest and Lowest Personal Income Growth Rates, 2012
Rank State Growth rate (Percent) Rank State Growth rate (Percent)
1 North Dakota 12.4 47 Nevada 2.4
2 Texas 4.8 48 Nebraska 2.3
3 Utah 4.7 49 Delaware 2.3
4 Washington 4.5 50 Connecticut 2.0
5 Montana 4.5 51 South Dakota -0.2
Despite the strong fourth quarter, state personal income growth slowed to 3.4% in 2012, down from 5.2% in 2011. While South Dakota
was the worst performer, North Dakota, with personal income growth of 12.4%, was the fastest growing state, far outpacing any other
state. North Dakota continues to benefit from booming exploration at the Bakken Shale, which has not only led to rapid earnings growth
in the mining sector, but has also spilled over to other sectors, such as construction, wholesale trade, and transportation.
We expect personal income to contract in the first quarter of 2013, as dividends fall from the inflated level of the last quarter of 2012.
Growth will then pick up, averaging 4.7% over the last three quarters of the year. All states are expected to see personal income gains
this year. Although North Dakota will continue to lead, the Sunbelt states will generally perform the best.
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