Americans’ domestic and international trips likely won’t be massively curtailed by higher gasoline prices this summer, analysts have said. Though some would-be tourists may make some subtle changes in how they travel.
The war with Iran, initiated by President Donald Trump on Feb. 28 in tandem with Israel, has had wide-reaching effects beyond just the Persian Gulf conflict itself. One of the most noticeable side effects from the war has been an enormous spike in energy prices — a barrel of oil has shot up above $100, and gas prices have risen to uncomfortable levels.
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In January, before the war, average gas prices in the U.S. reached as low as $2.78 per gallon, according to the U.S. Energy Information Administration. As of early May, they have punched up to $4.45 per gallon, a 60% increase. That means it’s more expensive not only to fuel up a car for a road trip, but also to buy a flight ticket, as airlines pass along higher fuel costs.
Still, even if gas prices remain high this summer, industry experts who spoke with the Washington Examiner didn’t seem to think that summer travel would take a big hit, which could be good news politically for Trump and congressional Republicans, with the Nov. 3 midterm elections looking ominous a bit under six months out.
“When you look at the total basket of costs for summer travel — lodging, food, entertainment, and then also getting there — getting there is not the biggest percentage of the cost, and then fuel is only a part of that,” said Peter Hansen, director of research and policy analysis at the National Federation of Independent Business.
The hotel industry is also not too worried. A spokesperson for the American Hotel and Lodging Association pointed out that while higher gas prices will create headwinds that could alter plans, there is still strong travel demand.
“Rising fuel costs can create real pressures for travelers as we head into the busy summer season,” the spokesperson told the Washington Examiner. “As Memorial Day approaches, some travelers may be taking a closer look at their plans, but we know the desire to travel remains strong. America’s hotels are prepared and eager to welcome guests.”
Some of the gas price increases have been seasonal, but the Iran war is still driving the biggest share of the price growth.
Patrick De Haan, head of petroleum analysis at GasBuddy, estimates that the war is accounting for about 80% of the increase. He said the higher prices will be a “big toll” on the economy heading into the summer.
De Haan said there are still a lot of uncertainties leading up to the summer. For instance, prices could change if a strong deal is made and the Strait of Hormuz reopens. But for the time being, De Haan said there hasn’t been too much demand destruction despite the increased gas prices.
“Once you get towards Memorial Day through Labor Day, it’s hard to know if these prices will stick for another few weeks and how detrimental that would be to demand in the U.S. economy,” De Haan told the Washington Examiner. “For now, I think it’s maybe a slight impact or modest at most.”
“But if the situation worsens, I mean more of an impact, obviously,” he continued, “and if the strait reopens, then gas prices may start to come down in fairly short order.”
Some travelers might not cancel their summer travel plans, but simply change them a bit. Perhaps, instead of taking that long cross-country road trip, they might take a shorter one to a destination that is closer by.
Say a family was planning to drive a Chevrolet Suburban from Richmond, Virginia, to Yellowstone National Park. As of this week, it would cost nearly $820 in gas for a round-trip, according to a calculator from AAA.
But if that same family decided to take a road trip down the Eastern coast and visit Savannah, Georgia, the cost would only be $176 in gas for a round-trip. That $644 in savings could be used to stay at nicer hotels or splurge on more activities.
“Maybe a staycation or more of a regional road trip, or even a domestic flight, which could be a lot cheaper than an international flight,” Ted Rossman, senior industry analyst at Bankrate, told the Washington Examiner.
And in some regional parts of the country, higher gas and airfare prices could actually be a boon for summer tourism.
Dan Kelleher is the CEO of the Regional Office of Sustainable Tourism, a not-for-profit corporation that works to market and boost tourism in certain counties within New York’s Adirondacks region.
The Adirondack Mountains are a popular summer destination for travelers in New York City and along the eastern seaboard because of the shorter drive. Kelleher told the Washington Examiner that the region is a “pretty resilient” destination in that it’s within a multi-hour drive of about 25% of the U.S. population.
“So when people aren’t flying, we can actually do quite well,” Kelleher said. “So, we actually expect to see, potentially, a little bit of an uptick — particularly at the higher-middle portion of the market.”
Kelleher even predicted that, at this point, 2026 will prove to be a little better tourism season for the region than last year, even with the increased price pressures.
Still, despite expectations of resilient demand this travel season, consumers overall report extreme dissatisfaction with the economy. Consumer sentiment fell to a record low in April, dropping below levels seen during the worst of the Great Recession and during the country’s COVID-19 lockdown.
De Haan pointed out that some airlines might try to cut costs in other ways to offset passing along higher ticket prices to customers.
For instance, Delta Air Lines just announced it is cutting snack and drink services for most passengers on flights that are shorter than 350 miles. Still, the airline claims that the move isn’t tied to the higher fuel prices.
One piece of advice that De Haan has for travelers, given the uncertainty of gas prices down the line, is to buy a potentially refundable fare. If the cost does go down, one could refund it to a trip credit and use that credit to rebook at a lower rate and still have a balance left over.
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But overall, the general sense is that this summer travel season will still be a good one for businesses across the country, despite the soaring fuel costs.
“I tend to actually be relatively upbeat about the summer travel landscape in the face of these challenges, just because we’ve seen record after record in recent years, and it seems like there is maybe still some room for that to run,” Rossman said.
Zach Halaschak (@zhalaschak) is the economics reporter for the Washington Examiner.
