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The summer road trip will never die. Rising energy costs are, however, taking their toll on American road warriors, who still overwhelmingly prefer gas-guzzling sport-utility vehicles and pickup trucks to small, fuel-efficient sedans and hybrids. Memorial Day weekend travel, which is typically seen as an indicator for the rest of the summer driving season, won't take a drastic dive despite record gas prices -- up an average of 14% from last year, by the U.S. Energy Dept.'s reckoning. But the number of Americans traveling by car this weekend will only grow by a razor-thin margin.
According to American Automobile Assn. estimates, about 31.4 million Americans will get in their cars to go on vacation this weekend, up a very slight 0.7% from last year. Autos are still vastly preferred to air, train, and other forms of transportation, making up 88% all holiday travel. "High gas prices and increased vacation costs won't deter Americans from traveling," AAA Travel Vice-President Sandra Hughes said in a prepared statement. "Families will continue to take vacations and plan getaways."
The Travel Industry Assn. of America, which represents the $645 billion U.S. travel industry, released a survey last week that shows Americans are planning to economize in other areas to make up for increased travel costs. About 52% will try to save on food purchases, a potential boon for struggling fast-food chains, while 31% will head for less expensive destinations, and 22% will simply shorten their trips.
The TIA is also trying to help its many members brace for the sluggish season by releasing a list of strategies to attract summer voyagers with tight wallets. Sample promotions include: "A premium tank [of gas] for a premium location," being run by the vacation town Leavenworth in Washington, as well as another sponsored by Iowa's Office of Tourism, which is giving away $50 gas cards in a competition being held at welcome centers around the state.
In fact, the majority of the suggestions in the TIA's member guide are centered on promotional gas vouchers and rebates. "A little incentive goes a long way to ease the pain of high gas prices," says Allen Kay, a TIA spokesperson. "In this case, it helps consumers focus on what we really want to do, which is drive and vacation."
Auto makers, meanwhile, are banking on similar promotions to combat gas price fatigue and draw consumers into showrooms. At General Motors (GM), memories of last year's hugely popular employee-pricing incentive are still fresh. The promo turned out to be not so much a golden egg as much as the ultimate sour grape when an initial and drastic spike in sales gave way to one of the worst third quarters in auto history. GM's Vice-Chairman Robert Lutz described the move as "desperate men do[ing] desperate things" and vowed not to repeat the experience this year.
Instead, GM is rolling out a 45-day, trial gas-rebate promotion in California and Florida dubbed the GM Fuel Price Protection Program. As of last week, certain new GM customers will be guaranteed a gasoline rate of $1.99 for a year. In short, GM will pay the difference between that price and the average price of premium gas for an unlimited number of miles. The entire process is tracked by the onboard OnStar navigation system. (The eligible vehicles all feature OnStar standard, so there's no extra charge for the service.)
The program covers some of the heaviest and thirstiest cars on the market, such as the popular Hummer H2 and H3, Chevrolet Suburban, and GMC Yukon. GM hopes the measure will help consumers focus on some of the company's more fuel-efficient vehicles like the Buick Lucerne and the Chevrolet Impala, which are also eligible for the program. Of course, the move is designed to ease the financial burden of choosing a large SUV or truck. "We designed this program to take peoples' concerns about high fuel costs off the table," concedes Deborah Silverman, a GM spokeswoman.
BMW-owned MINI, whose Cooper models get SUV-shaming gas mileage between 26 and 36 miles per gallon, is embracing the time-honored road trip tradition with its first sponsored coast-to-coast rally. Unlike other summer promotions, MINI's campaign is centered on current owners, though the route does stick close to home. Over the course of the trip's more than 3,000 miles, drivers will be, on average, within striking distance of a MINI dealership about 75% of the time.
MINI's Communications Manager, Andrew Cutler, notes the idea for the trip emanated from the wildly faithful base, which was overwhelmingly willing to face high summer gas prices. "People are definitely looking for novel, fun ways to travel in the face of rising prices. We happen to think this is it," Cutler adds.
Indeed, because strategies for adapting to high costs vary so greatly, the best way to choose a vacation vehicle is by tailoring the choice to the type of vacation being taken. After all, incentives abound and appear to be defying high prices. With consumer tastes still cemented in the practical and fun, rather than the purely economical, BusinessWeek Online took a look at the best cars by type of summer vacation.
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