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As Memorial Day weekend approaches, millions of Americans are preparing for their holiday travels amid a significant rise in gas prices nationwide. The ongoing closure of the Strait of Hormuz, a vital oil shipping route disrupted by the conflict in Iran, has contributed to sustained high fuel demand just as the summer travel season kicks off.
AAA reports that approximately 45 million people plan to travel at least 50 miles from home between Thursday, May 21, and Monday, May 25, setting a new record for Memorial Day travel. Despite the surge in gas prices, about 87% of these travelers intend to drive to their destinations.
Gas prices for the holiday are at their highest level in four years, reaching averages not seen since the summer of 2022. As of Saturday, the national average price for regular unleaded gasoline stood around $4.53 per gallon.
States such as California, Washington, and Hawaii are experiencing even steeper prices, with rates above $5.60 per gallon. For comparison, the national average was $4.03 a month ago and $3.19 one year ago.
The increase in fuel costs is prompting some Americans to reconsider their travel plans. The nonprofit Institute on Taxation and Economic Policy (ITEP) estimates that the Iran conflict will cause U.S. drivers to spend an additional $3.5 billion on fuel over the Memorial Day weekend alone. On average, households face an extra $291 in fuel expenses this holiday, a figure expected to rise to $870 by the end of summer.
Financial concerns are widespread, with a recent CBS News/YouGov poll indicating that 59% of Americans find current prices to be a financial hardship. Many families still intend to take summer vacations but are adjusting their plans-opting for fewer trips, selecting destinations closer to home, or choosing more affordable lodging options, according to a Bank of America report.
The report also highlights a growing divide in travel behavior for 2024, with middle- and higher-income households maintaining their vacation spending, while lower-income families are more likely to forgo travel altogether. Nearly 40% of lower-income households reportedly have no summer travel plans this year.
With inflation continuing to rise-Consumer Price Index data shows a 0.6% increase from March to April and a 3.8% rise over the past year, the highest since 2023-American travelers are adjusting budgets and plans to ensure they can still enjoy a vacation despite the economic challenges.