PORTSMOUTH, Va. (WAVY) — Rising rates of inflation, prices at the grocery store, and decreasing 401ks have many finding extra ways to save some cash, but economists say most people are still going on summer vacations.
Many people share a grim outlook on the economy, but Old Dominion University Economics Professor Robert McNab says one bright spot remains in the Hampton Roads economy.
“The tourism industry is a bright spot,” said McNab.
It’s a bright spot that’s shining as many people continue to hit the roads for vacation. Ryan Adcock with AAA of Tidewater says they haven’t seen a major drop-off in people on the road.
“People are itching, really itching to get back out there and travel this summer. So we’ll definitely see that demand for gas stay where it’s at,” said Adcock.
That desire is shared by many as local hotels are on track to break records as people favor local travel destinations over far-off ones.
“Hotels are on track to outperform 2021 and 2021 was a record year. So even though gas prices are biting consumers at the pump, we haven’t seen traffic take a downturn yet,” said McNab.
Gas prices aren’t stopping summer vacations, they’re making people choose a different destination.
“People are shifting their travel plans from driving across the nation, flying to Hawaii, to saying, ‘That’s a little expensive. I better stay here in Virginia. Let’s go to the beach instead,’” said McNab.
Adcock says with gas prices so high, it’s important to remember good driving habits that help save some gas.
“No excessive idling on the road, excessive accelerating and braking, can also contribute to how many miles you get per gallon,” said Adcock.
McNab says even with a strong local tourism industry, high prices everywhere have people feeling uneasy at home and overseas.
“So this is a global phenomenon. So this kind of renders us powerless. We kind of feel like we’re on this ship and we really don’t know who’s steering it,” he said.
McNab says it’s important to keep in mind that the economy is at a “don’t panic” phase, even as global markets try to combat inflation.
“Supply chain problems, Russia’s invasion of Ukraine have led to a global price shock. This is just not in the United States and in fact, inflation for the United States is in the middle of the pack when we compare it to Europe and Asia. In other words, it’s higher elsewhere,” said McNab.
Also unknown, how long the economy will be on rough seas.
“The underlying fundamentals of the US economy are good, but there is sand in the gears. Supply chain shocks, oil price shocks, inflationary expectations. It’s just going to take a while to work this through,” said McNab.
As far as summer travel goes, AAA of Tidewater says they’re waiting to see their Fourth of July travel forecasts to see what lies ahead for the rest of the summer.