March 27, 2012
Today the House Natural Resources Committee held an oversight hearing
to examine the impact high gasoline prices have on job creation and economic growth in America’s tourism and travel industry, which last year supported 14 million U.S. jobs.
“According to the Wall St Journal, every dollar increase in gas prices means $2.6 billion a week must be diverted toward the gas pump and away from other spending. This decrease in consumer spending has significant impacts throughout our economy. With many families already running on tight budgets, the extra money spent on gasoline is more than enough to force families to forgo summer vacations, spring break trips or other travel plans,” said Natural Resources Committee Chairman Doc Hastings (WA-04). “Beach towns, mountain gateway communities and various other tourist destinations rely heavily on spring and summer travelers for the majority of their yearly income. High gasoline prices can have a crippling effect on the travel and tourism industry as business costs increase and revenue decreases from the lack of tourists and visitors that can afford to make the trip.”
At the hearing, witnesses representing the travel industry recognized that as spring and summer travel season starts, many American families are already changing their travel plans and cutting back vacation and tourism.
Sam Gilliland, Chairman and CEO of Sabre Holdings, who represents the world’s largest travel marketplace that connects more than 350,000 travel professionals provided the Committee insight on the direct economic impact to the travel industry. Gilliland said, “Overall, the U.S. travel and tourism industry generated $1.8 trillion in economic output last year…But make no mistake, the travel industry’s significant contributions to the U.S. economy can only be fully realized if travel remains affordable and within the budgets of families and businesses of all sizes and backgrounds.” According to Gilliland, some Americans are already changing their travel plans, “For Americans who plan to travel by car this summer, 54 percent said that an increase in the price of gasoline would affect their travel plans.”
Victor Parra, President and CEO of United Motorcoach, Association told Committee Members that he, “can think of few segments of the economy that are impacted as significantly by the availability and cost of fuel and the impact they have on economic growth and job creation.” Parra described the domino effect of rising gasoline prices that, “often requires the cancellation of many trips; causing a ripple effect of hotel restaurant and entertainment venue cancellations. Of course retail shopping, tourists’ favorite activity is adversely affected as well.”
Mark Brown, Executive Vice President of the American Automotive Association (AAA), testified that, “We know that consumers are feeling the pinch. As reflected in the recently reported February 6.7% decrease in gasoline demand in the US, people are making more thoughtful driving decisions to minimize the ‘pain at the pump.’” Brown referenced a recent survey that showed high gasoline prices are making the vast majority of Americans rethink their driving habits, “Our March 2012 survey found that 84 percent of respondents have already changed their driving habits or lifestyle in some way as a result of increased gas prices.”
Printable PDF of this document