Summit County tourism gets boost from cheaper gas
Average gas prices in Summit County (year-end)
2014 – $2.83 (as of Dec. 19)
2013 – $3.60
2012 – $3.64
2011 – $3.59
2010 – $3.17
2009 – $2.87
2008 – $1.92
Source: AAA Colorado
The price of gas is falling and holiday travelers are elated.
Yesterday at the Silverthorne Sinclair station, home to the town’s cheapest unleaded gas at $2.57 per gallon, Colorado Springs resident Ted Alvers was filling up on his way home from a business meeting in Craig. His job requires constant travel across the state — he’d be paying at the pump no matter what the price — but thanks to the lowest gas prices since 2008, it’s a bit easier to hop from town to town.
“It’s pleasant, even though I still travel when it costs $4 a gallon,” Alvers said. “I just feel a bit better about having to pay less.”
Alvers was joined by dozens of fellow commuters at the station: a couple driving to Vail for the holidays, two Silverthorne residents topping off their snowmobiles, a family grabbing food and drinks before heading to their hotel in Keystone. The scene at the bustling station provided just a glimpse of the excitement across the state: Alvers shared a story about truck-stop gas stations “starting a little war” in Grand Junction by dropping prices to $1.99 per gallon.
And the cheap-gas trend shows no signs of fading soon. Over the past two months, gas prices across the nation have fallen dramatically. Early last week, the Department of Energy cut its 2015 national prediction for the average price of gas to $2.60 per gallon. The cut marks the lowest full-year prediction since 2009, and, if prices stay true, U.S. motorists could save up to $100 billion in consumption costs by this time next year, according to a report from The Associated Press.
In Summit County, gas prices this month are roughly 13 cents higher than the national average. Across the state, the Colorado AAA office reports, gas was typically cheaper than it was across the country, leveling out at $2.44 as of this month. It’s the lowest statewide average since prices hit $1.58 in 2008.
Gas in Summit also hit a seven-year low that year, just before the national recession put a damper on local tourism at large. Although the recent price drop was spurred by an influx of foreign oil since September — crude oil prices dropped from a June high of $115 per barrel to $66 per barrel this month, according to an Associated Press report — experts expect it to have a drastic, season-long effect on local tourism.
A report from the Colorado AAA office found that 1.6 million residents will travel farther than 50 miles between Dec. 23 and Jan. 4 — a record high since the office began tracking holiday travel in 2001. Patrick DeHaan, a senior petroleum analyst with GasBuddy.com, took the travel figures in stride.
“Given the gas prices, it was not much of a surprise to see more motorists hitting the road,” said DeHaan, whose website tracks gas prices and travel habits in the U.S. and Canada. “They’re traveling further and traveling more often, and that typically happens when people see exactly how much they can save.”
THE PERCEPTION EFFECT
Cheap gas seemingly signals a massive shift for travelers, but the actual savings are surprisingly slim.
Take the example of an all-American, four-person family driving from Kansas City, Missouri, to Keystone for a ski vacation: If gas runs $2.60 per gallon instead of $3.38, the 2013 average, the family saves $37 during the 1,400-mile round-trip at 30 miles per gallon (a kind fuel-economy estimate). That’s just $9.25 per person — not even enough for a burger on the mountain.
Ralf Garrison, director of the Denver-based resort analytics company DestiMetrics, breaks the numbers down in marketing terms. For tourism traffic, perception can far outweigh the reality, and destination guests are already willing to spend roughly 12 times more on vacation than day visitors.
“The perception of cheaper travel costs is more important right now than the reality,” Garrison said. “This is a principal of marketing: People make purchasing decisions based on their perception, not the reality, and when people see that prices are dropping rapidly that has a major effect.”
The concept isn’t limited to cheap gas. As of Nov. 30, Destimetrics reported, bookings at Western ski resorts this season were up 9.6 percent over last year, led by Rocky Mountain destinations like Breckenridge and Copper Mountain Resort. Revenue is up even higher, to 16 percent this year.
At this rate, Garrison predicts that bookings will be nearly 80 percent of the 2013-14 total by January.
For destination guests, Garrison says even small savings at the pump encourage spending elsewhere once they arrive in Summit County or elsewhere.
“If consumers are paying less for the gas they put in their cars and for gas utilities, they’ll have more discretionary dollars, and that’s what’s used for leisure travel,” Garrison said.
“This is like a free hall pass for the industry because those funds will be available for all consumers, the ones who are affluent and the ones who aren’t.”
But not all gas is the same. The cost of oil for airlines is an unpredictable factor. Garrison says most airlines buy oil futures, locking in rates up to two or three years in advance. At the moment, travelers who fly for vacation are still paying the inflated costs. Diesel fuel is yet another unknown, thanks in large part to high winter-time costs for the agricultural industry. The price of diesel at Sinclair was 79 cents higher than unleaded.
Still, Garrison believes this season marks a boost in ski traffic across the state and nation, led in large part by economic certainty — not just cheap gas.
“At the end of the day, Americans consider vacations their birthrights,” Garrison said. “Everyone wants to go, but they just need to justify that in their mind’s eye. Right now, all the stars are lined up in favor of a very aggressive year, and gas pricing is one of those stars.”
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