NEW YORK — This summer, high rollers are flying to lavish hot spots for their vacations. The rest of us are driving to less luxurious places like nearby campgrounds.
The good news: At some U.S. campgrounds these days you get live bands, air guitar contests and chocolate pudding slip ’n’ slides.
Americans’ plans for summer travel mirror the current state of the economy. Rising home prices and a soaring stock market are encouraging those at the top of the income ladder to take more extravagant trips. But large segments of the population are staying close to home because wages are stagnant, rents are high and the end of the payroll tax holiday has shrunk their take-home pay.
For a travel industry still stinging from the Great Recession, that likely means another summer of steady, but slow, recovery.
Mike Klopp, a commercial insurance salesman in Irvine, Calif., is starting to feel better about the economy. He and his wife plan to take their three kids on a vacation up the coast to Monterey in August — a trip they skipped last year.
But Klopp said local trips are the limit because they’re cheaper. Like many others, he’s not yet willing to splurge on a dream vacation.
“The kids would love to go to Hawaii, but there’s no way I’m going to do that. We’ve been hunkering down, money is tight right now,” he says.
“I’m not sold that things are better,” he says.
Other Americans likely agree. Although the unemployment rate has dropped to 7.5 percent, compared with a post-recession high of 10 percent, the Federal Reserve doesn’t see it falling below 7.3 percent this year. And economic growth still isn’t as strong as it has been after previous recessions. The economy grew at a revised annual pace of 2.4 percent from January to March. Economists expect the rate to slow to 2 percent from April through June, partly because of the federal budget cuts that started taking effect March 1.
Those with higher incomes never stopped traveling, but thanks to new highs in the stock market they now feel secure enough to take longer vacations.
Patrick Veling, the owner of a California real estate data analysis and consulting business, says he’s taking his “most expensive vacation ever” this year. Instead of the normal one-week vacation, he and his wife Susan are taking their two adult kids on a three-week vacation through northern Europe that will include a 12-day cruise. “My confidence in the economy and my business is now strong enough that my wife and I have pretty much insisted we make this trip,” Veling said.