U.S. Travel Plans Hit The Skids

Oil Prices Top $135; Survey Shows Most Americans Altering Or Canceling Summer Trips

(CBS/AP)  Oil prices rose above $135 a barrel for the first time Thursday, with supply worries, global demand and an ever weakening U.S. dollar driving crude futures up.

As the cost of oil continues its surge, it is almost certain to dampen travel plans for millions of Americans heading into the Memorial Day holiday weekend and the upcoming summer months.

A new Rand McNally survey says two-thirds of Americans planning road trips this summer are either altering their plans to shorten their trips or canceling altogether. AAA predicted the number of Americans planning to drive more than 50 miles over Memorial Day weekend is down by 1 percent. Air travel will decline slightly as well, AAA said.

"We're really in kind of tenuous territory," said Suzanne Cook, research vice president at the Travel Industry Association.

The survey comes as American Airlines announced it will start charging $15 for the first checked bag, cut domestic flights and lay off possibly thousands of workers.

The airline plans to cut domestic flight capacity by 11 percent to 12 percent in the fourth quarter, after the peak summer season is over. That is more than double American's previous plans to cut flying by 4.6 percent in late 2008.

"I do think it's a bubble, but i don't think we'll go back to the numbers between $20 and $60 that we saw before," oil and gas analyst Tom Kloza told CBS' The Early Show Thursday of the rising oil prices. He added: "I don't think it will burst. It will come off substantially."

In the casino capital of Las Vegas, things already are tough.

Room occupancy rates have fallen slightly, forcing casinos to lower hotel room prices. Gambling giant MGM Mirage Inc. and local casino operator Station Casinos have cut their work forces. Las Vegas Sands, which opened a massive new casino on the Strip in January, unexpectedly swung to a loss of $11.2 million in the first quarter of the year.

Analysts expect the slowdown to be most dramatic at mid-market Las Vegas resorts that rely on tourists driving in from southern California. Those tourists already began staying away in the early part of the year, before gas prices rose again.

U.S. travelers have no choice but to cut back.

Margaret Stone, from small-town Lucas, Ohio, is hosting two exchange students from Europe and recently brought the two teenage boys to see the monuments and museums on the National Mall in Washington.

But she may have to cancel a planned trip to North Carolina in September when her newest granddaughter is born. "I'm on a fixed income," Stone said. "It's not going to change. So I'm going to have to make some adjustments."

On the steps of the National Air and Space Museum in Washington, Lynn Johnson, of Greenville, South Carolina, said she was on a trip with her daughter's fifth-grade class. But she said the family might not be able to afford another long-distance trip. They might escape to the closest beach this summer instead.

With the summer months fast approaching, tourism officials are waving discounts, freebies and other marketing ploys to draw visitors who might be reluctant to open their purse strings, especially outside major cities.

In Rehoboth Beach, Delaware, innkeepers are advertising free gas cards with a reservation or an extra night for free, hoping to soothe tourists' concerns about gas prices.


Just south of Washington, George Washington's Mount Vernon estate in Virginia has created a discount promotion with the Corcoran Gallery of Art to tie in with the exhibit, "The American Evolution: A History Through Art." A ticket purchased at one attraction is worth a half-price discount at the other. In June, Mount Vernon will try giving away reproductions of George Washington's china to one visitor each day.

"We're interested to see if it might bring out people who just need that extra little push," said Emily Coleman Dibella, Mount Vernon's spokeswoman.

Tourism officials believe destinations in urban corridors may be most insulated from rising prices. Washington, for example, is ranked as one of the most expensive tourist destinations with an average price of $352 a day for a family of four, according to AAA figures. But local tourism officials say the city benefits from its proximity to cities within a day's driving range, and the influx of European tourists taking advantage of the dollar's weak value.

In New York City, some officials are even more optimistic, saying the U.S. economic downturn might even benefit city businesses. In the first three months of 2008, an estimated 9.5 million people visited New York City, up by 1 million from the same period a year earlier. Visitor spending rose by an estimated $700 million.

Faced with an expensive euro and tighter budgets, Americans who might usually choose a trip to Europe are more likely to take a shorter trip to New York, said George Fertitta, who heads the city's tourism office.

"A trip to New York versus a trip to London," he said, "dollar for dollar this is as good as it gets."

Meanwhile, the world's top energy watchdog is preparing a sharp downward revision of its oil-supply forecast, according to a report in The Wall Street Journal reported.

Light, sweet crude for July delivery rose as high as $135.09 before falling back slightly. By midday in Europe, the contract stood at $134.37 a barrel in electronic trade on the New York Mercantile Exchange, up $1.20 on Wednesday's close of $133.17.

That settlement price, up $4.19 on Tuesday's close, marked NYMEX crude's largest one-day price advance since March 26.

Meanwhile, July Brent crude on the ICE Futures exchange in London also reached a new record of $135.13 a barrel Thursday. By midday in Europe, it had retreated to $134.35, a gain of $1.65 on its Wednesday close.

"Simply put, this is a market you cannot afford to be short in," said U.S. analyst and trader Stephen Schork about Brent futures in his Schork Report.

With gas and oil prices setting new records nearly every day, analysts have begun to wonder what might stop prices from rising. There are technical signals in the futures market, including price differences between near-term and longer-term contracts, that crude may soon fall. But with demand for oil growing in the developing world, and little end in sight to supply problems in producing countries such as Nigeria, few analysts are willing to call an end to crude's rally.

"The sentiment in the market is very bullish at the moment," said David Moore, commodity strategist with the Commonwealth Bank of Australia in Sydney. "The U.S. dollar was weaker last night, and also the U.S. EIA report showed an unexpected decline in U.S. commercial crude oil inventories, so there's a combination of factors pushing the oil prices higher."

Crude prices breezed past $130 early Wednesday, then accelerated when the U.S. Energy Department's Energy Information Administration said U.S. crude inventories fell by more than 5 million barrels last week. Analysts had expected a modest increase.

Investment bank Goldman Sachs last week revised its oil price forecast for the second half of 2008 from $107 to $141 a barrel. But some analysts saw the new target becoming a reality much sooner.

The Wall Street Journal reported Thursday that the Paris-based International Energy Agency is in the middle of its first attempt to comprehensively assess the condition of the world's top 400 oil fields.

For years the IEA has predicted that supplies of crude and other liquid fuels will arc gently upward to keep pace with rising demand, topping 116 million barrels a day by 2030, up from around 87 million barrels a day currently.

The agency is now concerned that aging oil fields and diminished investment mean that companies could struggle to surpass 100 million barrels a day in production over the next two decades, the paper reported.

[wardoglrs]

Hemp makes a better fuel than oil. But you wouldnt know that cause we have been dumb downed to this great energy source. Its far better and cleaner
so why not grow it along with growing switch grass.
There are others choices than oil.

Cmon were in what century?. We saw all this coming
long ago. The powers that be want this planet destroyed with oil and war wake up people.

Read what I posted about what JFK said.He gets killed after this speach. Its even on you tube

[olydem58]

Wow there are alot of tools in here oil companies are ripping everone off. They refuse to produce more gas. The eco fools are not stopping more production but they are stopping short sited short term fixes that would only hurt our planet and produce oil for a short time it is not a fix. Oil Company bosses should be jailed for fraud and anti american activities(that one right out of your right wing book idiots) the middle east it all about oil has nothing to do with freedom impech bush jail his corprats along with him

[nothappyatall]

"The Democrats have prevented opening ANWAR since "

WHO? it''s been a repubiCON controlled rubber stamping legislature for the last 8 years.
Blame the eco-freaks and NIMBY''s who file lawsuits blocking it.

"The coward Carter prevented building more refineries."

Blame the eco-freaks and NIMBY''s who file lawsuits blocking it, NO ONE wants an oil refinery with its pollution in THEIR area or contaminating their ground water.

" Now Democrats have stopped us from drilling in the vast Colorado shale fields."

WHO?
Blame the eco-freaks and NIMBY''s who file lawsuits blocking it, are they all Democraps?


"Anyone who blames Republicans for the problem has their heads firmly embedded in their rear

Posted by Orgone "

Looks more like you need to get your terms straight, its not a dem/rep issue- blame the eco-freaks Earth First! Greenpeace, and NIMBY''s who file lawsuits blocking it all and want dams removed from rivers for the fish, and NO nuclear power plants.

[wardoglrs]

In the name of patriotism, we have participated in a planned deception to create a state of permanent war. In the name of profit, America has been sacrificed on the altar of the god of war, to create a global empire based on the mass-marketing of death.

%u201CWe are opposed...by a ruthless conspiracy that relies primarily on covert means for expanding its sphere of influence--on infiltration instead of invasion, on subversion instead of elections, on intimidation instead of free choice, on guerrillas by night instead of armies by day. It is a system which has conscripted vast human and material resources into the building of a tightly knit, highly efficient machine that combines military, diplomatic, intelligence, economic, scientific and political operations.

Its preparations are concealed, not published. Its mistakes are buried, not headlined. Its dissenters are silenced, not praised. No expenditure is questioned, no rumor is printed, no secret is revealed. It conducts the [war] with a war-time discipline no democracy would ever hope or wish to match...%u201D %u2013John F Kennedy, 1961.

"Anyone who would sacrifice freedom for security deserve neither". Ben Franklin (paraphrased)

"I would rather die with the constitution clinched in my fist, then live with shackles on my feet" Greywolf

[bobnjersey]

[Nice try NICEBOB....Gas has doubled since these worthless ''''no new drilling'''' Democrats took control of congress. What a pathetic bunch.]
[Posted by b48151 at 11:01 AM : May 23, 2008]

yea ... potato chip consumption has increased 30% too ... so maybe it''s the potato chips.

i''ve included actual ''facts'' ... you guys like those, right? or is it only the ones that make your argument?

why don''t you actually provide some real correlative or causual connection ... other than your myopic partisan view?

that''s right ... even though you all claim to analyze with facts ... and everyone else uses emotion ... you can''t!

[cwb631]

We are all to blame for this. You have Republicans who continue to give large tax breaks and subsidies to the oil companies while curtailing research money that could go into looking for alternative sources of fuel economy (fuel cell, electric cars). Ethanol is not the answer, simply a further benefit to already rick corporate farmers (not the mom & pop farms, I actually sympathize with them). On the other side are Democrats who support the UAW which fights any attempts at increasing fuel efficiency standards because this will some how destroy Detroit. Well guess what people the days of $30/hour, all benefits paid, and generous pension plans for non-college educated assembly line workers is over.

[bobnjersey]

[The Democrats have prevented opening ANWAR since the Clinton administration. The coward Carter prevented building more refineries. Now Democrats have stopped us from drilling in the vast Colorado shale fields. Anyone who blames Republicans for the problem has their heads firmly embedded in their rear **]
[Posted by Orgone at 10:54 PM : May 22, 2008]

lets see ... carter was last in office in 1980 ... only 28 years ago.

clinton''s been out since 2000 ... only eight years ago.

republicans have controlled congress since 1994 ... a mere 12 years (thru 2006).

republicans have controlled congress and the executive branch for the six years ''00 - ''06.

oil executives testified in 2007 that they don''t want to build more refineries ... they''d rather expand existing ones.

http://www.msnbc.msn.com/id/18160575/

devaluation of dollar and demand for ''oil as a commodity'' is credited with most of the recent price increases. this story is only a page scroll above your ignorant comment.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/03/18/BUQ3VLER8.DTL

who''s head is where?

[sharncedar]

Good to know that the Europeans are picking up the slack in the tourist industry. Nice to know that those luxury hotel rooms are getting filled. Hey, the best thing is they have to buy some dollars in order to pay for things here, so we can exchange even more of the worthless junk to make Hank Paulson and his friends rich. Glad we could do our part, Hank. Are you enjoying that new condo? How about your villa in Italy? Pretty nice? Great, glad the American people could help you out.

[luvcomments]

Wonder where one may find out the identity of all the oil speculators who are driving up the oil and gas prices to a false high? With what they are doing, plus the oil companies apparently finding it more profitable to import than to use the existing wells and refineries sitting idle all over the US, it should be obvious to anybody with a brain that this is an Enron-like fiasco. Meanwhile, Alaska is dying to get into the act with more greed-driven efforts to drill up there and too bad if they annihilate more wildlife - for absolutely no true reason whatsoever.

[bobnjersey]

[Thank-you clueless''''no new drilling''''Democrats.]
[Posted by b48151 at 06:08 PM : May 22, 2008]

is this what cheney had in his ''super secret energy plan'' ... drilling? why do you suppose they kept it secret? did the republican controlled congress between ''00 - ''06 secretly pass the measures you promote?

maybe they''re drilling secretly ... like they do everything else.

[bobnjersey]

[The solution is in the mirror you look into every morning........but until you figure it out I''''ll be spending the fat profits from my oil company stock and laughing my rear off at all of you.]
[Posted by Big_Tex4 at 04:57 PM : May 22, 2008]

hey tex ... how do you make your ''rear'' laugh? letterman wants to talk w/ you.

[williejammer]

Hello,
This is Willie.
I''m emailing my friends about the articles and this is a cool way to keep people informed about what''s happening in the news.
Sincerely yours,
Willie

[gce65]

We should all have a mass camp-out on the White House lawn.

[middleman8]

When everything goes belly-up, what the rich have becomes more valuable and harder to obtain.
Ask anyone, your parents/grandparents whoever lived during the "dirty thirties"

[wardoglrs]

When you find out the truth that the Dollar is counterfit, Then you might see what''s really going on.
We were warned by the forefathers about the central banks, They told us to use only gold & silver for true wealth. But your goverment in its deadly plan against you is now in play. Look at yourselves and tell me "You are Free". Tell me about the true wealth
of a nation, For if you think paper money has value
then ill sell you some ocean front property in Arizona.

[arlt1627]

I don''''''''t even know where to begin.....

Posted by arlt1627 at 03:20 PM : May 22, 2008

thats what you said on your wedding night
Posted by jamesm12341

Funny this is coming from a guy that is best friends with Rosie Palm!

[sistatee-2009]

Send more jobs to China, India and Mexico. That should help. Oh, wait, we already did that.

[bookwerm314]

GOD you are some fools.. "if we pumped here it would be fine" .. what flipping planet did YOU grow up on? The oil people sell at MARKET PRICE! does NOT matter if it is out of OUR country or another.. yes, would help our TRADE DEFICIT,.. but NOT our price. You are so stupid I am amazed that you can use a computer...

The REAL issue is that we have a Dollar worth HALF what it was pre Bush pre Stupidity pre Budget/trade deficit SO huge it destroyed our currency.. all because fools think you can have services and NOT pay for them .. ie tax enough to balance the budget. You can''t.. this is the world deciding the dollar is NOT worth much.. because the US is too full of stupid people exporting jobs, debt, and apparently their brains.

That $4.00 gas is REALLY $2.00.. in PRE BUSH $$.. In Europe they are paying almost the same. and no don''t say it is because of taxes there.. it isn''t .. in EUROS, a barrel of oil is about the same.. a bit more, but not huge like here..

And FOOD is also price in the international market.
Vote in real people.. not more LIEpublicans.. I WISH perot or Paul could fix this.

[msay3]

........but until you figure it out I''''ll be spending the fat profits from my oil company stock and laughing my rear off at all of you.

Posted by Big_Tex4 at 04:57 PM : May 22, 2008

Hey numbnuts!! If you were that well off from profits, you''d be checking out the market instead of posting on a lowly blog like this. Me thinks your mouth is where your money is...ROFLMBO!!!!!

[big_tex4]

Blah blah blah blah......you people should be happy you have a car to put gas in. Blame this guy...blame that guy...blame "the man". You make me ill with your blame game. Everyone here needs to take an economics class and get a clue. The solution is in the mirror you look into every morning........but until you figure it out I''ll be spending the fat profits from my oil company stock and laughing my rear off at all of you.