Season on the brink: Will gas prices keep us home?
Written by Grand Rapids Press   
Monday, 18 April 2005 02:05
Wendy Ojeda figures she can rent a hotel room and lounge around the pool for a weekend for about the same price it will cost the Jenison family to fill up their Chevy Blazer for a summertime trip.

"We'd rather just get a hotel room than stick gas in the SUV," she said.

The recent jump in gas prices has caught the state's $16 billion tourism industry by surprise, leaving a cloak of uncertainty over the summer travel season that opens Memorial Day weekend, May 28-30.

"We just spent $298 on gas for a trip to Florida on spring break, and it sounds like prices are going to get worse," Ojeda said. "We were really upset to see how high it had gotten in Michigan by the time we got back."

The Press interviewed Wendy and Angel Ojeda one year after talking to them about gas prices last spring. Last year's spike in gas prices crimped their travel plans even then.

Gas prices edged over $2 a gallon a year ago, just after they invested in a new camper trailer and the Blazer with the idea of traveling with their children, Tiara, 13, and Joey, 7.

Instead, they put the brakes on travel.

"We only used our camper five times, and that was close to home," Ojeda said.

"We have a small SUV, and my husband is spending $30 a week to drive back and forth to work, so we know it's going to be really expensive if we start pulling the trailer" this summer.

Now, they are ready to mothball the trailer, she said.

That kind of talk makes the tourist industry anxious.

"Many of our property owners and clients are worried because there have been fewer bookings in May and June," said Kathy Tedsen, editor and publisher of the bi-annual Michigan Travel Guide, which lists hundreds of cottages and condos for rent in the state. "July and August are fairly full, but there still are openings, and that's unusual."

Tedsen said last year's spike in gas prices affected long-distance driving and certain areas of the state, such as the western part of the Upper Peninsula and the Traverse City area, had up to 10 percent lower occupancy rates during prime times.

"If gas prices keep going up, and the economy doesn't improve, young families can't afford to travel, and the family-oriented resorts may suffer," she added. "Things are starting to pick up, but indications show there definitely could be an impact."

According to Smith Travel Research, it's too early to tell how the leisure traveler will react to higher fuel costs.

"Occupancy rates typically spike in June and July, and gas prices typically do have some impact," researcher Jan Freitaj said. "Anecdotally, people will still go where they want to go, but will spend less."

Over the winter, the state's hotel occupancy rates showed signs of recovery over low 2004 rates, he said. They rose to an average 46.2 percent of rooms filled, up from 45.1 percent.

Glass half full?

AAA of Michigan is betting on gas prices as a possible plus for the state's tourism. Requests for the travel club's tour guides and trip maps have increased, and advanced bookings are up, according to spokeswoman Nancy Cain.

"Historically we've seen that in the past, high gas prices keep people in Michigan," Cain said. "We predict about 1.1 million people will travel this summer, and most of them will be driving."

Gas prices have not risen 50 cents a gallon since January, "and we may have seen the worst of it, but we just don't know," Cain added. "People were shocked last year when gas hit around $2.13 for Memorial Day, but they still took vacations."

Don Holacek, director of Michigan State University's Tourism Center, said that last summer was more dismal than expected primarily because of poor weather, so the law of averages suggests the sun may shine brighter in 2005.

"I think we'll be on the plus side, with a slight increase in volume, but the spending won't be there, and that's a main concern," he said.

"It's going to be harder for the hospitality industry to make money, because people will be more sensitive to discretionary spending if they're coping with high gas prices."

Motor coach tour operators are holding their breath in hopes gas prices don't go higher.

Gail Andrus-Hendges, owner of Gail Andrus Travel in Grand Rapids, said two of the three motor coach companies she uses tacked on a 3 to 5 percent fuel surcharge last year, then increased rates again at the beginning of this year.

"This newest gas hike has been so sudden, and it's too early to tell what the impact will be," Andrus-Hendges said. "It's very unlikely that we will pass an increase onto our motor coach customer, but it's very hard to know right now."

Andrus-Hendges said summer reservations so far are as strong as last year. The company is booking shorter trips to keep prices down and encourage travel.

"The higher fuel costs may encourage people to take a motor coach tour rather than spending the money to drive themselves," she added. "We haven't had any cancellations, and we hope that continues."

At Frederik Meijer Gardens and Sculpture Park, officials said if the traffic seen during spring break is any indication, summer business should be good.

"We had our single highest record day on April 5, with 5,579 visitors," said Brian Burch, gardens spokesman. "Despite the gas prices, we're remaining positive about the upcoming season."

Burch said about 20 percent of visitors hail from Detroit, Lansing and Flint, while about 5 percent come from northern Ohio, Indiana and Illinois.

"When we opened the Children's Garden last year, we had a 5 percent increase in our volume for the year, and it was amazing," Burch said.

"We recognize that gas prices may influence long distance traveling," he said, "but a lot of people will be taking shorter trips, and we hope they'll choose us."

Craig's Cruisers Fun Parks intends to ride out the latest gas hikes, said Gordon Osborn, director of marketing for the Hart-based chain.

With close to 100 gas-powered go-carts at four West Michigan locations, it's going to cost more to fill each cart's five-gallon tank.

"At this point, we don't plan on passing that cost on to the consumer, and it would have to go up to $4 a gallon before we would do that," Osborn said. "We've been around for 26 years, and we don't lower the prices when gas goes down. We won't when it goes up, either."

Osborn said the four parks had better attendance during spring break this year than in 2004, "and we embrace anything that brings visitors into West Michigan."

Smooth sailing

Marina owners are expressing hopes for a strong summer. Nearly all slips at Grand Isle Marina in Grand Haven are spoken for, its manager said at this year's boat show.

But it's going to take more money to fill up on the water as well. Gas prices at marinas are typically 50 to 60 cents a gallon higher than on land.

David Lundberg, general manager of the Wharf Marina in Grand Haven, said boaters should prepare to pay a lot more at the pump this year.

"I don't think it would surprise anyone to see gas prices over $3 a gallon on the water this year," he said.

But will it stop owners of big boats -- with 75- to 400-gallon tanks -- from handing over hundreds or even a thousand dollars to fill 'er up? No, Lundberg said. But others thought boaters may opt for shorter trips.

It won't be the fuel pump that makes the difference for the golf industry.

Jeff O'Malley, director of golf at the Pilgrim's Run Golf Club in Pierson, said he expects weather to play a bigger role when it comes to the summer's success. The course opened a week late this year because of cold weather, but has been going great guns ever since, he added.

"The gas prices will affect everything, but most of our traffic is from the Grand Rapids area, and we're only a half hour away," O'Malley said. "We may even gain more golfers from Chicago and Detroit who don't want to drive farther north, so I think we'll be fine."

Late bookings

John Cwik owns Park House B&B and Cottages in Saugatuck with his wife, Sallie, and another couple, Lynda and Joe Petty. He said the business is practically full for the summer, but the uncertain times have changed the way reservations are made.

"We don't have as many regular customers (who) automatically book a room for the same time each year, and a lot of people seem to be waiting until the last minute to make a call for a reservation," Cwik said.

"There seems to be more concern over time off (from work), layoffs and the economy, and actually the higher gas prices may help get us the people who used to drive to Florida."

Dana Johnson, Comerica Bank's chief economist, said the softer American dollar may help Michigan by drawing more tourists from Canada and a stronger European currency should bring more travelers from abroad.

"We're going through a typical seasonal adjustment in gas prices, and maybe we're not that far from our peak," Johnson said. "We're really lucky that our run-up of energy prices is coming in the context of a steadily growing, healthy economy, rather than the whole country going through a recessionary time."

Michigan's Adventure amusement park opens May 21 and over Memorial Day weekend will launch its new Funnel of Fear, a giant funnel water slide, as a new draw to the park eight miles north of Muskegon.

"Our draw is primarily from West Michigan, and we're hoping gas prices, mixed with nice warm weather, will keep people closer to home," said Camille Jourden-Mark, general manager. "We haven't raised our prices since 2002, and we have great value."

Soaring Eagle Casino and Resort in Mount Pleasant has a strong list of reservations for the summer and doesn't expect many cancellations, said Jeff Duke, rooms manager.

The resort is getting ready to open its 10,000-seat outdoor amphitheater on May 26 with rock group Lynyrd Skynard.

"People are still going to drive two to three hours for a vacation, and we're anticipating a big summer with our indoor and outdoor entertainment," Duke said. "Gas prices are not going to keep them home."

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