MTPR

Rising Gas Prices Could Affect Tourist Spending In Montana

Apr 9, 2018

Gasoline is getting more expensive and prices are expected to climb even higher for the summer driving season. Edward O’Brien reports on what kind of an impact that could have on Montana’s summer tourism industry.

Just last week gas prices hit their highest level in nearly 1,000 days, before tapering back a half penny to a national average of $2.65 cents a gallon. But according to industry analysts at the GasBuddy fuel tracking app, that’s likely only a temporary reprieve.

This doesn’t really worry Norma Nickerson of the University of Montana’s Institute for Tourism and Recreation Research.

"If you remember back to 2008 when things started to fall apart and gas prices went up pretty high, we did a little study. We found out that the cut-off point at which people would say, 'Nope, I’m not going to travel anymore,' was about $4 a gallon," Nickerson says.

Nobody’s predicting $4 gas this summer, but crude prices have jumped in the wake of production cuts by major exporters. Refiners are starting the transition to more expensive summer-grade gasoline on the eve of the summer driving season.

"This is April, most people who are coming from further away already know they’re coming and they’re ready for it. It’s the shorter-haul people who are probably going to pull back a little bit," Nickerson says.

Nickerson points out that higher fuel prices do tend to affect visitors' spending habits, resulting in slightly fewer retail sales, restaurant visits and so-called "tourist experiences" like horseback riding or guided tours.

Nonresident visitors spent over $3 billion in Montana last year. National forecasts are predicting a two percent increase in leisure travel for 2018.