Automobiles at the Heart of Travel
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by
Barb Edson
| 3 September 2022

Automobiles at the Heart of Travel

Despite auto industry challenges, inflation and high gas prices, the automobile remains an essential component of the American way of life.

If you’re in doubt, consider this summer’s travel season wrapping up over Labor Day weekend. As gas prices fall, travel over the final summer holiday are expected to reach records.

And even though the national average for a gallon of gasoline topped $5 around July 4th, AAA predicted that 42 million people would take to the road for the holiday weekend — that’s a 3.7% increase over 2021, which was a high itself.

they planned to travel for Independence Day, which is an 8% increase over last year. Of these travelers, 80% noted they would be traveling by automobile. And travel by a vehicle, car or RV claims 88% of the share of all travel.

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Life: Social Distancing, but on the Move

One learning from the COVID-19 pandemic was that a lot of people were very happy to avoid crowded travel scenarios. AAA reports the share of people traveling by air will be the lowest since 2011. Experts cite recent issues with air travel such as substantial delays, canceled flights, price hikes and continued concerns about catching COVID-19 as reasons for this decline.

A survey posted in Car and Driver by the University of Illinois at Chicago sheds some insight as well.

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Travel by personal vehicle was “deemed to be extremely low risk“ by the highest percentage (59%) of respondents.

This means travelers are choosing the time-honored road trip for long distances this summer and likely beyond for multiple reasons.



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Liberty: Freedom From Restrictions

A major pandemic-fueled trend has also taken hold in the broader travel industry: revenge travel. Roughly defined, revenge travel is the large influx of people traveling who want to make up for the time and experiences they lost because of the pandemic.

Eric Hrubant, the owner of CIRE Travel, a luxury travel agency in New York City, told NPR that many travelers thinking of trips to Europe were out of luck due to a tidal wave of interest. The mix of short staffs and airport headaches have these travelers searching for road trips, for something that’s still unique and often a long drive.

And the trend goes beyond just car travel. Last year, recreational vehicle (RV) sales had a banner year as Americans decided they no longer wanted to be cooped up in their homes and took to the great outdoors. This year, RV sales are still holding strong.

U.S. dealers are on pace to sell about 550,000 RVs, according to Monika Geraci, a spokesperson for the RV Industry Association of Virginia. This is in contrast to the more than 600,000 vehicles ordered in 2021. “RVing remains a popular option for consumers who are looking for the freedom to travel while also controlling their costs. The continued popularity of RVing means we are on track to reach the second-best year for RV shipments,” says RV Industry Association President and CEO Craig Kirby.



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Happiness: Keeping Costs Low

As car travel increases and gas prices relatively high, consumers may become even more concerned with fuel efficiency. Campaigns centered around great gas mileage will certainly pique consumer interest and promote value in certain vehicles for OEMs and dealers.

Car insurance is another factor. Car insurance companies look at average miles driven by a person to determine rates. With an increase in miles driven, potential buyers may find themselves needing more competitive insurance rates than before. Products such as CDK Salty help buyers find the perfect policy while helping dealers close deals quicker.

Salty’s insurance platform uses cutting-edge technology to build a customized, competitive and bindable insurance quote within minutes.

Driven by artificial intelligence (AI), customers get customized quotes right at the dealership, helping to eliminate opportunities lost from them leaving the location to go insurance shopping.



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Driving It Home

Civic planners and climate activists may have valid reasons to make our largest cities more pedestrian and cyclist friendly, but for many Americans the open road still calls. Understanding that this fabric of our country will carry on, our industry needs to provide consumers with solutions that deliver comfort while keeping an eye on their budgets.

BARB
Barb Edson

Barb Edson is senior vice president and chief marketing officer at CDK Global.

Barb and her team focus on delivering successful marketing and commercial strategies that help strengthen connections across the automotive retail ecosystem for CDK, its dealer and manufacturer customers and the consumers they serve. She has more than three decades of business strategy and marketing experience in software and technology.