May 2, 2022

Raise gas prices, hike airfares, and it doesn’t seem to matter – at least for now – people are still bound and determined to travel.

“People have been spending, but they’ve been good about saving, so there’s still money to travel,” said Jim Hagen, secretary of the South Dakota Department of Tourism.

“There’s pent-up demand, people are sick of the latest two years, and they don’t care what they have to pay.”

The data appears to back that up.

As the nation marks Travel & Tourism Week, AAA South Dakota is reporting 30 percent of South Dakotans surveyed in April are planning to travel more this summer than last, and many say it will be their first significant summer travel since March 2020.

For instance: 

• 70 percent of South Dakotans are planning a trip of 50 miles or more this summer.
• 30 percent are planning to travel more than last summer.
• 14 percent are planning their first significant summer travel since before the pandemic.
• 57 percent are planning multiple trips.
• Of those traveling, 88 percent are doing so domestically, 2 percent are planning international travel, and 11 percent are planning to do both.

Record air travel, rising fares

The inclination to travel already has shown itself through the first quarter of the year.

The Sioux Falls Regional Airport set an all-time record for passenger traffic in March, counting more than 112,000 passengers in or out of the airport for the month.

It helped that Allegiant Air and Frontier Airlines added new destinations, offering more seats than in the past, executive director Dan Letellier said.

“Just to Phoenix, there were close to 400 passengers a day flying out,” he said. “A lot of people relocate during the winter months from eastern South Dakota to Arizona. They’re continually bopping back and forth.”

Looking ahead, the airport is at 10 percent to 15 percent more available seats than historically for the spring and summer, he said.

But steep hikes in airfares in recent weeks are obvious. In late March, Bloomberg reported domestic airfares had risen 36 percent since the start of the year.

“The fares are a combination of higher oil prices – they’re certainly coming down, but that’s a direct impact on jet fuel and a significant expense for airlines – labor issues are rampant throughout the industry but pilots in particular,” Letellier said. “So you’re seeing across the country limits on availability, flight segments, seats because there aren’t enough pilots, flight attendants and ground crews, in combination with really strong demand despite the increase in fares.”

Those “cheap seats” that are available are getting “gobbled up” and leaving only higher-end options, he added.

“So it’s going to be interesting to see. It’s not going to be as banner of a summer as we though it might be just because of the price of airfares, and it’s not just airfares – hotels, rental cars, restaurants, all are much higher. So people may have to reevaluate, but the demand is so strong. People are tired of staying home, and they’re going to make that trip.”

It’s a similar story with gas prices. The AAA survey found 38 percent of South Dakotans aren’t making them a consideration in their travel planning, but 48 percent are taking fewer or shorter trips, and 14 percent say they will adjust their budget for lodging or dining out because of gas prices.

For those who are staying home or are unsure about their summer travel plans, more than 40 percent cite gas prices as the biggest factor influencing that decision.

“Our projections are that it’s going to be a very strong summer,” Hagen said. “U.S. residents are planning to travel as much or more this summer despite higher gas prices and despite inflation.”

As he has toured and talked to businesses statewide, “what we’re hearing is really strong reservations,” he continued. “We are seeing some hesitation from a number of campgrounds that are seeing cancellations, but those fill in almost immediately from other campers. Other than that, reports have been really solid.”

In Sioux Falls, occupancy averaged 56.1 percent for the first quarter, second only to Fargo at 56.5 percent in a set of 10 other comparable communities that includes Des Moines, Omaha and Rapid City, said Teri Schmidt, executive director of Experience Sioux Falls.

For March, Sioux Falls led the way at 62.7 percent occupancy. That’s 14.4 percent ahead of the same time in 2021.

Photo by Kim Vanden Bosch

“We look like we’re going to have a strong summer unless people start canceling,” Schmidt said. “We are a fly-in market, but the majority is drive-in … so I think that will help keep those number up, and the other thing is we’re a regional place to come get away. So maybe that family that says we’re not going to Disney this year because of airline prices (goes) to Sioux Falls and times it around an event we have that will be fun.”

Events such as the Levitt at the Falls concert series and first-ever Innoskate skateboarding and arts festival will be a draw, she said, along with group business such as the Golden Age Games, which is scheduled to bring 500 veterans for a competition in July.

Attractions such as Thunder Road and Wild Water West help bring visitors too, Schmidt added.

“And everything at Falls Park continues to increase, our numbers continue to climb, so that’s a good indicator because we can track it well,” she said. “Things like softball and soccer tournaments are looking good, so once again it’s wait and see and fingers crossed.”

When travelers are asked what they’re seeking in a vacation destination, “what they’re saying is family trips, seeing scenic beauty, outdoor activities, road trips and visiting historical sites, and we have all that in spades, whether you’re urban or rural in South Dakota,” Hagen said. “So we’re really honing in on that.”

The department also is broadening its efforts to emphasize destinations in more rural areas of the state, including those that might make appealing road trips for in-state or nearby visitors.

It’s called Great Finds, and “essentially is a mobile passport program that puts an emphasis on … hidden gems to introduce visitors to those out-of-the-way places,” Hagen said.

Business travel attempts rebound

Business travelers slowly are returning, those in the industry said.

“More than 90 percent of American businesses say over the next three months they’re looking to get back to normal in terms of business travel for their organizations, so that’s really encouraging,” Hagen said. “Conventions, meetings and international travel were the three areas hit so hard during the pandemic, and we’re seeing travel interest and bookings start to pick up.”

Locally, business travelers are returning for some corporate meetings and events, but the broader convention and large-meeting market is “slow to come back,” Schmidt said.

“We normally do an annual sales blitz in D.C., and we’re learning many, many planners are still working from home, so how do we get to those people? It’s a challenge, so we just have to remain very focused, we have to remain very diligent in gathering information so we pinpoint those groups who when they do decide to travel as a convention group will come back to Sioux Falls or come to Sioux Falls for the first time.”

The visitor industry business community locally, including hotels, facilities and attractions “is working so hard together to try and gain the business back to pre-COVID numbers and beyond,” she added.

Celebrate National Travel & Tourism Week