March 13, 2008 issue
How Long Before the 3 Becomes a 4?
Story by Kathleen McFadden
Nationwide, gas prices hit record levels on Wednesday, March 12, and experts say the numbers will continue to climb along with the price of crude oil. For the first time ever, oil prices topped $109 a barrel on Tuesday, March 11. Just two months ago, in January, oil cost $87 a barrel.
By Tuesday, the national average retail price of gas had risen 27 cents in the last month to $3.227 a gallon, matching the all-time high set on May 24, 2007, according to AAA. By Wednesday, the national average price of a gallon of regular gas had risen by 1.9 cents overnight to $3.246 a gallon, yet another new record, according to AAA and the Oil Price Information Service.
And experts say motorists should prepare to pay nearly $4 a gallon—and in some places even more than that—before the price of gas finally comes down in the late spring as high prices reduce demand.
AAA Carolinas provides the following data to illustrate how prices have increased over the past year in the Boone area:
• Current area average: $3.235
• Last week: $3.217
• Last month: $3.041
• 6 months ago: $2.773
• Last year: $2.491
The high price of gas could have a significant impact on the High Country. If people reduce their leisure travel this spring and summer, local hotels, restaurants and retail establishments won’t be the only ones who feel the pinch.
At the Watauga County Board of Commissioners pre-budget retreat last week, County Manager Rocky Nelson alerted the commissioners to “an alarming trend” in the county’s sales tax revenue. Compared with last year, sales tax revenues are below projections.
By December 2006, the county had collected 52.13 percent of projected sales tax revenues. In contrast, by December 2007, the county had collected 47.7 percent of projected sales tax revenues.
For that reason and others, Nelson told the board that he would prepare a conservative budget for the 2008-09 fiscal year. Decreased tourism in the High Country because of high gasoline prices could have an even more significant impact on county revenues.
On the other hand, one of the tourism industry’s leading marketing strategists, Peter Yesawich, told a group of travel and tourism professionals in February 2007 that they didn’t need to be overly concerned about gas prices until prices reached $3.50 per gallon.
During the presentation in Asheville sponsored by Our State magazine, Yesawich discussed a number of travel trends, and pointed out that 53 percent of the public said they would change their plans if gas reached $3.50 per gallon. But what does “change their plans” mean?, Yesawich asked the group. The answer is that people will still take vacations but will take shorter trips and purchase less on their trips to help cover the increased cost.
For years, High Country tourist attractions and tourist organizations have marketed the area as a good “long weekend” destination for regional and in-state travelers. The rising cost of fuel could potentially attract more visitors this spring and summer who decide to forego longer trips in favor of shorter ones.
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