Holiday road

Cheap gas has revived the Great American Roadtrip and demand for attractions along the way.

U.S. consumers seem to have reverted to their gas-guzzling ways in response to this period of sliding energy prices.

The year-over-year trend in gasoline consumption in unit (real) terms swung from flat at the beginning of 2014 to 3% for the first two months of this year. The consumer has not been filling up the tank like that in more than a decade.

This year’s growth in gasoline consumption roughly matches the 5% year-overyear growth rate in miles travelled by the nation’s motorists. In the past 12 months, Americans have driven a record of more than three billion miles and made an unheard of 294 million trips to the country’s national parks.

One effect of this increase in demand is that real spending growth at theme parks and the like is up nearly 9% over the past year, almost tripling the overall trend in consumer expenditures. This is echoed in Walt Disney

Co.’ s stock price, which has been hitting new peaks of late and is now above US$100.

Meanwhile, the accommodation and hotel segment of the S&P 500 is up 23% over the past year, more than doubling the advance in the overall market.

As an aside, investing in this segment is a natural way to hedge a portfolio in periods of energy price weakness, since it’s where people tend to spend the windfall and this part of the spending pie is not counted in the monthly retail sales data.

And don’t look now, but the era of the fuel-efficient smart car seems to be over — Prius, Tesla move aside; Land Rover, Jeep come right in.

There is an accelerating trend back to the bigger crossover vehicles. Sales of light trucks and sport utility vehicles are at nine million annualized units in recent months — running at decade highs and up 12% year over year.

Regular auto sales have been weakening noticeably of late. At 7.2 million annualized units, they are actually down to three-year lows and sales have slumped 1.9% year on year. But the light truck share of the vehicle market has soared to a 12-year high of 55%.

Meanwhile, the car rental business is booming as well, up an astounding 13% year over year on a real basis, which is the fastest pace in 12 years. Truck leasing has soared more than 20%, almost doubling the impressive 11% increase in car leasing activity. Again, the trend towards the gas-guzzling machines is evident here as well.

We have to continue to remind ourselves that the U.S. is a country that loves cars and loves to drive … and not just on Route 66 but the I75 to Orlando, too.