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High gas prices not expected to slow down South Dakota tourism industry in 2022

Tourism is among the state’s largest industries, and many South Dakota towns and residents rely on visitor spending to maintain a thriving economy.

Duane Johnson gas1.jpeg
A recent fill-up in Rapid City cost Wisconsin tourist Duane Johnson nearly $100, but the high price of gas has not prevented Johnson and his wife from taking a vacation this year.
Photo: Bart Pfankuch, South Dakota News Watch
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Even though fuel prices have hit an all-time high, state officials and business operators in the South Dakota tourism industry remain optimistic that the summer of 2022 will be another record-setting season for visitors and revenues.

Tourism industry experts say the post-COVID desire to travel, South Dakota’s wide variety of tourist attractions and a reputation for great hospitality have overridden visitor concerns over high gas prices, at least so far in 2022.

Gas prices have been on a steady rise in recent months, and are well above what drivers paid for fuel last year.

On May 19, 2022 the national average price of regular unleaded gas was $4.59 per gallon, according to the American Automobile Association. The South Dakota average was $4.20 per gallon, AAA said, and all 50 states had an average price over $4 per gallon on that date.

For comparison, the national average price on May 19, 2021, was $2.90 per gallon of unleaded.

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Deb Schuetzle, operator of the Hitching Horse Inn in Pierre, credits South Dakota’s welcoming reputation as a big reason the state remains a popular tourist destination even during a time of soaring fuel prices.

“We really thought that maybe our gas prices may affect our tourism season, but thus far, it has not,” said Schuetzle.

The Hitching Horse Inn has routinely been full this year and has had to turn some people away, Schuetzle said.

Tourism is among the state’s largest industries, and many South Dakota towns and residents rely on visitor spending to maintain a thriving economy.

Rapid City Pilot sign.jpeg
Gas prices in mid-May, including at the Pilot gas station in Rapid City, were more than a dollar per gallon higher in 2022 compared to the year prior. Diesel prices are climbing even faster than prices for gasoline.
Photo: Bart Pfankuch, South Dakota News Watch

In its 2021 Economic Impact Report, the South Dakota Department of Tourism said 13.5 million people visited the state that year. Those visitors spent an estimated $4.4 billion in 2021, an increase of 30% over 2020.

The industry generated $354 million in state and local sales taxes in 2021. Visitor spending represents 5.1% of South Dakota’s economy and supports one in every 17 jobs in the state.

“Tourism in South Dakota is a job-creating, revenue-generating industry that plays a vital role in supporting the state’s economy year after year,” Katlyn Svendsen, spokeswoman for the South Dakota Department of Tourism, wrote to News Watch in an email.

Key branches of the tourism industry include lodging, retail shopping and food and beverage sales. With fuel prices almost a dollar higher per gallon than in 2021, transportation may play a bigger role in the choices tourists make in 2022 but is not expected to result in a major drop in visits or revenues, Svendsen said.

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“We may see shorter trips, less money being spent on food, beverage, souvenirs, etc. [But] we remain confident,” Svendsen wrote.

Teri Schmidt, executive director of Experience Sioux Falls, which aims to attract visitors to the Sioux Falls area, said gas prices do not appear to be a major deterrent to visits to the region so far.

“Our visitor guide requests are up, the interest in Sioux Falls, the calls that we’re getting … those are all up. If those are any indication, we should have a really good summer again,” said Schmidt.

Svendsen added that in the first quarter of 2022, the state was already outpacing 2019 visitors counts by 18%. She added that Arrivalist, a mobile geolocation tracking company, showed that South Dakota had the highest jump in overnight stays so far this year, with an 11% increase compared to 2019.

While the high gas prices are making travel more expensive, many visitors are continuing to make vacation plans.

The high price of petrol did not dissuade Duane Johnson and his wife Trish from taking a long driving vacation this month. The retired couple from Wisconsin stopped to fuel up in Rapid City on May 17 on their way home after visiting their daughter in Salt Lake City.

In Rapid City, they paid $4.48 a gallon for mid-grade unleaded gasoline. Unleaded cost them $4.80 a gallon in Salt Lake City, Johnson said.

“How about that? Almost $100 to fill up,” said Johnson.

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Johnson said the couple discussed the cost of gas before embarking on their vacation, but decided the desire to visit their daughter overrode their concern over fuel costs.

“The gas prices do affect us, but they haven’t stopped us,” he said.

Johnson said the couple’s wanderlust will keep them on the road this summer, with trips planned to Montana and again to Salt Lake City. But if gas goes to $6 a gallon or higher, Johnson said the pair will likely fly rather than drive, or perhaps cut back on travel altogether.

According to 2022 fuel prices outlook published by Gasbuddy, a site that predicts and publishes fuel prices online, drivers may save a little at the pump throughout the summer months. The predicted rate for May averaged $4.25 per gallon with June falling to $4.21, July at $4.18, and $4.23 in August.

— This article was produced by South Dakota News Watch, a non-profit journalism organization located online at SDNewsWatch.org.

Related Topics: GASOLINETOURISMSOUTH DAKOTA
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