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Columbia Business Monthly

The Business Narrative: Travel Forecast

Jun 27, 2024 09:32AM ● By Donna Walker

(Photo by 123RF)

AAA: 70.9 Million US Travelers To Travel During July 4th Week

AAA projects 70.9 million travelers will head 50 miles or more from home over the Independence Day holiday travel period.


For the first time, AAA looked at the entire July 4th week, plus the Saturday before and the Sunday after the holiday.


This year’s projected number of travelers for that time period is a 5 percent increase compared to 2023 and an 8 percent increase over 2019.


“With summer vacations in full swing and the flexibility of remote work, more Americans are taking extended trips around Independence Day,” said Paula Twidale, senior vice president of AAA Travel.


Twidale added, “We anticipate this July 4th week will be the busiest ever with an additional 5.7 million people traveling compared to 2019.” 


AAA projects a record 60.6 million people will travel by car over Independence Day week – that’s an additional 2.8 million travelers compared to last year.


This year’s number also surpasses 2019 when 55.3 million people traveled by car over July 4th week. AAA car rental partner Hertz says Dallas, Denver, Salt Lake City, Los Angeles, and San Francisco are the cities displaying the highest rental demand during the holiday week.


The busiest pick-up days are projected to be Friday, June 28, Saturday, June 29, and Wednesday, July 3.  


Gas prices are lower than last year when the national average was $3.53. Pump prices will likely continue going down leading up to Independence Day. 


At that point, they will likely level off and remain relatively stable until after Labor Day, similar to last year, officials said.


An important caveat is hurricane season – underway now – which could affect gas prices should a storm negatively impact Gulf Coast oil production and refining centers, the officials said. 


The number of air travelers is also expected to set a new record. AAA projects 5.74 million people will fly to their July 4th destinations. That’s an increase of nearly 7 percent compared to last year and a 12 percent increase over 2019.


AAA booking data shows domestic airfare is 2 percent cheaper this Independence Day week compared to last year, and the average price for a domestic roundtrip ticket is $800.


Airports are expected to be packed throughout the week, and AAA recommends arriving 2 hours early, reserving parking ahead of time, and traveling with carry-on luggage versus checked bags to save time and money. 


More than 4.6 million people are expected to travel by other modes of transportation, including buses, cruises, and trains.


This category is seeing an increase of 9 percent compared to last year, but this year’s number is shy of 2019’s figure of 4.79 million.


Cruising continues its remarkable post-pandemic comeback. This time of year, Alaska cruises are in high demand, making Seattle and Anchorage top domestic destinations.

Cruise travelers are also finding deals this summer.


With new ships coming onto the market – and going for a premium – some cruise lines have been offering targeted discounts to fill older inventory for remaining cabins. 


INRIX, a provider of transportation data and insights, says the worst times to travel by car before and on July 4th are between 2 p.m. and 7 p.m.


Drivers should hit the road in the morning, and travelers returning on Monday, July 8th should avoid rush hour traffic in the morning and afternoon. 


For this forecast, the Independence Day holiday travel period is defined as the nine-day period from Saturday, June 29 to Sunday, July 7.


Historically, the Independence Day holiday period included only one weekend. This is the first year the Independence Day holiday travel period is a longer timeframe with two weekends included. 

SBA Approves Governor’s Request for Disaster Assistance

Following Gov. Henry McMaster's June 21 request, the U.S. Small Business Administration (SBA) announced that South Carolina's businesses and residents affected by the June 10 severe weather are eligible to apply for low-interest disaster loans.


The declaration covers Berkeley County and the adjacent counties of Charleston, Clarendon, Dorchester, Georgetown, Orangeburg, and Williamsburg.


To assist businesses and residents affected by the disaster, the SBA will open a Disaster Loan Outreach Center (DLOC) in Berkeley County at 9 a.m. on Monday, July 1, 2024 at the Sangaree Library, 595 Sangaree Parkway. 


Customer Service Representatives will be available at the center to answer questions about the disaster loan program and help individuals complete their applications.


For small businesses, small agricultural cooperatives, small businesses engaged in aquaculture and most private nonprofit organizations, the SBA offers Economic Injury Disaster Loans (EIDLs) to help meet working capital needs caused by the disaster.


EIDL assistance is available regardless of whether the business suffered any physical property damage.


Loans up to $500,000 are available to homeowners to repair or replace damaged or destroyed real estate. Homeowners and renters are eligible for loans up to $100,000 to repair or replace damaged or destroyed personal property.  


Applicants may be eligible for a loan amount increase of up to 20 percent of their physical damages, as verified by the SBA for mitigation purposes.


Eligible mitigation improvements may include a safe room or storm shelter, sump pump, French drain or retaining wall to help protect property and occupants from future damage.


Interest rates are as low as 4 percent for businesses, 3.25 percent for nonprofit organizations, and 2.688 percent for homeowners and renters, with terms of up to 30 years.


Interest doesn't begin to accrue, and monthly payments are not due, until 12 months from the date of the initial disbursement. Loan amounts and terms are set by the SBA and are based on each applicant's financial condition.


Applicants may apply online and receive additional disaster assistance information at Applicants may also call SBA's Customer Service Center at (800) 659-2955 or email [email protected] for more information on SBA disaster assistance.


For people who are deaf, hard of hearing, or have a speech disability, dial 7-1-1 to access telecommunications relay services.


The filing deadline to return applications for physical property damage is Aug. 23, 2024. The deadline to return economic injury applications is March 24, 2025.

Annual Bank Stress Test: Large Banks Would Endure Greater Losses But Are Well Positioned To Weather Severe Recession

The results of the Federal Reserve Board's annual bank stress test showed that while large banks would endure greater losses than last year's test, they are well positioned to weather a severe recession and stay above minimum capital requirements.


Additionally, the Board published aggregate results from its first exploratory analysis, which will not affect bank capital requirements.


"This year's stress test shows that large banks have sufficient capital to withstand a highly stressful scenario and meet their minimum capital ratios," Vice Chair for Supervision Michael S. Barr said. "While the severity of this year's stress test is similar to last year's, the test resulted in higher losses because bank balance sheets are somewhat riskier and expenses are higher."


Barr added, "The goal of our test is to help to ensure that banks have enough capital to absorb losses in a highly stressful scenario. This test shows that they do."


The Board's stress test is one tool to help ensure that large banks can support the economy during downturns.


The test evaluates the resilience of large banks by estimating their capital levels, losses, revenue and expenses under a single hypothetical recession and financial market shock, using banks' data as of the end of last year.


The individual results from the stress test inform a bank's capital requirements to help ensure a bank could survive a severe recession and financial market shock.


All 31 banks tested remained above their minimum common equity tier 1 (CET1) capital requirements during the hypothetical recession, after absorbing total projected hypothetical losses of nearly $685 billion.


Those tested included big institutions such as Bank of America and regional lenders such as Truist.


Under stress, the aggregate CET1 capital ratio — which provides a cushion against losses — is projected to decline by 2.8 percentage points, from 12.7 percent to 9.9 percent.


Officials said that while this is a greater decline than last year's, it is within the range of recent stress tests.


This year's hypothetical scenario is broadly comparable to last year's scenario, the officials said. It includes a severe global recession with a 40 percent decline in commercial real estate prices, a substantial increase in office vacancies, and a 36 percent decline in house prices.


The unemployment rate rises nearly 6-1/2 percentage points to a peak of 10 percent, and economic output declines commensurately.


With the scenario relatively unchanged from last year, officials said there are three main factors that explain the larger capital decline in this year's test:


* Substantial increases in banks' credit card balances combined with higher delinquency rates have resulted in greater projected credit card losses;

* Banks' corporate credit portfolios have become riskier, partly reflected in banks' downgrading of their own loans, resulting in higher projected corporate losses; and

*Higher expenses and lower fee income in recent years, resulting in less projected income to offset losses.


The nearly $685 billion in total projected losses includes $175 billion in credit card losses, $142 billion in losses from commercial and industrial loans, and nearly $80 billion in losses from commercial real estate.


The Board also conducted an exploratory analysis, including two funding stresses to all banks tested and two trading book stresses to only the largest and most complex banks.


The exploratory analysis is distinct from the stress test, exploring additional hypothetical risks to the broader banking system.


The two funding stresses include a rapid repricing of deposits, combined with a more severe and less severe recession.


Under each element, large banks would remain above minimum capital requirements in aggregate, with capital ratio declines of 2.7 percentage points and 1.1 percentage points, respectively.


Under the two trading book stresses, which included the failure of five large hedge funds under different market conditions, the largest and most complex banks are projected to lose between $70 billion and $85 billion.


The results demonstrated that these banks have material exposure to hedge funds but that they can withstand different types of trading book shocks.

SC Women in Leadership Announces 2024-2025 Board of Directors

SC Women in Leadership (SC WIL) announced its 2024-2025 board of directors which includes 12 members with diverse professional backgrounds who share a common commitment to gender equity in elected and appointed public office in South Carolina.


Sara Ballard, formerly chief operating officer of the organization, was also named executive director.


The 2024-2025 SC WIL Board of Directors are:

President, Barbara Rackes, Founder, SC WIL and community volunteer.

Vice President, Lauren Harper Pope, City Bright, LLC.

Treasurer, Kristen Jerome, Bauknight Pietras & Stormer, PA.

Secretary, Kim Bowman, K. Hope Creative.

At-Large, Rebecca (Becca) Barnett of Milliken & Company.

At-Large, Hope Blackley, Hope Consulting, LLC.

At-Large, Elizabeth Duda, Federal Reserve Bank of Richmond.

At-Large, Nikki Hallinan Hutchison, AARP.

At-Large, Sam Johnson, Civint.

At-Large, Allison Dean Love, Allison Dean Love Consulting, LLC.

At-Large, Katie McCravy, Thrive Management Consultants and Lively Charleston Properties.

At-Large, Seema Shrivastava-Patel, Columbia Health.


“Our board of directors and executive leadership represents women and supportive men from a wide spectrum of professions, political affiliations, experiences, ages, and backgrounds - as should the elected and appointed officials who represent the people of South Carolina,” said Rackes.


Rackes added, “As an organization, we are excited to model representation and channel our board and executive directors’ talent, expertise, and energy into furthering our mission of gender equity in South Carolina.”


SC WIL’s vision is for women to be represented at every level of leadership, including elected officials, appointed government boards and commissions, and as active volunteers and advocates in the community.

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