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

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 $4.00 per gallon on that date.

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

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, who runs the four-room bed and breakfast inn. South Dakota has a “warmth and charm people just love,” she said.

The Hitching Horse Inn has routinely been full this year and has had to turn some people away, Schuetzle said. “It has been really looking up … and I’m probably ahead of last year. So I’m very, very pleased with that.”

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

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. Tax revenue that tourism provides saves South Dakotan households $980 per year in taxes, the department said.

“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. It’s not just valuable for the state of South Dakota, these efforts impact communities and families throughout our state,” 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.

“We may see shorter trips, less money being spent on food, beverage, souvenirs, etc. [But] we remain confident that our family-friendly, affordable state, featuring world-class outdoor adventure, will continue to draw visitors to South Dakota,” 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. “South Dakota and Sioux Falls offer what people are looking for — the great outdoors, activities, events, culture, sports, our state kind of has it all.”

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.

Gas prices were so volatile that the Johnsons paid $3.80 a gallon when they left Wisconsin two weeks earlier to make the 2,600-mile round trip journey. 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, who felt compelled to point out that he is not movie actor Dwayne Johnson, The Rock.

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.

The couple considered saving money by driving to Utah in their Toyota, which gets more than 20 miles per gallon, but took their gas-guzzling Chevy Silverado (14 mpg) because they wanted to bring a bed and other goods to their daughter and needed the cargo space.

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.

“What are you going to do?” Johnson said. “If you want to travel, you have to pay to do it.”

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.

Schmidt also highlighted that travelers within the state are just as important as those who come from far and wide.

“We want those long-distance travelers coming through, but equally as important are people in our region,” she said.
“We’re a weekend destination, and that is a lot of what helped us pull through COVID.”

President Biden placed a ban on imports of Russian crude oil in response to Russian President Vladimir Putin’s invasion of Ukraine in February. Domestic oil producers are also ramping production back up after the events of 2020 dropped the demand for oil. In a White House briefing on March 31, Biden announced an unprecedented release of federal crude oil reserves at a rate of 1 million barrels per day for the next six months to help smooth out the market until domestic producers can keep up with the demand. However, across the U.S., drivers are still paying more per gallon than ever before.

Gas prices across the Great Plains

Here are the average prices for a gallon of regular unleaded gas by state on May 17, 2022.

State Price per gallon

Montana $4.30

Wyoming $4.26

South Dakota $4.17

North Dakota $4.13

Iowa $4.12

Nebraska $4.11

Minnesota $4.11

Source: American Automobile Association