For the first time in a decade, fewer Utahns are expected to travel this Fourth of July weekend -- which traditionally marks the peak of the summer driving season.

More than 400,000 Utahns are expected to travel 50 miles or more this holiday, a drop of 0.8 percent from last year -- the first decline in Independence Day travel in a decade, and the second consecutive drop in holiday travel since Memorial Day.

"Less disposable cash and an overall increase in travel expenses have caused Utahns to postpone or downsize their holiday getaways," said Rolayne Fairclough, AAA Utah spokesperson. An average family of four can expect to pay around $600 over the holiday weekend.

In the Provo-Orem area, a gallon of regular unleaded gasoline rose to $4.02, up 16 cents from a month ago, and up 84 cents from a year ago. Statewide, gas prices climbed 18 cents to $4.09 from a month ago, and are up 94 cents from a year ago. Nationally, airfares are up 13 percent from a year ago, while rental car rates are up 12 percent, according to the AAA Utah report.

"But while Utahns are being cautious about their spending, many are not giving up their vacation plans," Fairclough said. "Many Utahns are still managing to take off for this upcoming holiday by carefully planning their trips and taking advantage of travel discounts offered to boost last-minute business."

More than 318,000 Utahns will drive this holiday weekend, a drop of 0.4 percent from last year, while more than 66,000 Utahns will fly, a 3.2 percent decline from last year. The remaining 16,000 Utahns are expected to travel by other modes of transportation.

Nationally, more than 40 million vacationers are expected to travel 50 miles or more from home this four-day weekend, a 1.3 percent drop from a year ago, according to the AAA report.¬ 

"Clearly, gas prices have taken a toll on the entire spectrum of the travel industry," Fairclough said. "People are still taking a break this holiday, but vacations are increasingly viewed as luxuries. To scale back on spending, they may try to camp more, shorten their holidays, not stay at expensive lodges or eat at nice restaurants."

"It'll be interesting to see what happens over Labor Day, which is the last big summer holiday travel spurt before people return to work or school," she said.

Kelly Matthews, executive vice president and senior economist with Wells Fargo, said the AAA report clearly illustrates that $4-a-gallon gasoline is having a disruptive effect on consumer confidence and their ability to spend.

It's going to be a pretty soft summer, Matthews said. "But at least I don't see the likelihood of a wage-price inflation spiral like what we had in the '70s, because many companies aren't raising wages (in an era of downsizing and outsourcing). In fact, many are getting hit in their profit margins because they have a hard time passing costs on to consumers."

"The next thing we need to worry about is whether this will filter out to other aspects of the economy. Just because we're staying closer to home this holiday doesn't mean we're spending more. In fact, we may even spend significantly less than in the past because of higher gasoline costs," he said.

Reflecting the economic slowdown, higher fuel costs and declining travel, hotel occupancies in Utah County have been softening for the past five months, dropping 4.1 percent from the same period a year ago to 64.5 percent.

"This is the first time in three to four years that we've seen this drastic a drop," said Joel Racker, president and chief executive of the Utah Valley Convention and Visitors Bureau. 

But the Fourth of July celebration is bringing business to Utah County hotels, many of which are reporting full occupancy for the holiday weekend, he said. "Stadium of Fire brings 54,000 people to town, plus 250,000 more people for the Independence Day parade. Also from Wednesday through Sunday, there's additional traffic for the USA Wrestling Kids national championship tournament at UVSC,"

Average revenue per available room, or hotel revenues, remained mostly flat in Utah County, while hotel rates jumped 7.1 percent to $88.2 for the first five months of the year from a year ago.

Promotions like the Utah County Adventure passport, which offers discounts at participating local retailers and restaurants, have helped generate more inquiries from people wanting to find out what they can do in the area for the holiday.

"A lot fewer people are taking big road trips, but we've received more calls from people since the adventure passport hit mailboxes on June 18," Racker said. "Interest in exploring one's own backyard is pretty strong this year. The hotel industry is seeing the impact of higher gas prices, and is concerned about how their occupancies have dropped."

Fairclough agreed. "High gas prices have strong ramifications. We're potentially looking at fewer room tax revenues from hotels, sales tax revenues from retailers and restaurants."