South Dakota’s top tourism official is pitching high gasoline prices not as a threat but as a potential advantage for a state that markets itself as “the ultimate road trip destination.” In an interview with South Dakota News Watch, Tourism Secretary Jim Hagen argued that when fuel costs rise, travelers often skip long-haul flights and instead choose regional driving vacations — a pattern that has historically lifted South Dakota’s numbers even when other states struggled.
“They want to travel regionally, and they’re opting for that over more expensive, long-haul air travel trips or more expensive, longer road trips,” Hagen said. “They’re going to travel to destinations that are closer to home. And the silver lining is that South Dakota is seen as a regional-drive market and because we really are the ultimate road trip destination.”
The logic was on display during the last week of April, when Ryan and Alexis Foley loaded their two daughters and their 15-year-old dog, Doc Holliday, into the family vehicle in Green Bay, Wisconsin, and drove 12 hours to the Black Hills. The Foleys normally fly to a beach each spring, but the need to bring the dog and the region’s dense concentration of sights tipped the decision toward a driving trip.
“It’s our family trip, so if we needed to pay a little more for gas, it’s no big deal,” Ryan Foley said after a scenic helicopter flight near Keystone. He called the trip affordable and said the family left with “memories we’re going to have forever.”
Hagen said national surveys show that roughly 90% of Americans plan to travel this summer despite increased costs, and many are considering driving rather than flying. That sentiment, combined with the 250th anniversary of the signing of the Declaration of Independence, has tourism promoters across the state optimistic.
Rapid City will host the “Real America Birthday Bash” downtown July 1-4, featuring a U.S. Air Force Academy band performance, drone shows, a parade, and fireworks. Mount Rushmore will hold its own fireworks display on July 3. Gov. Larry Rhoden has invited President Donald Trump to attend, though no official announcement has been made. Bria Dillavou, who owns two clothing stores in Keystone, said vendors nationwide are offering more patriotic merchandise this year, and she has ordered her typical inventory despite economic uncertainty.
Beyond the Black Hills, Sioux Falls is pitching itself as a shopping and culinary destination, with events including the Rock the Country Music Festival in late June and the Sioux Falls Airshow in July. Hunting, fishing, camping, and outdoor recreation remain major draws in the eastern part of the state. The 86th Sturgis Motorcycle Rally, scheduled for Aug. 7-16, is expected to deliver its usual surge of visitors.
Travel South Dakota, the agency Hagen leads, spent most of its roughly $13 million advertising budget on neighboring states and on proven markets such as Chicago. Visits from Canada have declined for a second straight year, which officials attribute to the ongoing U.S.-Canada trade war and President Trump’s repeated remarks about annexation.
The tourism industry generated 4.7% of South Dakota’s total economy in 2025, with 15 million visitors spending an estimated $5.2 billion — a 1.1% increase over 2024. The agency says tourism supported more than 59,000 jobs and produced $406 million in state sales tax revenue, or 16.5% of all collections. Without those dollars, each South Dakota household would have paid an additional $1,121 in taxes last year, the agency estimates.
Still, some local leaders are watching the economy warily. Teri Schmidt, CEO of Experience Sioux Falls, said the early months of 2026 have been flat to only slightly up in visitation and spending, putting pressure on businesses to deliver a strong summer. “The things that worry us are gas prices, airline prices and the overall economic condition of the country,” Schmidt said. “If gas goes to 5 bucks a gallon, we don’t know how people are going to respond and we could be looking at a much different situation.” She said tightening budgets could cause some travelers to shorten trips or spend less, though website traffic for Sioux Falls has been rising.
Michelle Thomson, CEO of the Black Hills & Badlands Tourism Association, said the high cost of living could push more tourists into the spring and fall shoulder seasons, when they expect lower prices. Travelers are also waiting longer to book, a pattern that adds stress for operators accustomed to seeing reservations far in advance. But the combination of the Sturgis rally and the nation’s semiquincentennial, she said, gives the region a strong floor.
“People are anticipating spending more, but they want to have those experiences and are willing to pay a little bit more for it,” Thomson said.