Posted on 12/26/2021 1:21:49 PM PST by blam
Supply chain issues aren’t just showing up for consumer staples, they’re also starting to rear their head in rental cars.
There has been a shortage in the rental car industry since earlier this year and while travelers are “encountering higher rates and few choices,” according to a new Wall Street Journal article, companies like Hertz are “struggling” to re-stock fleets after downsizing due to Covid.
For customers lucky enough to even find a car, many are being forced to downsize or book vehicles they didn’t originally intend.
At the same time, rental rates are skyrocketing. The daily rate is now $81, which is up 31% from a year prior, WSJ reported. Hasn’t someone told Hertz the “official” CPI number is just 6.7%?
This figure is up from about $46 per day, prior to the pandemic.
In winter destinations like Maui, Salt Lake City and Bozeman, Mont., rates are over $100 per day, WSJ reported.
The omicron variant has also caused some travelers to switch from flying to driving, further depleting supply of rental cars. One traveler who chose to drive to North Carolina from Chicago told the Journal: “It was overall a high-stress situation.”
The same traveler was limited to just two car choices, a Dodge muscle car and a Chevy Spark subcompact, and paid $725 for a 9 day trip.
“I couldn’t think too much about budget or anything like that because if we didn’t get it all figured out in a matter of hours, we were going to be out of luck,” she said.
Another potential traveler, 24 year old Cassie Clark from New York City, told the WSJ: “I’m not going to see my family for Christmas at all, all because of the rental car situation.”
Meanwhile, rental car companies, like everyone else, are citing the semiconductor shortage as a reason for lack of supply.
Avis Chief Executive Joseph Ferraro recently said that a large part of the company’s great prior quarter was due to higher prices. “The Americas booking patterns for the fourth quarter and holiday seasons appear robust and are currently outpacing 2019 levels,” he said on an earnings call.
The supply crunch partially comes as a result of names like Hertz downsizing their fleets after Covid. But rental-fleet utilization rates have risen recently. Avis’ fleet utilization was up to 71% from 50% in the first nine months of the year.
Henry Harteveldt, a travel industry analyst, concluded: “The car-rental situation will only get better if the car-manufacturing landscape improves. Until then, it’s going to be one of the bleakest times to be renting a car.”
I was in Florida and flew back Christmas Eve. If I hadn’t had a reservation for a rental car, I would have been hosed. Southwest seemed to not have any cancellations where I was flying to and from.
In May, this shortage made our decision- we drove fr TX to SC. Cost was less than rental car for 5 days. We were gone for 9 days.
How does “switching from flying to driving, further deplete the supply of rental cars”?
Maybe there are fewer cars at Location A, but those cars move to Location B (if one-way rentals). But there is no change in overall supply.
Even if cars are rented more time, that doesn’t change the supply.
This is another case of an economic illiterate author tasked with writing an economics paper.
Local right wing radio guy said his friend had to go by car to a city about 2 hours away from the airport. Only available cars were electric ones. Others had been taken.
He said “Is there any place I can re-charge because the range is too far for making it back?”
“The biggest parking garage in town has a row of chargers you could use.”
The new era.
Many used car dealerships also rent cars
It might be 4 or 5 years old but generally cheaper and easier to find.
Maybe people have to rent a car because their own broke down and the mechanic can’t get parts
Nothing new on car lots to buy
Only thing out there are overpriced used cars and >$3000 junkers
We rented a car earlier this year when we went to DC. Waited two hours for the rental at Reagan and it had just been returned and cleaned before they gave it to me. Was an older model with about 41k miles on it but it got us around.
Ubers/Lyfts are cheaper for a very large % of travelers flying into a city and usually only marginally higher if higher. I *usually* skip car rentals at this point, even before car rental prices went nuts, although I did get one for bourbon country tour earlier this year.
My SIL had that problem, hard to find a rental and the repair company said it will be awhile before they can get the parts. If the insurance company totals his car, he is SOL.
Maybe all those “Smash and Grab” events have placed a ton of cars in the shop for repairs, as well?
You may be correct, and all the shops are looking for techs so repairs may be slow.
That and parts availability.
The SlowJoe supply chain implosion is a BIG problem.
You bet! His boy, Buttplug has been a disaster for that job.
Someone wrecked my car and it took two days to get a rental
Sis bought a new 4Runner last year and keeps getting several calls and emails a week from the dealer and other 3rd partys trying to buy it back. Offering more than she paid for it
They can’t sell or rent one if they ain’t got one
“Only available cars were electric ones.”
that pretty much tells you everything you need to know about electric cars ... renters pretty much consider them the Yugos of the rental fleet ...
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