Car rental costs are skyrocketing – if you can even find a vehicle
Heading to Maui for a vacation delayed by the pandemic? Better to make sure you book a rental car well in advance – if you can find one.
Travelers arriving at Kahului Airport in Hawaii without a reservation for an April weekend will find Hertz, Avis, Enterprise and other major car rental companies completely exhausted. If a vehicle is available from local competitors, it could run several times faster than normal – with some tourists reporting car rental price over $ 700 per day, or $ 1,000 for a convertible.
The situation is repeated in popular destinations across the country and in many places abroad. Even in less glamorous destinations, like Detroit, it can be difficult to find the normal choice of vehicles, as the prices of the most basic models have skyrocketed. At the Detroit Metro Airport, the current weekend rate for a Chevrolet Spark microcar to Hertz is $ 104.30 per day, nearly three times the price before the pandemic.
“We are seeing an increase in demand for leisure travel in the industry’s vacation destinations,” Lauren Luster, spokesperson for Hertz, told NBC News in a statement. However, “due to increased demand in some cities and regions and smaller fleets in the rental car industry, availability may be more limited.”
Sara Miller, spokesperson for Enterprise Holdings, said in a statement the company “is leveraging our extensive network of neighborhood and airport sites to move vehicles where possible to meet peak demand. regional “.
More than a year after the pandemic was locked out, many Americans are eager to get back on the road. But, while travel has increased, that’s not the only reason there’s a sudden shortage of rental cars.
When the closures went into effect, business travel dried up and Hertz’s revenues have plunged. The company filed for bankruptcy last May then moved to sell much of its rental fleet. In the last quarter of 2020, the company said it had around 300,000 vehicles in its fleet, down 42% from a year earlier.
As new car sales plummeted last spring, the used car market turned red, meaning rental companies that sell their vehicles could earn a premium. Avis said it “profitably divested” 250,000 of its own vehicles in 2020.
With continued low demand, rental companies reduced orders for replacement vehicles. In the third quarter, fleets overall accounted for just 10% of new vehicle sales in the United States, up from 15% traditionally, according to Tyson Jominy, vice president of analysis for JD Power, and the corporations. rentals are responsible for much of this decline.
In the face of big cancellations from companies like Hertz, Avis and Enterprise, US automakers have shifted production capacity to retail, Jominy said. And now they are in no rush to go back.
“Rental fleets are generally low profit,” Jominy said. Manufacturers “won’t send vehicles on the rental side when (they) can make a lot more money through their retail channels,” he added.
Travelers are advised to book their rental cars as early as possible.