Rental cars can still be ‘quite expensive’ this holiday season as the shortage continues to send prices higher than usual

The logo of the car rental company Hertz is seen at a branch in Zurich, Switzerland on November 17, 2020. REUTERS / Arnd Wiegmann

  • The rental car shortage that drove prices up to $ 700 a day is now easing.

  • But travelers looking to hire a car for their winter vacation can still see high prices.

  • Factors such as the current shortage of chips still hamper the ability of car rental companies to renew their fleets.

  • See more stories on the Insider business page.

The summer rental car crisis that drove tourists to rent vehicles for $ 700 a day has eased, but car rental problems could be back by the winter vacation season.

From late spring to summer, the rental car shortage caused by a “perfect storm” of shrinking fleets, shortages of computer chips and soaring demand drove prices up. daily rental rates to extreme heights, prompting some travelers to rent U-Haul vans instead of cars.

At the time, analysts had predicted that car rental companies might have a bit of “breathing” shortages by September, when travel typically slows down. And while travel – and therefore rental car prices – has predictably eased following the summer travel boom, the rental car shortage is here to continue for another year.

The computer chip shortage plaguing automakers could persist until the end of 2022, preventing rental car companies from quickly replenishing their depleted fleets after some had to sell vehicles to save money during COVID -19.

To combat this, car rental companies buy used cars (often at auctions), hold vehicles longer than usual, and redistribute fleets from places once dominated by business travelers – like Baltimore. , Milwaukee and Kansas City – to leisure destinations like the “sunbelt markets,” Chris Woronka, senior hospitality and leisure analyst at Deutsche Bank, told Insider.

Despite these efforts, car rental companies are still operating with less supply than usual for this time of year, and Woronka predicts that these companies may not have a full inventory until 2023, he said. told Hannah Sampson for the Washington Post.

“The supply and demand issues are still real,” Matt Clarke, senior vice president of marketing for travel research platform Kayak, told Insider, adding rental car prices are still 75% higher than 2019 prices.

Fortunately, travel levels generally decline at this time of year. And as a result, the average car rental price is now lower than the high costs we were seeing throughout the summer.

But ignore this good news if you are considering leasing a vehicle for the winter vacation.

Hertz predicts that “demand will be strong during the holiday season and throughout the year, particularly in popular tourist destinations,” a spokesperson told Insider in an email statement, noting that the company is always trying to develop its fleet. And according to data from Kayak, online searches for rental cars before the holiday season are already up 230% from 2019.

Demand for vehicles typically increases during Thanksgiving and the last half of December through the first week of January. But Woronka predicts that car rental companies won’t get their full inventory back by the end of the year.

As a result, rental car prices this holiday season will still be “a bit high compared to 2019 levels,” he said. “There will always be more people during peak periods who are willing to pay higher prices.”

But luckily for travelers, Woronka says those prices probably won’t be as high as they were during the summer, although Clarke predicts rental cars will still be “quite expensive.”

To avoid being charged on a rental car, Clarke recommends reserving a rental car as soon as possible. Some travelers have also started using an alternative to the traditional car rental company: Turo, which functions as an Airbnb for rental cars.

Read the original article on Business Insider

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *