As a result of the pandemic, rental car companies across the United States parked their cars in unused lots at ballparks, and cars were rented for a fraction of their normal price — or sold as used cars. The industry sold off more than a half a million cars, about a third of its combined fleets, just to generate cash it needed to survive the crisis.
The rejuvenation of tourism thus sent car rental prices soaring. A search of car rental sites in March showed a Kia Rio, a sub-compact car, going for $300 a day in Orlando.
Before the COVID-19 pandemic, the average car rental in Hawaii carried a cost of about $50 daily. Now, some vehicles are renting at over $500 a day, Jonathan Weinberg, the founder and CEO of AutoSlash, told Insider in April. Some daily rental prices have even hit highs of $700 a day, which is over double 2019's prices, Chris Woronka, a senior hotel-and-leisure analyst at Deutsche Bank, told Insider in April.
Simply put, the nation’s largest car rental corporations sold a ton of cars last year to cushion the financial blows amid widespread COVID-19 travel restrictions, and now they can’t buy sufficient replacements largely due to car manufacturing delays.
Numerous small local rental car firms exist in the state, while a couple of expanding global firms — China-based Vesaway and Germany-based Sixt — opened on Oahu in recent years. Sixt also has a location on Maui.
Yet these smaller players in the market, according to Taylor, aren’t big enough to significantly ease the existing shortage, even if they are expanding or drawing more business. Instead, Taylor said major relief largely depends on the three industry giants, which are stuck in a quandary.
These firms — Enterprise Holdings, Hertz Corp. and Avis Budget Group — all have arrangements with manufacturers to continually replenish their supply of new cars that they use for relatively short periods before selling.
All three companies sold much of their fleets last year to raise cash and haven’t sufficiently replenished their inventory as travel demand rebounded this year.
One big reason for this is a shortage of semiconductors holding back new car production. Also, car rental companies can’t easily move inventory between nearby cities or states to cure a shortage in Hawaii.
No cars from the Enterprise brands were available at Maui’s Kahului Airport for the last week of July, according to a recent search.
At Avis Budget, a spokesperson declined to comment on Hawaii operations.
Hertz, which owns Dollar and Thrifty brands, filed bankruptcy last year but has continued operations and arranged $4 billion in financing to rebuild its fleet after cuts last year.
At Maui’s airport, the company recently did have midsize cars available to rent during the last week of July at $229 a day.
Seems to me that anyone could hire an Uber driver for less, each day.
$722 a day!? Holy Omnissiah! O_O
ReplyDeleteI just rented a U-Haul pu truck in NH. Even with full insurance it was $300 a week cheaper that and economy rental car.
ReplyDeleteGlad you found a cheaper way! Thanks for the confirmation that the rental car companies are ridiculously expensive right now
DeleteYeah. but you have to pay like 70 cents a mile and a dollar a mile in some places. That adds up if you have long distance driving. In the thousands of dollars.
ReplyDeleteOn the islands, which aren't very big, you won't put on many miles unless you just lap it day after day. Oahu is 44 miles long and 30 miles across.
DeleteMaui is 48 miles long and 26 miles wide
Kauai is 25 miles wide and 33 miles long
Very interesting result of Economics and supply and demand. One way to beat this is to not travel to some place where you will need a rental vehicle. Do that next year. Thanks for this information.
ReplyDelete