Apocalypse In The Car Rental Market

The apocalypse of car rental begins!  

Remember the good old days before the COVID-19 pandemic, when you could plan a trip anywhere and not think about renting a car beforehand?

Remember coming to the rental desk at the airport and taking a free car, or while sitting at the gate, in a hurry looking through hot offers in order to find an inexpensive car and pay for it at the very last moment while getting on the plane? These days are gone...  

Welcome to the reality of  2021 - there is no such thing anymore. Today, renting an average car in traditional US rental cars can cost up to $700 per day, because the US travel market has revived, but you can't say the same about rental cars.  

Alexander Pershikov, the founder of the international affordable car rental marketplace GetRentacar.com, an analogue of AirBnB for car rental, spoke about these changes in the market in 2021.  

The lowest price a customer could find for a weekend trip to Arizona was $700 per day. At the same time, the rental price of the Porsche Panamera in Dubai dropped from $700 to $400, and the price of the new Lamborghini Huracan dropped from $1500 to $800 per day. - says Alexander Pershikov.  

But even such masters of the deals as Rentalcars, AutoSlash are not able to make miracles today. The United States is experiencing a severe shortage of rental cars as a result of the pandemic that has hit the world.    

It all started with the outbreak of the Covid epidemic a year ago, and rental companies were forced to go into survival mode and sold as many cars as they could. On top of that, big companies like Hertz (which also owns Dollar and Thrifty) and Advantage Rent A Car filed for bankruptcy in 2020, Europcar went into restructuring.   

People's car-sharing will help us! 

Today the only alternative to traditional car rentals is people's car sharing. Maybe this is the exact thing that will save your trip and you will find an affordable car for an affordable price. It is important to understand that in popular car-sharing, supply will reflect demand, and today demand is significantly higher than supply. 

How it all started?

Until the end of 2020, this was not a problem because the world was staying at home, the demand for car rental was very low, so the car rental companies kept their car fleet at a very low level. But with a record number of vaccinated people and a resurgence of travel, the industry was unable to meet demand in 2021 - and all of this made it really hard for travelers because of high prices and lack of inventory. In addition to the factors of recovery, a huge impact of funds on the world economy stimulates and will continue to stimulate the demand for travel.  

For example, on one holiday weekend in the United States, entire cities of private cars were sold - Tampa, Orlando, Denver. So if you didn't book a car a couple of weeks in advance, you didn't have it at all. 

Then it gets worse!  

It has become a random phenomenon and now is turning into a trend of the season.

Several factors are making all of this complicated: Americans make record road trips, they drive instead of flying, and rent cars instead of taxis and Uber. Also, people are often making trips around the country, including places like San Juan, Puerto Rico, where there are also big inventory problems. Another thing that really causes demand is the fact that all of these people who might have gone abroad at other times simply cannot go there due to travel restrictions. So all Americans today are staying at home and planning trips to the United States, which also puts even more pressure on the market.  

Now the market is facing another challenge, it is expensive for car rental companies to expand their car fleet today due to the lack of semiconductors in the factories of car manufacturers, which delays the production of new cars. Before, car manufacturers used to sell cars to rental companies up to 40% lower prices. But they don't do it today because they can sell them without a discount!  

How travelling is going to be?  

So what does a traveler have to do? My advice is to book as early as possible. Check car rental prices in advance so that your car rental price does not match the presidential room at the Ritz Hotel. Maybe it is the availability of affordable transport that will determine your travel destination in 2021. With the opening of international air travel, you will not be faced with a lack of airplanes or a lack of hotels - they have not gone anywhere from the industry and are very much waiting for you with good prices. What you will be faced with is the lack of transport for your safe movement on the ground at affordable prices.  

The situation in Russia and Europe

Today, the United States has already faced the problem of lack of inventory in car rentals. Europe has yet to face it. While we are happy to see the trend for the opening of tourist markets and the current volume of tourists did not reveal any difficulties in the collapsed infrastructure of the tourism business. The opening of countries such as China, Great Britain, the USA, and Germany will lead to an inevitable increase in the solvent growth of tourist flow to Europe, which will instantly reveal difficulties with the operation of the tourism market, especially in countries where lockdowns have been long and have caused significant damage to small and medium businesses. In Russia, things are more conservative, this is due to the fact that massive tourist demand has been postponed for the summer, but although already in the New Year we saw the increase in the prices of car rental in Sochi and Vladikavkaz.