Rental Cars Shortage & High prices Worldwide
Rental Cars Shortage & High prices
2021 was a very challenging year for the Car Hire industry worldwide. Rental Car companies worldwide had a cocktail of problems to deal with, which led to tight availability and high prices.
At Rolandos, we are delighted that we were able to offer top value-for-money services in such an intense summer season. Our recent online reviews reflect the quality of service we provided our customers during the pandemic.
Roadtripping is an amazing experience. Especially when sightseeing during your vacation, hiring a car is the ideal, value-for-money solution. This practice was not exactly the case in 2021, when car rental prices skyrocketed, dragging the entire transport industry into a price rally.
In this article, we will answer the questions of many travelers who, in 2021, found it really expensive or even impossible to hire a car during their vacation.
Rental Car Shortage?
A shortage of rental cars worldwide is a fact. To be precise, the lack of new vehicles on the market in general, due to the problems faced by the automotive industry1, is a reality.
Moreover, rental companies faced a dramatic drop in demand in 2020 when covid banned travel. The companies had to meet their financial needs, and they did this by selling cars. In this way, they reduced their fleet. Specifically in Corfu, this practice reduced the available fleet of rental companies by at least 2.000 vehicles, which turned our four-wheeled friends into an endangered species2.
Finally, our recent experience has shown that due to uncertainty and last-minute bookings, travelers found themselves in tourist destinations they had never visited. This new trend increased the need for exploration and, as a result, the demand for rental vehicles.
What about Car hire prices?
It is a law. In the free market, demand and supply3 ultimately shape the price of a product or service. This economic theory is applied to car hire services as well.
In our case, more than the declining car fleet worldwide was insufficient to meet demand, resulting in rising prices.
Would it make sense for a company to keep prices low in this stressful environment? The audience they can serve is limited, the benefit would be for a few, and therefore the profit of the audience would be negligible. Finally, in practice, travelers cut the length of their car rental as it was very expensive. This resulted in more people getting served in proportion to the number of vehicles available.
Is it over?
The auto industry is in trouble. The chip shortage is causing big problems for the Automakers’ supplies, and it is foreseen to stabilise in the second half of 2022 and to hope for recovery within 2023 4
These problems are passed on to the rental companies and bother travelers. The truth is that the term last minute offers almost does not exist, and the uncertainty makes people reluctant to give an early deposit for their vacation. 2022 will be another interesting tourist season, and we look forward to its challenges.
At Rolandos we are already supplied with brand-new models by ordering long in advance, and availability is updated on our website. The tourism industry is recovering year by year, and tourist businesses are adapting to the new reality. We encourage you to book your holiday for the coming summer and look forward to being at your service.
4. Cnet, 10/21