Rental Cars Shortage & High prices
2021 was a very challenging year for the Car Hire industry worldwide. Rental Car companies all over the world had a cocktail of problems to deal with, which lead 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. This is reflected in the recent reviews we received online.
Roadtripping is an amazing experience. Especially when sightseeing during your vacation, hiring a car is the ideal, value-for-money solution. This 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 try to answer 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 cars 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 travel was banned due to covid. Their financial needs had to be met and this was done with car sales. In this way, the fleets were reduced. Specifically in Corfu, the available fleet of rental companies was reduced by at least 2.000 vehicles, a fact that 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 that they had never visited before. This increased the need for exploration and the demand for rental vehicles.
What about Car hire prices?
It is a law. In the free market, the price of a product or service is ultimately shaped by two factors: Demand and supply3. This economic theory is applied in the car hire services as well.
In our case, the declining car fleet worldwide was not enough 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 being able to get served in proportion to the number of vehicles available.
Is it over?
The auto industry is in trouble. The chip sortage is causing big problems on the Automakers supplies, and it is forseen to stabilise in the second half of 2022 and hoping for recovery within 2023 4
These problems are passed on to the rental companies with the problems mentioned above bothering the 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 is going to be another interesting tourist season, and we look forward to the challenges it will bring.
At Rolandos we are already supplied with brand new models by ordering long time in advance, and availability is updated on our website. Tourism industry is recovering year by year and tourist businesses are adapted to the new reality. We encourage you to book your holiday for the coming summer and look forward being at your service.