Why are car rental rates so high?
It is a fact, that car rental rates have been going up in Florida and other key tourist destinations. In some instance these rates have more than doubled the prices we saw prior to the Pandemic.
The increase can be attributed to the Pandemic and the actions that car rental companies were forced to take to ensure their future.
The world began shutting down in March 2020, right at one of the peaks for the travel industry in Florida and other popular destinations. At the same time, companies switched their employee’s workplace and allow them to work from home. And, as the months and the pandemic worsen, travel came to a halt and the world was held back at their homes for many months.
Car Rental Companies found themselves fleet up for a peak that came to a halt. They were forced to take immediate action to protect themselves and increase the chances to survive the pandemic. They reduced personnel, closed offices permanently or temporarily, and sold as many vehicles as possible to reduce fixed cost.
It was clear that many operating expenses outside of their fleet and employees could not be adjusted and they sustained substantial loses during the pandemic month.
Now, we find car rental companies with skeleton crews and a reduced number of vehicles in their fleet. It is reported that fleet levels could be as low a 40% of what was available prior to the pandemic.
As we enter the usual peak period in Florida and domestic travel increases, car rental companies are still having to meet their minimal operational expenses and at the same time are finding themselves not able to supply the entire demand for car rental. Therefore, it is only logical that they increase the cost of car rental, as much as possible to increase their revenue as much as possible to meet their operational needs.
Many will ask, why not buy more cars? as they have done in the past.
Well, the job of a Fleet Manager is more like a ready a crystal ball… It takes a minimum of three months to get cars once they are order from the manufactures and they must forecast the levels of business that will be coming to maximize their utilization.
Currently, we have not clear timeline of recovery for the Travel Industry and/or business travel. Therefore, we see these prices to continue at these levels for a much longer period.
We recommend travelers to book as early as possible to ensure availability. Especially, for especial vehicles las minivans, SUV, or convertibles.