Increases of over 300 percent are being reported.
We all know how much fun rental cars can be to drive, even if you're talking about something as average as a Mazda 3, but you can hire cool cars too, including stuff like a Chevy Camaro. Mix a rental car with a spring break vacation, and you've got a recipe for fun, but some holidaymakers may find their joy cut in half.
The Points Guy is reporting that there's a shortage of rental cars available, and this shortage is a result of the pandemic. As a result, rental car rates are now soaring, with some Arizona, Hawaii, and Florida agencies charging as much as $300 per day for "economy"-sized cars.
The knock-on effect for the tourism industry will be notable, as many "travelers are canceling entire vacations because they either can't afford a car rental or simply can't find an available car at any price", says Jonathan Weinberg of Autoslash. The average increase in rental prices across the country is a whopping 30 percent, but some places have seen increases of an incredible 300 percent. The problem is supply being outweighed by demand, because while some like Hertz have had to file for bankruptcy, others chose instead to sell off part of their fleets to stay afloat during the worst of the pandemic.
The other problem is poor foresight, since many rental agencies did not expect travel restrictions to be eased as much as they have as soon as they have. As people flock to vacation destinations, these areas are now unable to keep up with demand. With more demand than supply, rental agencies can ask whatever prices they want, and with so many of them having closed for so long last year, the need to make up for at least some of those losses is paramount to the survival of these businesses. Deutsche Bank analyst Chris Woronka says that "travel providers are testing the waters", and if people continue to rent vehicles at high prices, the situation likely won't improve for some time. Maybe that vacation can wait another year.