High prices and no inventory as rental car operators face vehicle shortages

High prices and no inventory as rental car operators face vehicle shortages

Canadians looking to move away in the coming months may struggle to navigate, as rental car operators for the second summer in a row face severe inventory shortages.

At many car rental locations across Canada, particularly at airports, rental cars were completely sold out for most of July and August. And on availability sites, rates can start at $150 per day or more.

Leslie Mitchell is one of the many travelers who encounter sticker shock while searching for a rental car. She plans to fly from Calgary to Halifax in August, and said she was surprised by the high prices for rental cars, without any guarantee on model or size.

“I was totally surprised and took it for granted,” she told CTV News Calgary. “It’s usually one of the last things I book.”

In the early months of the pandemic, rental car operators reduced their inventory, expecting demand to fall. But when travel demand returned in the summer of 2021, rental car operators were unable to get enough cars in time due to a global shortage of chips that halted production at car factories.

Data from Statistics Canada showed that in British Columbia, the average car rental price jumped 31.9 percent in 2021, even though tourism was still nearly 30 percent below pre-pandemic levels.

Before the pandemic, British Columbia’s car rental industry had more than 35,000 vehicles during its peak season in the second and third quarters, according to StatCan data.

But the county’s rental car fleet dwindled to just 18,636 vehicles in the first quarter of 2021. With reasons to travel, the industry had only 24,457 vehicles by the third quarter of 2021—more than 10,000 vehicles below pre-pandemic levels.

Rental car operators now have more inventory than a year ago, but this is offset by an increase in pent-up demand amid COVID-19 restrictions, says Craig Hirota, vice president of government relations and member services at Associated Canadian Car Rental Operators.

“Sure, it looks like demand is coming back stronger in the spring and summer than it was last year…but our industry also got some access to some vehicles in the last year,” he told CTVNews.ca on Tuesday. The situation will be similar. “

And while the car rental shortage has affected operators and travelers across Canada, Hirota says the problems are “magnifying” in remote parts of the country where inventory is hard to convert, such as Newfoundland.

“Atlantic Canada has a very short season, so the demand is very high,” Hirota said. “It can be difficult to get on and off vehicles from some of the islands there.” “It’s probably more compact in Atlantic Canada and in some parts of British Columbia and probably just mountain communities in Alberta because it can be a little more difficult to move vehicles into those areas.”

For travelers booking a rental car reservation, Hirota recommends booking as soon as possible and checking as many car rental sites as possible, including those outside the airport.

“The farther you can plan and book, the better,” he said. “I would recommend just continuing to search on an almost daily basis in your destination area.” “I think the consumer certainly should be more diligent in their search for their cars, but they will find them.”

As for the rental car operators, Hirota says they have had to get creative with revamping their fleets. Some were buying one or two units at a time from local auto dealerships while others obtained light-use vehicles from wholesale auctions.

“They are doing everything they can to try to get as many vehicles as possible, which would be the best way to meet demand,” Hirota said. “We’re always in touch with our manufacturing partners to let them know we’ll take whatever they have as well.”

With files from CTV News Calgary.

2022-06-02 18:48:05

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