1657011535 Why Rental Cars Are So Expensive and So Scarce This

Why Rental Cars Are So Expensive and So Scarce This Summer

A car rental office at Miami International Airport (Florida), October 25, 2021. A car rental at Miami International Airport (Florida), October 25, 2021. JOE RAEDLE / AFP

It’s the year or never to discover the public transport of Crete, Corsica and the Balearic Islands. High in demand this summer, these island destinations have been hardest hit by a global rental car shortage that has pushed prices to very high levels.

“Unheard of,” says Pierre Feisthauer, head of development at Carigami, a specialized price comparator. For bookings in May and June, the average price in France was 494 euros per week in view of the summer holidays: twice as much as in 2019. “We are in a spiral that has been going on since May 2021 and has only gotten worse. We don’t see any reason to be positive about the coming year,” says Feisthauer. In the absence of reasonable offers and prices, reservations on Carigami have halved compared to 2019.

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For travel agencies that market tailor-made tours, the price of the rental car has become an important selection criterion. “This determines whether the destination is financially viable,” emphasizes Myriam Tord, consultant at the agency Versailles Voyages. We try to suggest alternatives, such as renting a car in Malta, where the transport network is very good, or renting a car somewhere other than at the airport. In other countries where the car is almost indispensable – in North America, Iceland, even Italy – there is no other solution than renting a top-of-the-line car or doing without yourself. The shortage is hitting the islands particularly hard, but no destination escapes the phenomenon.

From fleet resale to the semiconductor crisis

You have to go back to March 2020 to understand the current situation. In the first few months of the Covid-19 pandemic, rental companies have massively reduced their inventories of cars that are costly to decommission. After the summer of 2020, without the slightest perspective on the development of the pandemic and with limited funds, they place minimal orders for the following year. However, demand will increase sharply in spring and will lead to the first difficulties in summer 2021.

At the same time, the shortage of semiconductors is aggravating on the part of manufacturers, these chips are mainly made in Asia, where the slightest outbreak of an epidemic leads to the closure of factories. The war in Ukraine, which began on February 24, complicates the situation as the country is home to many subcontractors and the conflict is raising tensions over key metals, palladium and nickel. In the spring, renewed containment in China’s Shanghai region, a hub for global container ships, further disrupted the construction companies’ supply chain.

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