More demand than supply: rental cars are missing for the summer

The rental car sector faces a summer with a shortage of vehicles and with more demand than supply, what is raising prices while companies manage to find strategies that allow them to expand their portfolio.

From buying used vehicles -even imported ones- to using cars with a significantly higher number of kilometers than usual, including launching a motorcycle rental service on the islands to compensate for the lack of a car fleet; companies are opening up to all kinds of solutions to face the summer period.

“There is no other option but to rent cars with more kilometers than before. In a normal situation, they would have been sold at the dealership, but since there are not enough to cover the demand…”, he points out to EFE the worker of one of the main companies in the sector, which confirms that prices are “shot”.

“We are renting normal vehicles at 200 euros a day, crazy. In summer prices usually go up, but this year is being incredible,” emphasizes.

Between May and September, “more than 60% of the global turnover” of the sector is concentrated, the president of the National Business Federation of Vehicle Rentals with and without a driver (Feneval) also explained in statements to Efe. Juan Luis Barahona, who specifies that the “peak demand” means that for some companies the percentage may even exceed 70%.

“It is going to be a summer with a significant lack of cars, and that is going to affect in the tourist experience. alerts Barahona, who recalls that cars were already missing in 2021 despite the fact that then the recovery of tourism was much more tenuous than in 2022.

In this sense, he stresses, “we have much more demand than last year and however we have fewer cars”. According to their data, “rent a car” companies in Spain usually offer about 820,000 vehicles for rent normally, while this summer the figure will be around half a million (40% less).

According to a report prepared by the consulting firm DBK, in 2021 the sector moved 1,150 million euros -still far from the 1,780 it billed before the pandemic- and was made up of more than 2,000 companies, of which 93% were SMEs, although the top five operators accounted for 56% of the business.

DIFFICULTIES IN PROVIDING SERVICES TO TOURISTS

The car rental business is directly related to tourism, so covid-19 shook the foundations of the business and put him against the ropes; in fact, a global giant like Hertz ended up in bankruptcy proceedings, for example.

“The companies had to sell the cars to survive,” explains Barahona, who specifies, however, that it is customary to part with part of the fleet during the year to adjust to demand.

The return of tourists has coincided with the semiconductor crisis and the problems of vehicle manufacturers to produce, which has led to significant delays in delivering new cars to customers.

According to the employer, companies in the sector are receiving fewer new vehicles because manufacturers are prioritizing serving individuals.

“This has caught us with the companies with smaller fleets because they sold during the pandemic. If you add the rise in costs, the increase in workshop prices, the price of new cars has also risen…”, summarizes Barahona, who speaks of a difficult year despite the improvement in tourism.

It also warns that the experience of foreign visitors in Spain may worsen. “It happens a lot on the islands, for example: If you want to get to know them and you can’t rent, you end up having to resort to public transport, which is overwhelmed. The rental car gives you freedom to move, which also helps distribute wealth among one town and another.

IN EXPANSION

“One of the hot spots is going to be the Balearic Islands” due to the lack of cars, confirms to Efe the director of Business Development of Record Go, Marta Martínez, who, however, emphasizes that it is a “global and not exclusive to Spain” problem.

The company -one of the most important on a national scale, with a presence in most airports and train stations in the country- is “doing everything to get a fleet”, and as a novelty this year it has launched a motorcycle rental service as a way to “diversify”.

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In their case, they opted for a “conservative” position during the pandemic: “We preserve liquidity and, within the bad, we survive”, Martínez points out, who acknowledges that they have less fleet than they would like for this summer, but even so it will be “more varied and with a higher average price”.

“The prospects that we manage for these months are very good, in the end it is a sector in which If there is more demand and less supply, prices and occupancy are increasing”, highlights the directive of a company that is also present in Portugal and Greece.