Hoping to rent a car this summer? Good luck
Taylor Raggers and her partner, Will Perry, were looking forward to their honeymoon in Newfoundland this summer before realizing they would have no way to travel to the province.
The couple, who live in Port Hope, Ontario, tried to book a car in February for a trip they were planning to take in late June, but had no luck.
“I probably called five or six places, then everything I could find online, and they [all had] nothing available,” Raggers said.
Lack of car rentals means Raggers won’t be able to explore Perry’s home province and meet his family members who live there. Instead, the couple will be driving in their own vehicle to a closer destination: Nova Scotia.
“Will really wanted to show me where his family was from. And I really wanted to see Newfoundland. It’s high on my to-do list,” she said.
History repeats itself as last summer’s “carpocalypse” returns. As travel resumes and more Canadians plan to get out this summer as the pandemic subsides, car rental companies are trying to secure more vehicles, said Craig Hirota, vice president of government relations. and member services for Associated Rental Car Operators in Canada.
“Our best estimates show we’re probably still down 15-20% from pre-pandemic numbers,” Hirota said.
Where is my chip?
Earlier this month, Statistics Canada released the first in a series of reports on the rental vehicle industry, the first focusing on British Columbia.
The report found that the size of rental car fleets in the province fell by more than 30% in 2020. And while fleets began to recover in 2021, they have not returned to pre-COVID-19 levels. pandemic, with businesses struggling to find vehicles.
One of the biggest contributors to the rental car shortage is the slow production of new vehicles. Automakers have experienced a production backlog as they continue to face a shortage of semiconductor chips, a necessary part of digital technology.
“It was exacerbated by the fact that our industry had to reduce its fleets … when demand fell in March 2020,” the onset of the COVID-19 pandemic, Hirota said.
Montreal-based car rental company AutoPlateau is taking up precisely that challenge. Gabriel Raymond, who works for the company that is owned by her family, said she had to reduce her fleet when the pandemic hit. Now, as he tries to expand, Raymond said it’s been hard to find cars.
“Automakers are running out of chips for cars. So car dealerships are running out of cars. So car rental companies are not able to renew their fleets,” he said.
But Raymond said the company was able to overcome the shortage because it kept the vehicles longer, choosing to repair them instead of replacing them.
Despite lacking a marketing budget, he said AutoPlateau attracted customers who had no chance of getting car rentals elsewhere.
“His [stressful] because we get a lot of inquiries from everywhere that we wouldn’t otherwise because we’re a small business,” Raymond said, adding that the business relies on word of mouth to attract customers.
The shortage of rentals has dramatically increased the cost of renting a vehicle. According to Statistics Canada, rental vehicle prices increased by 30% in 2021, while the overall inflation rate was 3.4%.
Hirota said the higher cost of renting a car is partly because demand exceeds supply and inflation drives up the cost of cars and repairs.
Plan a trip this summer
With summer in sight and most COVID-19 restrictions lifted across the country, tourism is expected to pick up. the The World Trade and Tourism Council plans that the contribution to GDP of the Canadian travel and tourism sector could rebound to $157 billion (CAD) in 2023, just 0.8% below pre-pandemic levels.
This means more travellers, like Taylor Raggers, will be looking to rent a car.
Raymond recommends travelers hoping to rent a car this summer plan as early as possible and be wary of companies that overbook.
“Overbooking, especially in [a] high demand period means they are going to put more customers on the same car,” he said.
Some travelers are also turning to a less conventional transport option: carpooling.
Similar to Airbnb, car-sharing services allow people to rent their vehicle to others. US car-sharing company Turo says its services are helping customers secure their vehicles amid the rental shortage.
“What we’re seeing is our Turo hosts stepping in to fill the void,” said Cédric Mathieu, Vice President and Head of Canada at Turo.
Mathieu said the peer-to-peer car-sharing model is more flexible than a car fleet model, which faces challenges when having to increase or decrease the number of vehicles available for hire.
“As demand has started to increase again, we are able to acquire and convince more hosts to join us,” he said.
Turo currently has over 50,000 vehicles available in over 350 cities across the country. More recently, the business has expanded to Newfoundland and Labrador, New Brunswick and Prince Edward Island.
As for when a car rental industry recovery can be expected, Hirota of Associated Canadian Car Rental Operators said it’s hard to predict, given how quickly things can change. But as automakers continue to ramp up production, he said challenges are likely to persist for the next two years.
“I think it’s going to remain a challenge to get vehicles through the coming year and maybe the year after,” he said.