When you book a trip, do you start by shopping for convenient flights? Maybe reserving a favorite hotel?

Here’s the new priority for 2021: Get the rental car first.

The sudden surge in post-vaccination travel is colliding with a relative shortage of rental cars. Rental-car companies sold a huge chunk of their fleets—hundreds of thousands of vehicles—to survive the pandemic. Now they can’t get cars onto their lots fast enough to meet the new demand, especially with car factories stalled by semiconductor shortages.

Travelers report sky-high prices and sold-out dates even in non-beach destinations like Kansas City, Houston and Memphis. Even travelers with reservations complain that they now sometimes show up and, with no cars on the lot, must wait for a car to be returned and cleaned before they can drive off.

Parks Shackelford of Washington, D.C., bought a ticket on Southwest Airlines to Jacksonville, Fla., for a hunting trip in southern Georgia in late March. Then he found he couldn’t get a rental car. He tried Tallahassee—no luck. Finally, he had to cancel his nonrefundable flight and buy a Delta Air Lines ticket to Valdosta, Ga., near the Florida border, because he could get a car there.



“If you’re going to have to have a car to travel, you need to check that first,” he says. “I can suck it up and pay more for the car, but I just could not get a car nine days before the trip no matter what.”

Hertz Global Holdings, Avis Budget Group and Enterprise Holdings, the three big U.S. rental car companies, declined interviews but responded to questions with statements saying that they expect shortages to continue. They say they’ve run into delays because of the auto-manufacturing slowdown. Hertz includes the Dollar and Thrifty rental-car brands. Enterprise includes National and Alamo.

Hertz, heavily dependent on business travelers at airports, suffered losses of $1.7 billion in 2020 and a 46% drop in revenue. In financial reports, the company said the pandemic prompted it to reduce commitments to purchase vehicles by $4 billion, and to dispose of leased and owned cars. In the fourth quarter, Hertz reported that its average number of vehicles in the U.S. was below 300,000, down 42% from more than half a million cars in the fourth quarter of 2019.



Hertz, which is reorganizing in bankruptcy court, announced last fall that it had secured commitments for $4 billion in financing to start rebuilding car inventories. Avis also suffered heavy losses even after it said it “profitably disposed” of 250,000 vehicles globally last year.

Analysts say it could have been even worse. Many past downturns have meant a weak market for used vehicles, leaving rental-car companies in a bigger bind. This time they were able to get good prices for their cars and easily get out of leases.

“They were dumping cars into an historically high used-car market, and it saved them,” says longtime industry analyst Neil Abrams.

Mr. Abrams, president of Abrams Consulting Group, thinks it will be the second half of next year before major auto-rental firms have supply back in balance with demand. “We’re going to see shortages and high prices for a while when you’ve got more customers than cars,” he says.

He also thinks travelers need to get used to paying more for car rentals, even when the imbalance eases. In the past, “customers have been spoiled by low prices and plenty of cars. You can rent a car cheaper than renting a tuxedo,” he says.

Like many travelers, Larry Pearlman has elite-level status with rental-car companies and is used to walking up to a line of cars, picking one and being on his way in minutes. On an April 5 trip to Memphis he found himself in an empty President’s Circle row at Hertz.

“Customers were waiting for cars to be driven in and returned,” he says. “In my world, any wait at a rental car when you have elite status is unacceptable. You should be able to just go in and get it, and that’s not what’s happening.”

He ended up waiting only about 15 minutes; on social media, travelers report occasional waits at various rental companies of an hour or more. Mr. Pearlman, a consultant based in Raleigh, N.C., ended up with a Nissan Versa compact instead of the full-size car he reserved.



Another factor in the quick rise in car-rental demand: Some travelers are avoiding ride-sharing or taxis during the pandemic. With a rental car, you have the vehicle to yourself (though take precautions with masks on rental-car buses).

Many travelers had grown used to renting a car for $39 a day or less before the pandemic. A quick price scan suggests how much has changed.

The cheapest price at Hertz, National or Avis for a one-day rental for Friday at Chicago O’Hare Airport, priced a week in advance on Kayak, was $117 for a Ford Fiesta economy car. Major agencies were all sold out for Friday at Houston’s Bush Intercontinental Airport, at least according to a Kayak search over the weekend. Sixt offered a Toyota RAV4 for $373.

And on Friday in West Palm Beach, Fla., one day with a Chevrolet Impala sedan would set you back $234 at Hertz. A follow-up found that Hertz location all sold out. (Those daily prices are without any sort of corporate discount.)

Travelers like Mr. Shackelford have some sympathy for the whiplash that hit car-rental companies. He still finds airline fees and penalties more egregious.

“I haven’t built up nearly the anger for the rental-car companies that I would have for major airlines, which are up there with cable companies and mortgage companies,” he says.

LINK: https://www.wsj.com/articles/h...85?mod=hp_lead_pos13

Well, duh. Saw this coming when everything was first shut down and rental companies were hurting bad.

Having said that, I've still been able to get decent rates with Hertz through USAA discounts and my President's Circle status.

Well Alan you certainly plan ahead. I have noted price increases or changes on the menu in some of my favorite higher end eating establishments. I would like to increase my prices, but have chosen to just work harder. Some dentists are applying COVID upcharges which in my opinion is a mistake.

When rental companies started selling off their supply of cars, I knew we were screwed down the road.

I typically rent out of Philadelphia where prices are typically higher anyway, particularly with Hertz, so I guess I'm used to $60, $70, $80 per day rentals. I have two reservations coming up. One next week for a day for $85 and a three day rental in May for $200 total. Not great, but not bad.

Oh, and I always rent at least a full size. My three day rental in May is a camaro convertible. It just happen to be one of the better prices.

Well, I guess that explains why I didn't have much choice in cars when I booked a car in PHX next week. All my choices were petite cars, I didn't need a huge car just something to put my golf clubs in.

No surprise. Ran into this a few weeks ago when we tried to rent a car to drive south for spring break. Not much was available and prices were not cheap.

I think if you booked two weeks out or sooner, you're likely to be OK. I don't know their algorithms, but once it hits the sweet spot - all carriers jack up price. The whole supply/demand thing and all.

Ironically, I'm in Midland TX where O&G is picking back up. I've got a car for three days, but my visits are within a mile of the hotel. And because our company won't allow us to share rental cars (da Covid!!!), all three of us rented separate cars - 3 days, 3 cars, $180-200 each. Yikes.

The most difficult part is having a pick-up point and drop off point being different. If you're not renting for a minimum of maybe 5 days in that case, I've seen many companies just not bothering, and then you can expect $4-500 for the pleasure. Again, this probably has to do with supply issues.

Coworkers Sunday flight from Florida was cancelled and he couldn’t find a rental car to get back. He ended up calling off two days and was able to fly back yesterday.

My in-laws flew into Phoenix last week, and of all the places they called to get a car, the cheapest they could find (many rental agencies had none available) was $1200 for 4 days.

I'm booking my rentals out about a month in advance now. I fully expect to show up in the near future and be told they don't have anything available, despite having a reservation...

quote:

Originally posted by MattW:
I'm booking my rentals out about a month in advance now. I fully expect to show up in the near future and be told they don't have anything available, despite having a reservation...

Like the Seinfeld episode.

quote:

Originally posted by 4x5:
My in-laws flew into Phoenix last week, and of all the places they called to get a car, the cheapest they could find (many rental agencies had none available) was $1200 for 4 days.

Huh?!?

One could Uber nearly everywhere for 4 days not come close to approaching $1,200. That is insane.

I needed to do a trip to California a few weeks ago on short notice. I called eight places to rent a car. All booked 9 to 12 days out.

I knew companies were selling off fleets. My friend works for Enterprise and he said they parked hundreds of cars

Some tourists are renting U-Haul trucks because there are more available and they’re frequently cheaper right now. How weird is that?

I wonder how Turo has affected the rental car industry, if it has at all.

Sounds like I got lucky, windstorm here blew a dead tree down in front of my work van, taking out the grill, condenser and radiator. Insurance was able to get me a pickup within 2 days over the weekend. Sure miss my van!!

I just booked on the Hertz www site for a trip starting in two weeks, no problems at all and a resaonable price. Then again, this is from a non-airport location here in Davenport, it's possible the Moline Airport (MLI) is out of cars.

Non-airport locations will always have more favorable rates.

quote:

Originally posted by Balzé Halzé:
Non-airport locations will always have more favorable rates.

Truth. The fees associated with rentals at airports can be staggering.