How Car Rentals Explain the 2021 Economy

The price to rent a car or truck was 23 percent lower in May 2020 than it was before the pandemic started.

Fast-forward a year, and millions of vaccine jabs later, and Americans were ready to travel again — but the rental car industry was stuck with its diminished fleets. And it faced challenges replenishing those fleets quickly, because automakers were facing supply constraints of their own because of production rollbacks in 2020.

In the second quarter of this year, for example, the combined fleet of Hertz and Avis, the two major rental car companies that report public data, was 312,000 cars smaller than in the second quarter of 2019 — a 30 percent drop. (Enterprise Holdings is bigger than either, but is privately held).

“In the spring of 2020, nobody really knew what to expect,” said Neil Abrams, president of Abrams Consulting Group and a former Hertz executive. “In my 45 years in this industry, nobody had ever seen anything quite like it. I’ve seen cycles, recessions, peaks and valleys, but nothing quite like this. The guys that had to make the big strategic decisions really had no precedent.”

But ultimately, “demand came back a lot quicker than I think anybody anticipated, especially on the leisure side,” he said.

Article source: https://www.nytimes.com/2021/09/20/upshot/car-rental-prices-economy.html