How To Handle A Car-Rental Scarcity Worldwide

Locally and worldwide, the current pandemic has disrupted all economic operations. Because of restrictions on people’s ability to move from one area to another, the transportation industry was severely impacted. There is still room for private vehicle rental services to thrive in the face of all of this. Due to the worldwide pandemic, the car rental sector has been experiencing a downturn.

When it comes to generating money in the post-pandemic period, vehicle rental service companies must adapt to the changing market. Hiring a car became increasingly difficult during the previous seven months, resulting in visitors planning their visits around the availability of a vehicle, paying exorbitant prices, and even renting U-Haul trucks to cruise the Hawaiian Islands.

In the past, reserving a car was an afterthought in the travel planning process, but now it is a key factor in determining where and when to go. Shutdowns and lack of travel plagued the sector in 2020, just as they did for many other industries as well. Rental businesses are trying to keep up with demand now that people are travelling again. According to iDEAL Semiconductor’s co-founder and chief executive officer Mark Granahan, “Rental vehicle businesses, which are heavily consolidated and supported by private equity, made quick financial steps to minimize the pandemic consequences.”

Covid-19 led to the unexpected shutdown of operations and cancellation of bookings. This prompted Hertz Global Holdings to apply for bankruptcy protection under Chapter 11 in May 2020.

Scarcity of semiconductor chips
On the other hand, there’s a large scarcity of semiconductor chips in the supply chain for the auto industry. A lack of critical chips delayed automobile manufacturing lines when firms returned to the market to buy new cars, limiting inventories and driving up prices of the existing cars, he added.

As more goods become “technology-intelligent” and networked, the usage of semiconductors in all sectors is on the rise. When it comes to auto-assistance systems, rearview cameras and brake sensors are just a few examples of how these chips are employed. Since the pandemic, the production of semiconductors has increased. Granahan commented on it, saying, “manufacturing plants moved its lines to support chips used in information technology goods to prioritize personal and work electronics. As a result, the spare capacity for the automobiles was deficient.”

Consequences and Revival
Once Covid-19 instances began the down surge this spring and regulatory restrictions were lifted, the car rental industry quickly recovered.

There are more individuals making trip arrangements and running into out-of-stock situations because of these shortages, according to Quantum Metric, a leading firm in continuous product design that leverages analytics to improve site experiences and conversion rates. Quantum Metric’s Mario Ciabarra said that “anger clicking” and “potential dissatisfaction” appear to be on the rise after a drop during the pandemic when people weren’t travelling. There are therefore more consumers for travel brands, but they may also be less satisfied ones.

Hertz recently announced that it just completed its Chapter 11 reorganization. According to a statement released by Hertz, the company is aggressively adding automobiles countrywide amidst the shortfall of microchips. Car rental demand is expected to remain high throughout the summer and beyond, particularly in major tourist locations. As Enterprise Holdings said in a similar statement, it expects the same demand, including an increase in the duration of rentals and a desire for specialized cars such as vans, pickup trucks, convertibles, and huge SUVs.

The plan of action
It will take two to four years to respond to a scenario like this, says Granahan, since semiconductors are complicated, expensive, and time-consuming to make. Holly Hurley, the owner of The Hollyday, a Virtuoso travel agency, who is constantly on the lookout for new vehicles for her customers, offers a few recommendations for your customers.

Preplanning ahead of the trip
Bookings are up across the board in the travel sector. Hotels and cars may not be available for last-minute rentals, because of the high demand for last-minute bookings. It is better to advise your customers to decide ahead of time whether they will need a rental automobile while visiting a place that requires it.

Seeking out places with minimal demand
When airport traffic is high, Hurley recommends renting a car from a rental agency in the travellers’ area, which has greater availability. Have a greater chance of success if you advise your clients to seek outside the airport locations, even if they are further away. The airports are the first to run out of inventory since everyone travels to the airports to book.

Connect with bespoke businesses
You might suggest to your customer that he or she use a travel advisor or travel agent to plan their trip since this will reduce the stress of the automobile search. Unlike a simple Google search, travel advisers or agents have contacts with numerous specialized rental car providers. Although their inventories are smaller, these firms tend to have better availability because they aren’t so mass market-focused.

Offer private transportation
It is possible to encourage travellers to consider private transports if everything else fails and their budgets permit, Hurley added. In some situations, the cost of using this route is now equivalent to that of renting a vehicle. The traveller’s itinerary and where he or she is driving determine if this is a possibility in some circumstances.

Conclusion
Visitors are finding ways to get around without renting a car at this time of crisis, which is problematic for rental car businesses Aside from that, these firms maintain a competitive price. Many customers are turned off by surge pricing, maybe for good, and there are few alternatives as a result. In anticipation of further swings in market demand as we return to normalcy, car-rental companies are continuously modifying their fleets to suit this need. Right now, it’s hard to make travel plans. Also, companies are having difficulty regaining their footing, and Ciabarra urges everyone, especially customer service personnel, to be patient. The complete revival is not so far, but unlike previously, we have to be equipped to face unprecedented scenarios.