Whether for security reasons aimed at limiting potential exposure to Covid-19, or due to desires for sustainability, the demand for ground transportation options for business travel continues to grow. But the environment has changed since March 2020.
It has been well known that car rental companies, after decimating their fleets with heavy sales in the early months of the pandemic, found themselves with supply shortages once demand started to return. Although major rental agencies have started to bolster their fleets, they are still behind 2019 figures and some have redistributed their inventory to destinations with high leisure demand.
It doesn’t look like that will change anytime soon, given the continued shortage of semiconductor chips and the nascent but growing return to business travel. Still, some travelers who previously traveled shorter distances are opting to hire cars for social distancing reasons or because airlines have cut off some secondary and tertiary routes.
As a result, many business travelers find they may need to book further in advance to ensure availability. Prices have soared to take advantage of this strong demand. In 2019, the average daily price for car rentals was $77, according to JD Power & Associates. It rose to $85 in 2020 and remained flat in 2021 at $84. But year-to-date 2022, it’s $91.
Additionally, Hertz terminated or renegotiated corporate contracts during the bankruptcy restructuring, so some companies are not getting the same deals as before. Rising gasoline prices increase costs.