Travelers line up for rental cars Friday, July 30, 2021, at the McCarran Rent-A-Car Center. Because of several factors in the car rental market, some areas have seen prices skyrocket and shortages of customer stock, but travelers to Las Vegas seem to have avoided the worst of the rental car crunch.
Wednesday, Aug. 4, 2021 | 2 a.m.
As they waited at the McCarran Rent-A-Car Center for a shuttle to the airport, Steve and Mary Anne Reith were content.
The couple from Missouri had rented a Mini Cooper from Enterprise to drive around Las Vegas, and to the Grand Canyon and Hoover Dam.
Unlike some other renters in Las Vegas and around the United States in recent months, the Reiths were able to reserve the vehicle they wanted for what they described as a fair price.
“We have no complaints,” Steve Reith said Friday waiting for the shuttle. “We had a great experience and a great time. Yes, prices were a little higher than normal, but not significantly so. I think it helped that we reserved about a month ago.”
Because of several factors, experts say, there’s a supply-and-demand imbalance in the car rental market, which has caused prices to skyrocket in some places.
The main reason, according to Mike Taylor of data and analytics firm J.D. Power, is because the big rental car companies started selling off product early last year after the COVID-19 pandemic hit.
When consumer demand returned this year sooner than most had expected, companies like Avis Budget Group, Hertz Corp., and Enterprise Holdings didn’t have the inventory to properly service the throngs of customers who wanted to get out and travel.
“Nobody expected demand to come back as quickly as it did,” said Taylor, a travel intelligence director at J.D. Power. “I don’t want to say it was a miscalculation because there just wasn’t any precedence for this, but it was a surprise that demand came back the way it did. It’s put the ‘big three’ rental companies in a bind.”
There’s also a global shortage of the computer chips needed to outfit new vehicles, which has caused a supply backlog.
With rental car companies already dealing with lessened fleets, they haven’t been able to replenish their supply because not enough new vehicles are being made available in the marketplace.
“Normally, the rental car companies would go to the manufacturers — General Motors, Ford or Nissan — and say they want to buy up any excess inventory lying around,” Taylor said. “With the chip shortage, there’s a limited number of new cars available. The price of used cars has gone up about 40% in the past six months because the rental car companies are trying to buy back the vehicles they were selling off a few months ago.”
Traditionally, Las Vegas, though it is one of the most popular destination cities in the U.S., isn’t as popular for rental cars as a destination city like Orlando, Fla., or Honolulu.
According to Kayak, an online travel agency and search service, Las Vegas — which attracts over 40 million visitors during a nonpandemic year — was the fifth-most popular place in America for vehicle rental searches as of late July.
Prices in Las Vegas were also up about 70% when compared with the pre-pandemic summer of 2019, the company said. Kayak reported that it now cost just under $100 per day, on average, to rent a vehicle here.
“We’ve seen unprecedented U.S. demand this summer,” Kayak CEO Steve Hafner said in an emailed statement.
The Las Vegas market, however, seems to have avoided the worst of the rental car crunch.
Along with the Reiths, Matt Gonzalez and Sue Sasse, from the Modesto, Calif., area, also expressed satisfaction with their Las Vegas experience Friday while at the McCarran Rent-A-Car Center.
A frequent traveler, Sasse said the price she received to rent a Nissan Rogue in Las Vegas was much better than recent experiences this summer in New Jersey and Denver.
Sasse said she paid about $250 to rent a car for two days last month while in Colorado. She was able to rent the Rogue here, she said, for close to $80 per day.
“I fly a lot, and it was the best I’ve seen in a while here in Las Vegas,” Sasse said. “It was pretty seamless.”
Gonzalez, who has a daughter who lives in Las Vegas, said the couple considered using a ride share service like Uber but decided it would be cheaper to rent a vehicle.
In Hawaii, it’s been a nightmare lately for some travelers looking to rent vehicles.
A number of media outlets reported in the spring that tourists in Hawaii had resorted to renting U-Haul vehicles for sightseeing purposes.
A U-Haul spokeswoman recently said it had been difficult for the company to keep track of such tourist renters, but confirmed that it was a phenomenon that had continued into the summer months.
Price hikes have also been seen in places not considered to be high-traffic tourist destinations, such as Portland, Ore.
Taylor said he recently rented a compact car to drive to a wedding in Oregon. He was surprised to find that the best price he could get was about $140 per day.
“In a normal situation, I’d expect to pay $35 per day for a car like that,” Taylor said.
In Las Vegas, not all recent car rental customers have been pleased with their experience.
Williams, visiting Las Vegas last week from Arizona, said he reserved a vehicle in February but was surprised to find, upon arrival, that he didn’t get the price he expected.
On Wednesday while at the car rental center, Williams said he ended up spending over $100 per day for a rental car he took to the Grand Canyon and Zion National Park, among other attractions.
“It wasn’t a great experience because they couldn’t confirm that they’d get us the vehicle we reserved,” Williams said.
That same day, a representative of one of the discount companies at the McCarran Rent-A-Car Center said a full-sized sedan could be had for around $80 per day.
A representative of Avis Budget Group said the company didn’t wish to comment for this story while a message for a Hertz media contact member was not returned by presstime.
In a two-paragraph statement sent by an Enterprise Holdings official, the company acknowledged “increased demand for vehicles for travel,” which would likely last for several more months.
“A key challenge right now is global supply chain challenges, most notable is the chip shortage,” the company’s statement read. “Our relationships with our manufacturing partners remain strong and our fleet acquisition team is working hard to secure additional vehicles to meet the ongoing increase in demand.”
While Taylor cautioned that the rental market would likely remain volatile for a time, he agreed with Enterprise Holdings that it would likely balance out in the coming months.
“My guess is that it will be until the end of the year,” Taylor said. “We track the car manufacturers, and they haven’t solved the chip problem yet, so that’s going to be part of it. Eventually, there will be tens of thousands of cars waiting to be sold, and the rental companies will buy them. Then, demand will be met and prices will go down.”
