Highway in Florida: zero result
Photo: © Marc Serota / Reuters / REUTERS
As early as February, Jonathan Weinberg suspected that something was going on. On the weekend of Presidents' Day in Florida, rental cars suddenly ran out, says the founder of the online broker AutoSlash: "The cars were sold out in 18 out of 20 airports." Weinberg initially considered this to be an exceptional phenomenon. But he was soon taught better. Three months later there is a lot of excitement in the car nation USA. Travelers report empty parking spaces, long waiting times to collect pre-ordered vehicles and skyrocketing prices. "In parts of the country there are no longer any rental cars," says Weinberg. "The situation is pretty bad."
Millions of Americans have one main wish after the Covid vaccination: just get away.
Because travel abroad is still difficult, domestic tourism is booming, whether in Florida, the gambling dens of Las Vegas or one of the famous national parks.
But if you want to marvel at the mountain scenery along the Going-to-the-Sun-Road in Glacier National Park this summer, you better have reserved the touring vehicle.
He was pretty fully booked, reported Dale Duff from the local Hertz office.
It looks similar with the competition.
The airlines have increased their capacity for the destination by more than 50,000 seats compared to 2019.
The number of rental cars has meanwhile decreased by 2000.
Furniture trucks parked on the beach
So instead of a week off on the Hawaiian dream island of Maui? The search query at the Avis Airport Station returns zero results for the beginning of July. Competitor Enterprise also leaves the customer empty-handed. Hertz still has cars: the cheapest for $ 1,150 a week, prepaid but without insurance. That's cheap compared to the $ 600 or more a day that other providers are said to have called during the March spring break. The government, concerned about the reputation of the Aloha state, announced an investigation into business practices. Resourceful tourists helped themselves and instead of the overpriced small car rented from the local removal company U-Haul. This was noticed because bathers were amazed at the furniture trucks parked on the beach.
Overall, the prices on the rental car market are now on average three to five times above the normal level, says Weinberg.
The car shortage is the result of a perfect storm: when business collapsed last year due to the pandemic, rental companies sold off parts of their fleets - a common survival strategy during a recession.
Avis alone reduced its global fleet by 250,000 vehicles.
Suddenly nobody wanted to go to Hawaii anymore, so the unnecessary rental cars were shipped to California.
Nobody expected that customer demand - thanks to the wave of vaccinations and generous stimulus packages - would return so suddenly and with such force.
And all of this at a time when the lack of chips is slowing down car production around the world.
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Weinberg predicts that the situation will not relax anytime soon.
The consequences for other industries worry him.
If you unsuccessfully request a rental car in Anchorage, you may not even arrive at all.
The hotels in Alaska, which are placing their hopes on this year's short summer season business after Corona, could suffer as a result.
The car rental companies make do as best they can.
They move cars to the hotspots, where customers crowd at the counters - and with it the problem elsewhere: First the cars became scarce in Miami, then in the nearby states of Georgia and South Carolina.
In the used car market, Avis & Co. are no longer only on the road as sellers, but as buyers.
That in turn drives prices up there.
Overall, however, the customer crisis is a gift for the industry.
The companies would "make a lot of money in the near future," predicts Maryann Keller, a consultant who previously sat on the board of Dollar Thrifty, now part of Hertz.
Hertz can choose the savior
Enlarge image
Hertz location in New York: Two groups of investors scramble for the company that was previously declared dead
Photo: Cindy Ord / Getty Images
Hertz, one of the three big names alongside Avis and Enterprise, should help the sudden rush of customers to resurrect.
Soon after the pandemic began, the roughly $ 19 billion indebted company was insolvent in May 2020.
Twelve months later, two groups of investors are wrestling over who can steer it out of the bankruptcy proceedings under the so-called "Chapter 11" into a promising future.
Hertz can choose the savior.
On Wednesday, the company announced that it would prefer to give preference to the improved offer from Knighthead Capital Management and Certares Opportunities together with Apollo Capital Management.
The offer puts the company value at over six billion dollars.
It cannot be ruled out that the losing bidder may add more in the next few days.
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The Knighthead Consortium's plan is for the borrowers to be paid off in full.
But not only that: The shareholders should receive 50 cents per share as well as the opportunity to participate in the company to a certain extent.
It is unusual for shareholders not to go completely empty-handed at the end of insolvency proceedings.
It would at least be a moral triumph for small investors who were not deterred by the bankruptcy of the past year.
Long before the GameStop hype, daring amateur investors pounced on the broken-down car rental company.
They weren't even put off by the fact that the company itself publicly declared its shares worthless.
However, very few investors have made real profits with the hyped stocks that bet on the comeback of the car rental company. They were just too early.