When the pandemic struck, there weren’t many industries that were not impacted.
The car rental industry was one that was hit incredibly hard. Some studies suggest that the industry demand dropped by 90% at the start of 2020.
People were no longer traveling around anywhere near as much, and this led to some high-profile issues for companies including some that had to file for bankruptcy.
Suddenly, a huge portion of the industry was no longer in demand, and it is a long road to recovery as many car rental firms have still not returned to pre-pandemic levels. It could take some years to get there.
The car rental industry has always relied on personal customers who were traveling, or even business contracts for traveling reps and salespeople, for instance. The option to get off a plane and hire a car has seen the industry grow with branches in airports all over the world.
In no time, travel was discouraged, or even outlawed. Globally, huge customer bases such as EU car renters were no longer using the vehicles. For a car rental company, they still had to foot all of those overheads and part with huge levels of cash in order to keep all of their branches going.
Even if they weren’t going to buy new vehicles, those huge parking lots and branches in airports aren’t cheap.
Car Rental Industry Reaction
The car rental industry saw companies react in a variety of different ways. Bigger car rental companies were able to make some big changes. Hertz filed for bankruptcy as a method of restructuring.
They were actually able to sell a lot of their fleet and make a profit in some cases on the vehicles.
Huge restructures among rental companies have become popular, with some choosing to scale down their fleets or even remove some of their storefronts.
The studies on the industry make for stark reading. The global car rental market was worth over 85 billion dollars in 2019, but this dropped drastically during the pandemic with an estimated 32% drop in the value of the industry. Fortunately, the industry is predicted to bounce back once demand returns (at the same times, someone is trying to do some good businesses…)
There were some interesting statistics about the cars that were hired at this time. For example, a lot of the vehicles were hired for longer periods of time, and longer journeys, with people opting to stay away from airline travel and take longer drives to visit family, for instance.
While some industries will see permanent changes (for instance, companies making their entire workforces remote) there are industries that will have to bounce back.
The car rental industry is forecast to be worth over $140 billion a year by 2027. Of course, the lasting effects of things like Hertz, a 102-year-old company, having to declare a form of bankruptcy, will have cost people their jobs.
🔎 Read also: Renting a car at the airport
The author of the article: Ben Hartwig.
Ben is a Web Operations Executive at InfoTracer who takes a wide view from the whole system. He authors guides on entire security posture, both physical and cyber. Enjoys sharing the best practices and does it the right way!