Visitors are increasingly returning to Hawaii as the light beckons at the end of the COVID-19 tunnel, but the influx has been met with an unwelcome side effect of the pandemic — a shortage of rental cars.
If those arriving on the islands are lucky enough to find one, chances are it will be expensive – possibly even hundreds of dollars a day for an economical car. A two-week search of vehicle availability on Expedia revealed that a standard car costs more than $200 per day.
The pandemic has essentially shut down Hawaii’s lucrative tourism industry over the past year as stay-at-home orders aim to stem the spread of the coronavirus. As with other companies, rental car companies had to take desperate measures to stay afloat.
This included reducing staff and inventory by selling cars to offset larger losses as travel nearly ground to a halt around the world.
Hawaii had about 10,000 fewer rental cars in fiscal 2020, which ended in July, than in the same period last year, according to estimates calculated by chief economist Eugene Tian using the latest airport revenue data.
Sue Kanoho, executive director of the Kauai Visitors Bureau, warned tourists about Hawaii’s dwindling rental car inventory in a social media post Wednesday, saying they should “be prepared for the impact of this reduction in availability and prices.”
The extent of the rental car shortage is not entirely clear, as the state does not collect data on how many rental cars are currently in operation. Rental car company representatives either declined to comment or did not respond to Civil Beat’s inquiries about their inventory.
The Hawaii Department of Transportation said it does not keep a central registry of all rental cars in the state. But tax data, which includes rental vehicle collections, is helping paint the picture of the industry’s volatility during the pandemic.
The amount of these taxes collected has risen again since November, the data shows, and has risen much more sharply this year. However, at the peak of the economic fallout caused by the pandemic in the previous months, the entire industry almost came to a standstill.
Sarah Bott’s family have been struggling to find an affordable rental car in recent weeks as her siblings planned a month-long visit to Maui to celebrate their mother’s 99th birthday on Friday.
“It’s like a nightmare,” says Bott, who works as a tour guide and takes care of her mom on Maui. “We haven’t seen our 98-year-old mother for a year. Renting a car was impossible.”
Just three weeks ago, Bott said she could book a rental car to take visitors to Hana for about $50 a day and figured her family could do the same.
“That’s why I was so surprised when I heard from my family that there was a shortage of rental cars,” she said.
Cars cost at least hundreds of dollars a day, and even car-sharing services like Turo have skyrocketed, she added. A passenger car that would comfortably fit at least four people what they were looking for was listed at $500.
Her sister Martha Murphy, who is visiting from Lake Tahoe, chose to buy a used car rather than spending thousands of dollars in rental fees, Bott said.
“It was cheaper than renting a car,” she says.
Economic consequences for landlords
The situation was so dire that a national powerhouse – Hertz – filed for bankruptcy last April, and as a result laid off about 10,000 employees, including more than 140 in Hawaii in May and 64 more in a subsequent round.
“These layoffs were directly related to the COVID-19 public health crisis,” a Hertz representative wrote in his Notification letters on adjustment and retraining of workers, requiring the company to give advance notice of plant closures and mass layoffs.
Enterprise Rent-A-Car laid off 68 Hawaii employees, while the Avis Budget Group, which includes Avis and Budget, took 63 unpaid leave, the companies said in releases.
Rental cars without renters ended up parked at airports or, in the case of Maui, in former sugar cane fields. A few fleets were stored on Oahu Aloha Stadium. Others were sold at used car markets.
Now the tide has turned. Visitors are coming back, but there aren’t enough rental cars for them.
Passenger data shows that more than 1.3 million people arrived at Hawaii’s airports in the first three months of 2021, a sharp increase considering only 2.7 million people arrived in all of 2020.
“There was quite a demand, but not the supply to meet the demand,” said Robert Harrison, owner of Aloha Rents, a Hawaii-based rental car distributor that works with big companies like Enterprise and Hertz.
Harrison said he’s had a lot of inquiries from customers about how to find a rental car lately. Traffic to his website has also increased.
“It also has to do with the lack of cars,” he said. “People need to search more and visit more websites.”
The best bet for people looking to rent cars in Hawaii is to make their reservations well in advance, he said.
When will companies stock up again? Harrison said companies are cautious about bringing inventories back to pre-pandemic levels as the situation remains unpredictable.
“You don’t want to run into the same problems,” he said.
The rental car shortage has impacted the entire auto sales industry, analysis shows.
Rental car companies stopped ordering new cars during the worst of the pandemic, and the bulk sale of their existing cars negatively impacted the retail value of used cars.
According to Dave Rolf, executive director of the Hawaii Automotive Dealers Association, COVID-19 has also disrupted supply chains for computer chips installed in cars, and that means new cars can’t roll off the assembly line.
“Now there is a shortage of new and used cars on the market,” he said in an interview.
That means Neither dealers nor rental car companies are able to quickly stock up on new cars and it’s unclear when things will be back to normal.
“It takes a bit of time to bring it back into balance,” he said.
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