Visitors are increasingly returning to Hawaii as the light at the end of the COVID-19 tunnel beckons, but the influx has been met with an unwelcome side effect of the pandemic — a shortage in rental cars.
If those arriving to the islands are lucky enough to find one, chances are that it’s going to be pricey — possibly even hundreds of dollars per day for an economy car. A search for vehicle availability in two weeks on Expedia showed a standard car costing more than $200 a day.
The pandemic essentially shut down Hawaii’s lucrative tourism industry last year amid stay-at-home orders aimed at preventing the spread of the coronavirus. As with other businesses, rental car companies had to take desperate measures to stay afloat.
That included reducing staff and inventory by selling cars to offset major losses as travel nearly ground to a halt worldwide.
Hawaii had approximately 10,000 fewer rental cars in fiscal year 2020, which ended in July, compared with the same period the previous year, according to estimates calculated by Chief State Economist Eugene Tian using the latest airport revenue data.
Sue Kanoho, executive director of Kauai Visitors Bureau, warned tourists of Hawaii’s shrunken rental car inventory in a social media post Wednesday, saying they should be “prepared for the impact of that reduction in availability and pricing.”
It’s not quite clear how severe the rental car shortage is, as the state does not collect data on how many rental cars are currently operating. Rental car company representatives either declined to comment or did not respond to Civil Beat’s inquiries about their inventory.
Hawaii’s Department of Transportation said it does not keep a central registry of all rental cars in the state. But tax data, which includes collections from rental vehicles, helps paint the picture of the industry’s fluctuations during the pandemic.
The amount of such taxes collected has been inching back up since November, data shows, and has increased much more this year. However, during the height of the pandemic-induced economic fallout in months prior, the entire industry came to a near halt.
Sarah Bott’s family struggled to find an affordable rental car in recent weeks as her siblings planned a monthlong visit to Maui to celebrate their mother’s 99th birthday on Friday.
“This is like a nightmare,” said Bott, who works as a tour guide and cares for her mother on Maui. “We haven’t seen our 98-year-old mother in a year. Renting a car has been impossible.”‘
Just three weeks ago, Bott said she was able to book a rental car to take visitors to Hana for about $50 a day, and assumed her family would be able to do the same.
“That’s why I was so surprised when I started hearing from my family that there’s a rental car shortage,” she said.
Cars were going for hundreds of dollars a day at least, and even prices on car-sharing services like Turo had skyrocketed, she added. A passenger vehicle that would comfortably fit at least four people, which is 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 instead of forking out thousands of dollars in rental car fees, Bott said.
“It was cheaper than renting a car,” she said.
Economic Fall0ut For Rental Companies
The situation was so dire that one 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 its Worker Adjustment and Retraining Notification letter, which requires companies to provide advance notices of plant closings and mass layoffs.
Enterprise Rent-A-Car laid off 68 Hawaii employees, while Avis Budget Group, which owns Avis and Budget, put 63 on unpaid leave, according to notices by those companies.
Rental cars without renters to drive them ended up parked at airports, or in Maui’s case, in former sugarcane fields. On Oahu, some fleets were stored at the Aloha Stadium. Others were sold in used car markets.
Now the tables have turned. Visitors are returning but there aren’t enough rental cars for them.
Passenger data shows that in the first three months of 2021, more than 1.3 million people arrived at Hawaii airports, a sharp increase considering only 2.7 million people arrived in all of 2020.
“There’s been quite a bit of 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 major companies, including Enterprise and Hertz.
Harrison said he’s been getting a lot of customer inquiries about how to find a rental car lately. Traffic to his website has also increased.
“That also has to do with the lack of cars,” he said. “People have to search more and visit more websites.”
The best bet for people looking to rent cars in Hawaii is to make their reservations way in advance, he said. ”
So when will companies stock back up? Harrison said companies are wary of stocking back up to the pre-pandemic levels, seeing as the situation remains unpredictable.
“They don’t want to run into the same problems,” he said.
The rental car shortage has had a ripple effect throughout the car sales industry, analyses show.
Rental car companies stopped ordering new cars during the worst parts of the pandemic, and mass-selling their existing cars negatively affected used car sales value.
COVID-19 also disrupted supply chains for computer chips installed in cars, and that means new cars can’t come off the assembly line, according to Dave Rolf, executive director of Hawaii Automotive Dealers Association.
“Now there is a shortage of both new and used cars on the market,” he said in an interview.
That means neither dealers nor rental car companies are able to quickly restock with new cars, and it’s unclear when things will return to business as usual.
“Bringing it back into balance takes a little bit of time,” he said.
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Hawaii's Pandemic-Induced Rental Car Shortage — Here's What The Data Shows - Honolulu Civil Beat
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