Easter booking boom and chips crisis hit car rental companies

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A car rental company counter at Lanzarote airport last summer.
A car rental company counter at Lanzarote airport last summer.Ramon Munoz Moya

The restoration of tourism presents many challenges to all actors in the sector. With Easter just around the corner and summer holidays just around the corner, car rental companies are gnashing their teeth to keep up with the boom in demand. Following the pause imposed by the pandemic, the crisis in the supply of semiconductors has forced automakers to cut their production, putting a halt to their recovery. faced obstacles, rent a car Asks users to make reservations as far in advance as possible in order to plan purchases with manufacturers and stock up on the fleet they need.

The National Business Federation of Vehicle Rentals (Feneval) with and without driver has warned that it is doing everything in its power so that no one is left without a car on Easter. However, due to the global microprocessor crisis, the sector needs to buy vehicles against fleet shortages at manufacturers’ plants. “According to airline estimates, this year Spain will recover 75% of its tourism in 2019. However, we estimate that we will have 40% fewer vehicles,” says Juan Luis Barhona, president of Feneval.

The operators are studying any way to increase the number of vehicles available to the customers. The federation, which encompasses about 700 companies and represents about 95% of renters by billing figures, reports that it is increasing negotiations with manufacturers to have visibility on delivery times and enable purchase planning. Yes, to ensure the availability of the car on peak demand.

Among other strategies, companies are renegotiating contracts. buy back -which gives manufacturers the possibility to buy back the car after six or seven months- to keep the vehicles for 10 months or more. In addition, some companies choose to delay fleet sales, assuming the additional financial cost of maintaining the cars longer than usual.

Strong recovery of tourism

By anticipating a very strong recovery in tourist activity, Mallorca-based giant OK Mobility has tried to anticipate an avalanche of requests by changing the management of part of its business. “Since September we used to sell our fleet to be renewed for the next year. But last year we decided to save them for rental and with the great efforts made in the purchase department, we now have even more cars than before”, commented Othman Ketiri, the company’s founder and director.

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The multinational, which does not deny that the region is navigating turbulent waters, has reported a 100% increase in reservations compared to 2021. “The presence of national and German tourists is very strong, but large differences have been observed. British market, where until recently there were many restrictions on leaving the country”, remarked Katiri.

As a result of the rebound in bookings for Easter in the Canary Islands, some companies in the archipelago, such as Sikar, have no car rental availability during those dates. A customer in this situation is Alejandra, who has attempted to reserve a vehicle for her trip to Lanzarote, but is not able to do so due to fleet constraints.

With the return of foreign visitors, tourism is leaving behind the consequences of the health crisis and mobility restrictions, which have led to a 90% drop in business in destinations such as the Balearic Islands or the Canary Islands. In fact, the sector, which represents 20% of the automobile market in Spain, is expected to end the year with a turnover of 80% compared to 2019, provided that the microchip crisis does not exacerbate shortage problems, before 2023. Get well in the pandemic. figures.

“Book Now for Summer”

Following the pressure experienced in the months before Easter, employers urge customers to reserve vehicles for the summer holidays to receive their cars in the best possible conditions and at a competitive price. According to Enewal, a consortium of five large car rental companies that Feneval is part of, it is too early to predict that scenario, but the invasion of Ukraine and sanctions on Russia are already having consequences for the European economy. Even when filling the tank. “We are not an isolated region: in Spain we have an inflation rate of up to 10% which is going to affect mobility as well,” the association’s president, Tobias Jicic, assured.

Anval, however, is optimistic, and is confident that the supply crunch will ease in the coming months and manufacturers will recover the pace of activity before the pandemic. In his opinion, the NextGeneration EU Fund can be a valuable ally to achieve this goal. “The new PERTE of 11,000 million is a significant incentive presented by the government for Spain this week to become a manufacturer of semiconductors,” settles Jicic.

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