Car rental crisis: Holidaymakers will see costs heat up as summer approaches
A sharp decline and eventual prolonged halt in tourism here and abroad meant car rental firms had to cut costs and reduce the size of their fleet, something which remains below pre-pandemic levels and is still impacting the cost of renting.
As we claw our way out of the depths of winter, wistful holiday-goers are beginning to set their eyes on potential holiday locations, and as always, cost is usually at the top of the checklist.
For many, especially those travelling with children, renting a car is a no-brainer, giving independence to travel where they want, when they want, and although costs now seem to be below a crazed peak in 2022, those wanting to drive abroad may need to book far in advance.
The cost of car rental was quite reasonable about four years ago but skyrocketed in the aftermath of the covid-19 pandemic, at home and abroad.
“There’s no doubt that it is the sector that got the least sympathy when there were Government handouts, it’s the sector that got landed on its backside during the pandemic,” said travel expert Eoghan Corry.
A sharp decline and eventual prolonged halt in tourism here and abroad meant car rental firms had to cut costs and reduce the size of their fleet, something which remains below pre-pandemic levels and is still impacting the cost of renting.
That, in addition to a global shortage of crucial microchips needed to make new cars, meant a recipe for disaster in the sector with long-lasting knock-on effects.
“It’s really a fine-tuned system that depends on the fleet being bought, used heavily for a season and sold fairly quickly. Anything that interferes with that causes all sorts of parts of the system to break down,” Mr Corry said.
The summer of 2022 saw Ireland’s car rental costs far above the most popular European destinations with the cheapest options available in June ranging from €2,000 to almost €3,000 for two weeks in June.
While prices also exponentially rose in mainland Europe, Ireland’s dwarfed them entirely. At the time, Fáilte Ireland said the costs were undermining Ireland’s reputation for good value while the lack of cars during the summer season posed a “major challenge”.
The tourism body, which estimates that 20% of all overseas tourists to Ireland rent a car, said it was resulting in reduced tourist numbers in rural Ireland noting that rentals are “key” to getting high-spending tourists out of Dublin and into the regions.
The Car Rental Council of Ireland chief executive, Peter Boland, said the spike in prices in 2022 was primarily due to a global shortage of cars following the covid-19 pandemic. He said this was also exacerbated in Ireland in particular by a shortage of right-hand drive vehicles.
“Supply and demand are resolved right now despite an ongoing shortage of smaller cars and the lack of discounts from manufacturers for bulk purchases.
“The Irish car rental industry has always been and remains extremely competitive despite a market where buying and operating cars is more expensive than the European average,” he said.
Despite the extreme peak in 2022, costs seem to have come down significantly in Ireland but remain above pre-pandemic levels both here and abroad.
Mr Corry said prices will continue to impact travel plans and location choices both here and abroad adding that costs on the ground are “way ahead” of where they were pre-pandemic.
“The crisis is not over at all, that’s the problem. We’re running into this summer and our fleet is still about 20% below what it would have been pre-pandemic so it’s very raw supply and demand,” he said.
The Irish Examiner compared the costs of renting the cheapest five-seater available from popular rental firms for the first two weeks of July.
When comparing here with popular European destinations, Ireland was the cheapest, showing a complete u-turn on the summer of 2022 when it was the most expensive compared to its European counterparts.
Hertz
Using Hertz, a Volkswagen Polo, the cheapest five-seater available to rent from Cork Airport and Dublin Airport, will set tourists back €581.56.
This compares to €735.20 for an Opel Corsa at Fiumicino Airport in Rome, Italy, and €788.59 for the cheapest option at Malaga Airport in Spain.
To pick up a five-seater rental at Heathrow Airport in London, holidaygoers can expect to pay €820.98 while Nice Airport in France is the most expensive out of the locations trialed coming in at €1369.96 for the same two-week period.
Budget Car Rental
Budget Car Rental was found to have the best prices for the locations and dates trialed.
Renting its cheapest five-seater, a Renault Clio, at Dublin or Cork for the first two weeks of July would come to €452.05 while renting a similar car at Faro Airport in Portugal is not far behind at €482.46.
Picking up the cheapest five-seater at Malaga Airport in Spain would set you back €621.48 while doing so at Fiumicino Airport in Rome would cost €649.97.
Renting at Heathrow Airport in London would set you back €715.51 for two weeks while Nice Airport in France is once again the most expensive at €805.49.
Avis
Tourists arriving in Ireland and renting a car from Avis can expect to pay €734 for a Toyota Corolla if booked now while those travelling to Faro Airport (€737.07), Malaga Airport (€845.35) and Nice Airport, (€849.43) can expect to pay more than rates at home.
Renting the cheapest five-seater car at Fiumicino Airport in Rome (€726.66) and Heathrow Airport in London (€715.51) is cheaper than in Ireland when using Avis.
The prices quoted to the Irish Examiner are well in advance of the summer, however, with Mr Corry expecting them to skyrocket once again when the summer peak begins to loom closer.
Europcar
Europcar was the second-most expensive rental firm on average for the European destinations selected and the most expensive when booking a car in Ireland for the first two weeks of July (€735.07).
Malaga Airport was the cheapest out of the countries trialed, coming in at €802.45 for the cheapest five-seater available followed by Heathrow Airport (€840.40) and Fiumicino Airport in Rome (€886.62).
Faro Airport in Portugal would set a family of five back by €904.32 while those renting a similar car at Nice Airport in France would pay €1089.82 if booked now.
Thrifty
Thrifty was the most expensive car rental company for European destinations on average, largely due to the cost of renting the cheapest five-seater car at Nice Airport coming in at €1648.06 for Peugeot 2008 for the first two weeks of July.
Meanwhile, renting a Volkswagen Polo in Cork and Dublin for the same period would set tourists back €695.77.
The cheapest five-seater available from Thrifty at Faro Airport comes to €583.24 followed by Heathrow Airport at €748.33.
Picking up the cheapest five-seater at Malaga Airport would cost €817.11, which is still less than half the cost at Nice Airport, while Fiumicino Airport in Rome comes to €894.36.
Rising prices
The quotes received by the Irish Examiner were provided this week, far in advance of the summer peak, and in some cases were already increasing within days of initially checking.
Mr Corry believes the cost of renting a car during the summer of 2024, both here and abroad, will rise exponentially in the coming months.
“My instincts are that costs will go up very much, anything I’m looking at, I’m booking now myself,” he said adding: “The fleet is too vulnerable at peak and the only thing that will change it is whether the numbers will reach the peak.”
