Car rental crunch could make it harder to hit the open road Original

SIOUX FALLS, S.D. (KELO) — Need to rent a car for a business trip or vacation?

Travelers may want to plan to pay more for it, if there is even a rental available. Market analysts say rental car prices have significantly increased and the supply of rentals is low in most parts of the U.S.

Locally, the crunch may not have as much of an impact for those traveling into South Dakota but it could for the leisure traveler who may be vacationing outside of the state or for the traveler coming into South Dakota.

Dan Letellier, the executive director of the Sioux Falls Regional Airport, said the car rental at the airport caters more to business travelers. Although flights increased at the airport in March, business travel has not yet returned to pre-pandemic levels.

“Inventory is down locally from what it was in 2019, from what I can tell visually” Letellier said.

But, car rental companies are good about matching supply with demand so a lower inventory may mean that the demand is not yet there, Letellier said.

But travel industry analysts are projecting that leisure travel will be increasing in 2021 over 2020. That travel will include car rentals.

Overall travel plunged in 2020. Less business and leisure travel meant fewer car rentals.

The industry had a 27.4% drop in total revenue for 2020, according to Auto Rental News.

Less revenue created some financial difficulties.

Hertz filed for Chapter 11 bankruptcy in 2020 and needed to sell 200,000 vehicles as part of the bankruptcy. An Aug. 3, 2020, report by cited a CNN report which said industry experts expected the companies to unload 1.5 million cars from their U.S, fleets in the coming weeks and months.

Rental companies started with fewer vehicles in 2021 than in past years which means potentials renters will have fewer vehicles from which to choose.

Now, with the COVID-19 vaccination progress, leisure and business travel has been increasing and so has the demand for rental vehicles.

Market Research Future said the global car rental market growth will increase from 2018 to 2023. North America would still have the largest share of all rentals.

South Dakota Department of Tourism photo.

According to Business Travel News, Hertz and Enterprise both reported expected strong demand for summer. The crunch could come for those who want cars for leisure travel.

“Leisure prices will most likely skyrocket because fleets are currently very reduced and there are some rental car companies ordering very little fleet for delivery at this time,” industry analyst David Kilduff said in Feb 21 post on Business Travel News.

On April 6, Auto Week reported a survey revealed that the daily fee for some mid-sized rentals was at $300. While places such as the Carolinas, southern California, Florida and the Gulf Coast saw fees of $500 a day in March.

“We have been watching the trend of rental car shortages across the country, and South Dakota is no different. What we’re encouraging travelers to do is begin planning their trip immediately,” Jim Hagen the Secretary of Tourism in South Dakota said in an email response to KELOLAND News. “Booking your rental car should be one of the first things you take care of after booking your flight. We’re also encouraging visitors to explore all options for rental companies within their destination city.”

 The car rental market is dependent on the tourism market, according to Market Research Future.

According to Allied Market Research, leisure travel rental is projected to outpace business rental through 2027.

Tourism is one of South Dakota’s top industry. Even during the pandemic of 2020, the state drew visitors. In 2020, tourism generated $276 million in state and local tax revenue, according to the South Dakota Department of Tourism.

A visitor profile from 2016-2018 shows that 3% of tourism visitors arrived by plane in South Dakota, according to the state’s department of tourism.

But, that was before several new flights were added to the Rapid City Regional Airport. On Feb. 23, KELOLAND News’ Sydney Thorson reported that local officials hoped the 10 new Rs added 10 new seasonal flights would be a boost for tourism. The new flights were with Allegiant, a new flight to and from LaGuardia, New York, during summertime, and a new airline, Boutique Air.

South Dakota Tourism reported on its website on April 16, that website traffic has increased by more than 100%, and in some cases more than 200%, from metropolitan areas such as Chicago, Milwaukee, Dallas/Fort Worth, Phoenix and several other cities.

“The interest in visiting South Dakota in 2021 is growing immensely,” Hagen said. “To top it off, we have been following the excellent news from South Dakota’s regional airports that have been very successful in recent weeks adding additional seasonal flights to South Dakota.”

The reason visitors are attracted to South Dakota may require a vehicle.

“Visitors are drawn to our wide open spaces, national and state parks, beauty of the outdoors, iconic attractions, road trip vacations, and vibrant cities,” Hagen said in his email. “When you pair these interests of travelers with the increasing confidence in traveling again, the outlook of the travel season for 2021 in South Dakota looks bright.”


The Rapid City Regional Airport lists six car rental companies on site and one off site on its website.

The Sioux Falls Regional Airports lists four car rental companies at the airport. Enterprise has two other sites in the city.

Enterprise has the largest market share at 44% of all rentals. National and Alamo are also under the Enterprise umbrella. According to Statista, National and Alamo account for another 15% of the market. Enterprise has at least 5,500 sites in the U.S.

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