With a recently estimated reduction of more than 90% of non-essential travel, car rental companies are beginning to feel the ripple effect being caused by the coronavirus outbreak.
While three local car rental branches remain open, the excess amount of cars on their lots can only mean business is dwindling during a time the car-sharing industry has been hit hard by less demand.
“Like others across the travel industry — and countless other companies large and small — we have witnessed an impact to our business,” said Lisa Martini, a spokesperson for Missouri-based Enterprise Holdings. “This includes a decrease in reservations as travel has come to a standstill.”
That standstill in reservations is highest at rental locations based at airports, said an industry expert.
“Our business is down somewhere between 50% and 75% on average at the airport locations,” said Greg Scott with the American Car Rental Association.
Scott said neighborhood branch locations are seeing a decline in customers, but not at a rate as high as what the industry is seeing at airport branches.
“There are people who are in accidents and need an insurance replacement vehicle,” he said. “And there are always people who don’t have a car and need one.”
Scott estimated that a typical day for a branch would be having roughly 70% of available cars out for rent.
“If 90% of them or 80% of them are are not out on rental, all of a sudden you’ve got a huge parking problem,” Scott said in an interview with News-Press NOW. “That’s been reported by a variety of media sources.”
With an excess supply and a decrease in demand, car rental giants have announced massive layoffs and furloughs.
Late last month, Hertz said it plans to lay off some 10,000 employees in North America. Meanwhile, the world’s largest fleet of rental vehicles, Enterprise Holdings, also announced a series of furloughs and layoffs. Enterprise Holdings is a privately held company that owns the rental brands Enterprise, Alamo and National Car Rental.
Enterprise realized the layoffs were necessary because of the extension of some local shutdowns and recent extension of federal guidelines on social distancing, the company said. Some layoffs began March 23 while others began last week.
The layoffs will affect Missouri employees in several jobs and locations, including at company headquarters in Clayton, Missouri. It wasn’t clear if either Enterprise Hertz or Avis-Budget was laying off any St. Joseph employees.
Regardless of the uncertainty the car rental market faces, the industry has been deemed as essential by the U.S. Department of Homeland Security and remains open for business.
“We remain open and are committed to helping serve these critical transportation infrastructure needs during this challenging time,” Martini said in a statement to News-Press NOW. “While we remain open for business, we have modified our offerings at some locations for the benefit and well-being of both employees and customers. Part of these temporary operational changes, include curbside rental transactions at our open branch locations, as well as delivery, to promote social distancing.”
There are an estimated 1.3 million rental cars currently in circulation in the U.S., according to Scott.
The Associated Press contributed to this report.