Rental car prices are hitting 'record highs' during the Fourth of July weekend - see the 10 cities with the highest demand
- The rental car shortage has been plaguing companies across the US since late spring.
- Now, rental-car prices and demand are hitting fever pitch during the Fourth of July travel frenzy.
- About 43.6 million Americans will hit the roads ahead of the long weekend.
- See more stories on Insider's business page.
About 43.6 million Americans will hit the roads ahead of the Fourth of July travel frenzy, according to the American Automobile Association. And that means traffic, high gas prices, and the exacerbation of the US rental car shortage.
Rental car prices and demand for the July 1 to 5 holiday weekend are up over 70% compared to the same time in 2019, according to travel search engine Kayak's data from the first half of June. And in some locations, demand is up by 300%, all while the US is still dealing with its mass rental car shortage.
This shortage has been plaguing companies and travelers since late spring. And it's all thanks to a "perfect storm" of reasons, Chris Woronka, a senior hotel-and-leisure analyst at Deutsche Bank, told Insider in mid-April. Earlier on during the COVID-19 pandemic, car rental companies like Hertz and Avis sold off sections of their fleets to save cash. But now, as travel returns, these same companies are struggling to regrow fleet sizes due to the global computer-chip shortage that's increased used-car prices while decreasing the number of available new cars.
This shortage, which is being compounded by high demand, is causing rental-car prices to jump 86% compared to last year's July Fourth holiday weekend, according to AAA. Now, rentals in hot destinations - such as Kahului, Hawaii and Anchorage, Alaska - are hitting "record high" prices with averages of up to almost $440 per day, according to Kayak.
"We've seen unprecedented US demand for rental vehicles this summer and supply isn't keeping up," Steve Hafner, Kayak's CEO, said in the press release.
Cindy Ord/Getty Images
These are the 10 most popular car-rental cities in mainland US from July 1 to 5, according to Kayak:
- Denver
- Los Angeles
- New York
- Orlando, Florida
- San Diego
- Las Vegas
- Miami
- Chicago
- San Francisco
- Boston
"2021 has definitely been a huge turnaround for the car-sharing industry in Orlando," Anthony Paulino, a Turo host in Orlando, Florida, said in an emailed statement in mid-April. At that point, Paulino already had bookings for November.
Kayak's list is limited to mainland US cities, but Hawaii's rental-car shortage isn't doing much better either. The Aloha State is also being pummeled by the same issue after the state's fleet of rental cars dropped over 40% during the COVID-19 pandemic, according to Hawaii's tourism website. This drop in supply - along with a boom of tourists flocking to the islands - has pushed travelers to rent U-Hauls instead of cars, which has displeased the state's tourism agency.
"The Hawai'i Tourism Authority does not condone visitors renting moving trucks and vans for leisure purposes," the agency wrote under the "rental car shortage" section of its website.
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