A SHORTAGE of cars available to rent is driving up prices during the busiest period of the year and could cost the tourism industry up to €200 million.
As reported earlier ( Motors, June 10th), the number of cars supplied to the hire market has fallen significantly, with the latest figures showing a drop from nearly 19,000 in 2008 to 6,200 for the same period this year.
Although visitor numbers have reduced, there is evidence that supply is not meeting demand and hence the price to the customer is increasing. Additionally, older cars are also being used.
Dermot Jewell, chief executive of the Consumers Association of Ireland, told The Irish Times: "For the consumer who is paying increased rates for an older car, that is anything but progressive."
Paul Redmond, chief executive of the Car Rental Council of Ireland, points out that “the less cars you [have available to rent] the higher the unit cost”.
Although Redmond believes that the problem this year is restricted to busy holiday weekends, as well as July and August, he suggests that the situation will be poorer in 2010. “If people can’t get cars next year, or the cost of them is so high that it is unsustainable, the impact on general tourism revenues could be . . . €150-200 million.”
The Government also plans to end the VRT relief offered on cars which are bought for hiring out. “We’d be asking that it be deferred by at least a year until we get some stabilisation back,” says Redmond.
Dermot Jewell doesn’t believe that now is the time for the taxpayer to support an industry that profited significantly from the boom. “If prices are going to continue to be high, it will be another reason why many consumers will decide not to visit Ireland and that’s where there is a need for a number of people to be sitting around a table, including Government, but they are not necessarily responsible for resolving the entire issue.”
Redmond suggests that there “is a unique opportunity next year to promote a scrappage scheme – if there was going to be a scrappage scheme for 10-year old cars – for people to exchange their cars for ex-car rentals in 2010.