Business travel

Business travel returns, rental car supply still lacking

A car rental industry executive said there was a return to business travel, but companies are facing a lack of vehicles.

During an interview with CNBC’s Jim Cramer Hertz chief executive Stephen Scherr said business travel was on an “uptrend” and international visitors would return to the United States as new coronavirus-related travel restrictions are lifted.

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While the car rental company reported “better-than-expected earnings and revenue” in the first quarter of 2022, officials said it was facing constraints on the supply of new vehicles and inflationary cost pressures.

Scherr said problems with getting enough supply to meet demand could last well into 2023. He also revealed that the rebound in business travel is still in its infancy compared to the recent success of pleasure trips.

“When that happens, I think there’s more demand here than what we’re experiencing right now, and right now it’s a supply and demand issue, which is to say that the demand exceeds the amount of fleet that the industry, not least Hertz, has,” Scherr told Cramer.

Earlier this week, new research published by Allianz Partners in its Top 10 Summer Rental Car Report showed that Americans are once again traveling to major cities. Over the past two years, the open road and open spaces have been preferred by renters, but major metropolitan destinations are making a comeback.

Hertz also recently announced a new global partnership with Swedish electric car maker Polestar, which includes purchasing up to 65,000 vehicles over the next five years. Polestar’s first electric vehicles are expected to be available for hire in spring 2022 in Europe and late 2022 in North America and Australia.