As travel increases across the U.S., demand for rental cars has outpaced supply in several locations, and Hawaii, where vehicles are ferried in and out by cargo ship, has been one of the most impacted destinations.
Prices for car rentals in the Aloha State have skyrocketed as visitation to the Islands has steadily increased in the first months of 2021, and some desperate travelers have resorted to renting vehicles from U-Haul to meet their transportation needs.
"We have seen a considerable uptick in U-Haul rentals from customers who are visiting the Islands now," Kaleo Alau, the president of the U-Haul Co. in Hawaii, said in a statement. "We realize this demand is occurring when tourists are unable to secure a rental car or they learn that our rental fleet options are more affordable."
The interest from tourists has kept U-Haul's smaller vehicles, like vans and pickup trucks, in high demand, Alau said.
Travel advisors working with Hawaii-bound clients say in some cases they have received quotes of $600 per day for car rentals. Debbie Misajon, who owns and operates the Coconut Traveler agency, said she recently booked a rental car for half a day on Hawaii Island for $230, and before the pandemic in 2019 a typical rate would be $50 for a full day.
"Every call I get these days, my first question is: 'Have you rented a car yet?'" Misajon said. "It used to be you could wait on booking a rental car, but now you have to be way out ahead."
Hotel staff and travel advisors are strongly urging Hawaii travelers to book a rental car as soon as they confirm their travel dates.
Other warm weather locales, such as Arizona, Florida and Puerto Rico,
are also seeing demand for car rentals far outpace supply. The surge in
travelers this spring overwhelmed car rental companies after they moved
to cut costs by selling off large portions of their fleets during the
The vehicle shortage is the result of a confluence of factors triggered by the Covid-19 pandemic. When the pandemic first struck and governments issued stay-at-home orders, car rental companies shed cars from their fleet to keep costs down while travel was at a standstill. Nationwide operators sold more than 750,000 cars in 2020, according to investment bank Jefferies Group, which represents more than a third of the total car rental stock available pre-pandemic. As travel has resumed, the car rental companies have not been able to build back their fleets to keep pace with the demand in popular destinations.
The matter is further complicated by a drop-off in new car production due to a semiconductor shortage also related to a slowdown in manufacturing during the pandemic. During its April earnings report, the Ford Motor Co. announced production for the first quarter was 17% below expectations and could be as much as 50% below previous projections in the second quarter because of the lack of semiconductors.
Car rental company Enterprise said in a statement that it is "working closely with our manufacturing partners … to add vehicles to our fleet to meet the ongoing increase in demand" and is also shifting vehicles from less busy destinations to more popular places.
That process takes more time in Hawaii, where it can take two weeks to send vehicles by cargo ship from California to Oahu.