Rent a car companies have disposed of 70% of their cars

At the moment, the almost 300 car rental companies operating in the archipelago are just trying to survive even though they are facing a second year of no tourists and financial losses. Many are supported by ERTEs and ICO loans, and in total the 'rent a car' sector have disposed of 70% of their fleet in the last year in order to control costs.

This offload has allowed most of the companies to breath more easily and continue in these extraordinary times, but some of the smaller ones have already made closed and others are at the limit.

Of the estimated 82,000 rental vehicles in circulation on the islands before the pandemic broke out, rental companies have kept approximately 30%, around 24,000 units, a figure which represents a return to levels of 36 years ago, to 1985.

The other 70% have been sold, more than half outside the archipelago and the rest, as used vehicles within the Canary Islands, at very attractive prices, according to Roberto Dávila, the CEO of Avis and Secretary General of the Association of Canary Islands Vehicle Rental Companies (AECAV), which integrates the large rent a car companies.

Of the 24,000 vehicles that 'rent a car' companies still have in the islands, 5,000 are out of circulation, in different warehouses and storage facilities waiting for tourist reactivation. These vehicles have not been put on sale because they are brand new. Some arrived on the island just days before the state of alarm and have never been driven.

There are also around 19,000 ‘active’ vehicles, which are in demand for corporate rental and by garage workshops as replacement and courtesy cars. They are now its main clients after Covid has emptied the Canary Islands of tourists. With them, the 'rent a car' businesses hardly have any income.

In 2020, the sector had a turnover of around 230 million euros, almost 700 million less than a year earlier when they amounted to over 900 million euros. This turnover was sustained in the months of January, February and mid-March, when the tourism sector operated at full capacity, and before Covid broke into our lives.

For this year, 2021, the sector is not too optimistic and expects income similar to that of the previous year on the basis of a tourist reactivation starting in October and November, in the last three months of the year. “We only realistically have the last quarter of the year. If the conditions are met, we think it could be very good, but in the summer we have little hope because there will be fierce competition between all destinations,” says Dávila.

In his opinion, if there is vaccination and mobility is reactivated, the tourist rebound that the Canary Islands will experience will be a "boom" at the end of the year.

Facing the planning of 'car rentals' to respond to that 'boom' in tourist demand, that could occur at the end of 2021, Dávila says that the first signs will arrive in summer. As he explains, if the conditions are met and in the summer the "opening" occurs and from there, sustained growth, in July and August, reservations will begin to be made for September, October and November en masse.

Dávila says that the Balearic Islands are a barometer today, of what can happen in the Canary Islands. Since the Iberian archipelago was opened to German travel, car rental reservations have exploded. "In the Canary Islands the same situation may occur," says the secretary of AECAV.