Alaska News

Curious Alaska: How is the national shortage of car rentals affecting Alaska?

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Question: How are we impacted by the nationwide shortage of rentals?

Curious Alaska: As Alaska gears up for the summer tourism season, one typical travel essential is in short supply: rental cars.

Nationwide, rental cars are proving hard to find because of a lack of supply and a surge in demand as Americans — bolstered by COVID-19 vaccinations and loosening restrictions — start to travel this summer. And even when cars are available, some renters are being slapped with skyrocketing rates.

When the floodgates open next month, arriving tourists in Alaska may meet a similar fate if they haven’t reserved a car yet.

A crush of demand means Roberta Warner, operations manager at Alaska Tour and Travel, is telling those who haven’t booked a car yet that the company likely won’t be able to help finagle one for them until mid-August.

The company’s reservations team is getting the brunt of what she called “rental car rage” — the frustration people are expressing over not being able to a rent a car for a summer trip to Alaska.

Adding to the rental car demand: People who “would be normally cruising Southeast are looking at Southcentral and Interior — the road system and the rail belt — as their destination and where they’re going to spend their time,” Warner said. She highlighted rail lines and other modes of transit as options that still make Alaska a viable tourism destination this summer.

The lack of cars stems from a mixture of global and local factors, including a shortage of car parts important for manufacturing new vehicles and an intensely seasonal rental car market in the state.

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Alaska has the most seasonal rental car market in the nation, said Gary Zimmerman, vice president at Floyd and Sons Inc. which operates Thrifty Car Rental and Dollar Rent-a-Car as well as Hertz Anchorage and Seward locations.

“It’s literally June 1, you turn the spigot and here come the tourists,” Zimmerman said. “From Memorial Day to Labor Day. And then on Labor Day, that spigot gets turned off.”

The company increases its fleet in the summer and then cuts down the fleet of rental cars in the winter by selling them off, Zimmerman said. Their fleet was at its seasonal low when the pandemic hit last March, and they canceled several cars they had on order for the approaching 2020 summer months.

After running a small fleet of rental cars last summer, they placed orders for new cars in anticipation of summer 2021. But a few months ago, car manufacturers began notifying the business that their orders had been canceled due to a computer chip shortage.

The order cancellations — when coupled with already smaller fleets and a sudden uptick in tourism demand — have created a perfect storm of sorts.

“We had to contract because we had to survive,” said Carrigan Grigsby, director of sales at Avis Alaska.

No company is ever completely out of cars, Grigsby said. But they’re at either what’s called a plus or minus fleet, meaning the net available units. For June, July and August, the company is at a minus fleet, he said.

“It basically means we have more reservations than we have people that we have cars for,” Grigsby said.

That’s because people often book cars at a few different companies since rental cars don’t need a credit card in advance. So, companies factor in a certain number of no-shows.

To be sure, it’s usually busy in the summer months. But there are much fewer cars available this year.

Not all of the purchased cars that they were able to get ahold of have arrived yet, Grigsby said, which means things might open a bit — but only for a few hours, not days.

Grigsby said that if you already have a reservation in place for this summer, you should assume you’ll get the car. You might have to wait an hour, but you’ll likely get it.

But if travelers haven’t made reservations yet, he had some advice: “Make one today.”

Warner, with Alaska Tour and Travel, said there are some 4x4s and premium cars available for driving to places “off the beaten path” like the town of McCarthy, accessible via a gravelly road, but they can come with a shockingly high price tag. And even those cars are starting to disappear.

If travelers don’t have to come to Alaska in June, they might try instead for the equally beautiful Alaska in August. Flexibility helps.

“It doesn’t mean that there won’t be cars available, but it’ll be very slim pickings and it will be at the highest rate possible,” Grigsby said. “It’s just how it works. It’s a supply and demand game.”

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