A car rental industry executive said business travel is making a comeback, but companies are dealing with vehicle shortages.
During an interview with CNBC’s Jim Cramer, Hertz Chief Executive Stephen Scherr said that business travel is on an upward trend and that international visitors will be returning to the United States as coronavirus-related travel restrictions are lifted.
Although the car rental company reported “earnings and revenues that exceeded expectations” in the first quarter of 2022, officials said it was experiencing restrictions on the supply of new vehicles and inflationary pressures.
Sherr said it could take until 2023 to get enough supply to meet consumption. He also showed that the resumption of business travel is still at an early stage compared to the recent success of tourist travel.
“When that happens, I think there will be a greater need here than what we currently feel, and right now it is a supply and demand problem, which is that the need exceeds the amount of equipment that the industry has, no less than Hertz.”- Sherr told Kramer.
Earlier this week, new research published by Allianz Partners in its Top 10 Summer Cars report found that Americans are once again traveling to major cities. For the past two years, tenants have preferred open roads and open spaces, but popular metropolitan areas are making a comeback.
Also recently, Hertz announced a new global partnership with Swedish electric vehicle manufacturer Polestar to purchase up to 65,000 vehicles over the next five years. The first electric vehicles from Polestar are expected to be available for rental in spring 2022 in Europe and late 2022 in North America and Australia.