Car rental rates spike in Houston as demand rises

Date: 6 SEPT 2017posted by Car Rentaledited by WinX

"There's a fine line between supply and demand pricing and gouging," said Neil Abrams. Abrams, president of Abrams Consulting Group Inc., tracks car rental rates. The aftermath of Hurricane Harvey has left Houston with over 30,000 homes destroyed and an estimated of 1 million vehicles destroyed in just the metro area of the city. A million vehicles may not seem as disparaging as the 30,000 homes, but for people trying to rebuild their lives and in Houston where it is a car dependent city, the lack of vehicles is more of a challenge for some people. There are reports where people have a easier time to find a contractor to gouge out their water laden homes than to find a rental vehicle for the time being. And with insurance checks weeks or even months away to replace their hurricane damaged vehicles, car rentals is the most sensible short term solution.

Avis Budget Group Inc.'s website showed compact cars available starting Thursday for $55 if paid in advance or $78 if settled at Hobby Airport, more than double the $36 drivers would be charged at the same counter a month later. Similarly a Chevy Cruze is currently offered at $57 in advance or $123 at the counter in comparison to the $43 if rented a month later. Abrams sees the price spike can be more related to seasonal factors than car rental companies trying to take advantage of tight supply. Prices often climb after Labor Day when business travel spikes and the national average for a weekly car rental spikes to $330 this week from $225 before the holiday. "We're not at the point where they are gouging."

Enterprise, the country's largest car rental company hasn't had any vehicles for retail customers since late last week. The company has been trying to gather vehicles from nearby cities and states and by diverting cars that were about to be sold to used-vehicle auctions. The car rental giant has already moved 4000 vehicles to the area with another 13,000 on the way before the end of the month. Hertz similarly is racing to get more vehicles into the region. The company is sending 15,000 vehicles from other regions, the most the company has ever sent to a location in response to a natural disaster. The company is also offering a reduced rate of $4.99 a day to anyone who will rent a car in a major market and take it one-way to Houston.

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