A car rental industry executive said there is a business travel comeback taking place, but companies are dealing with a lack of vehicles.
During an interview with CNBC’s Jim Cramer , Hertz chief executive officer Stephen Scherr said that business travel is “trending upwards” and that international visitors will return to the United States as more coronavirus-related travel restrictions are lifted.
While the car rental company reported “better-than-expected earnings and revenue” in the first quarter of 2022, officials said it was experiencing constraints on the supply of new vehicles and inflationary cost pressures.
Scherr said the issues with obtaining enough supply to meet demand could last into 2023. He also revealed the rebound of business travel is still in its early stages compared to the recent success of leisure travel.
“When that happens, I think there’s more demand here then what we’re experiencing right now, and right now, this is a demand-supply issue, which is demand is outstripping the amount of fleet that the industry, no less Hertz, has,” Scherr told Cramer.
Earlier this week, new research released by Allianz Partners in its Top 10 Summer Rental Car Report showed that Americans are traveling to big cities again. Over the last two years, the open road and open spaces were preferred by renters, but top metropolitan destinations are making a comeback.
Hertz also recently announced a new global partnership with Swedish electric car manufacturer Polestar that includes the purchase of up to 65,000 vehicles over the next five years. The first electric vehicles from Polestar are expected to be available for rent in Spring 2022 in Europe and late 2022 in North America and Australia.