Business

‘Carmageddon’ Crashes Into Big Island, as Rental Industry Swallowed by Mass Demand

By Max Dible
March 29, 2021, 7:00 PM HST
* Updated March 30, 5:48 AM
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Anyone on the hunt for a rental car in Hawai´i is in for a disappointing month. At least.

Multiple rental companies stationed at the Ellison Onizuka Kona International Airport at Keāhole, including Enterprise and Budget, say they’re sold out through April. Local rental service, Joe’s Big Island Jeep Rental, will not have any inventory to offer until May. Most of that is likely to be reserved within a matter of days, and the same goes for June. The popular vehicle rental app, TURO, had zero listings available anywhere on the Big Island Monday, March 29. The Thursday prior, the app listed two cars for rent — at rates between $349 and $399 per day.

PC: Max Dible

Desperate tourists and visiting relatives have taken to renting U-HAUL trucks as a way to transverse the Big Island, while a cottage industry of entrepreneurs has sprouted up to offer rides and rentals at premium prices.

Those familiar with the industry, both nationally and as it pertains specifically to Hawai´i, said a confluence of events is responsible for the vehicle shortage that is upending vacations and pushing rental prices across the state.

Catalysts Behind “Carmageddon”

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The underlying issues that created the crisis are — like so many others during these tumultuous times — rooted in the COVID-19 pandemic.

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Auto sales plummeted nationwide. Forces of supply and demand, along with lockdown orders and social distancing requirements, led to factory closures and lower production. Almost all non-essential travel to Hawai´i was banned and people across the world rescheduled or cancelled planned vacations to pretty much everywhere.

Rental companies endured tremendous losses as one reservation after another was deleted and cars sat unused on lots in every state in the nation. The first move was a massive selloff of inventory.

But the real problem is not how quickly auto sales totals dropped and rental inventories were subsequently sold to the general public. It is how quickly auto sales and production demand have recovered.

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“We do have some cars that we are buying, and (we are) moving some cars around,” said Tyler Yoshikawa, assistant branch rental manager at the KOA Enterprise Rent-a-Car location. “It will take a little while. It is kind of a slow process.”

Part of what has made the process slower is a shift in electronics manufacturing, namely in the production of semiconductors (computer chips) used in standard vehicles built internationally from Europe to North America to Japan.

CNN Business released a report in January that electronics manufacturers shifted semiconductor production resources toward companies that sell items such as smartphones, tablets and videogame devices — all of which boomed during the pandemic, while auto sales fell quickly in the opposite direction.

Image courtesy of Ford Motor Company.

The report noted that between 50 and 150 of the computer chips are used in most vehicles, and manufacturers have said it will be several months before they can provide a supply of semiconductors sufficient to meet auto industry demand. Some projections have estimated the chip shortage will deplete global vehicle output by upwards of 4% over that time period, which is making it more difficult for rental companies to replenish their fleets.

Island Issues

The above is the macro version of the problem, and it has unquestionably impacted Hawai´i. However, local issues within the industry have exacerbated the vehicle shortage to an even greater extent.

Namely, car rental companies shifted inventory they did not sell back to the mainland where it could create more value. But in much the same way that electronics manufacturers did not accurately project how quickly auto industry demand would return, Hawai´i car rental companies did not project how furiously tourism would return to the state beginning with Spring Break holidays over the last month.

“We got rid of about two-thirds of the fleet during COVID because cars depreciate, and they were losing a ton of money every day sitting on the lot,” Yoshikawa said. “We did not expect tourism to blow out like the way it did in March. It was not only here in Kona but Maui, O´ahu, California, (a lot of) places.”

To the rental companies’ credit, no one in the state predicted visitors would return with such a flurry so soon. The State Department of Business, Economic Development, and Tourism registered more than 18,000 arrivals to the Hawaiian Islands on 15 separate days through the first four weeks of March. That tally includes returning residents, airline workers and new arrivals planning to live in the state.

Still, arrival totals approached or surpassed 50% of the daily tallies registered in March 2019, which was one year prior to the pandemic, nearly every single day over the last month. March 2021 totals also doubled, or nearly doubled, arrival rates on most days in the prior month of February 2021.

Economists have predicted an economic boom as vaccine distribution swells and COVID-19 infections wane nationwide, but the Centers for Disease Control and Prevention has reported that only around 15% of the United States population (about 51 million people) had been fully vaccinated as of Monday, March 29.

Local businesses projected early summer would be the time when tourism began to swell, while Hawai´i Governor David Ige projected a “return to normal” by mid- to late-summer with the arrival of a vaccine passport program not scheduled for deployment until May, at the earliest.

Joe Webster, of Joe’s Big Island Jeep Rental, has 25 vehicles in his fleet, some of which are now being reserved up to a year in advance. He stopped answering his phone around March 1, and shut the phone system off approximately one week later, opting instead to simply communicate by voicemail due to the overwhelming demand.

Webster on Monday offered a working theory on the Big Island’s (and the entire state’s) version of Carmageddon.

“I believe there was this backlog of people who wanted to come to Hawai´i for six or eight or 12 months. People were putting weddings off,” he said. “Now, lines of people coming out. And all the people who had plans to go to Italy, France, or Spain, they’re coming to Hawai´i because people are still (nervous about leaving the country).”

A Trying Trip to the Big Island

Traci Thompson was a day away from the Big Island when she started growing nervous.

Her family of four, visiting from Lubbock, Texas, flew into O´ahu on Saturday, March 13, with plans to zip over to the Big Island the following Wednesday. They had not pre-booked a vehicle because they were told renting a car in Kona was typically a simple endeavor.

Big Island Now stock photo. Feb. 2017.

However, they began to catch wind Tuesday that they may run into transportation problems upon their arrival. Thompson said her husband started by calling the national rental companies, those with options at the airport, but to no avail.

Then they began inquiring with the local, mom-and-pop shops. No cigar.

The Thompsons then checked TURO. Sold out.

Craigslist. A barren wasteland.

“By Wednesday, we were starting to panic trying to figure out what are we going to do,” she said.

Eventually, Traci resorted to Facebook and came across MoveToHawaii365.com, a local website/blog where others were discussing similar difficulties procuring a rental car and searching for answers. Thompson did not find a vehicle there, but she found something else — a ride to the other side of the island.

The Thompson family paid a Big Island resident to drive them on a waterfall tour through Hilo, a kindness and willingness Traci said salvaged the entire trip.

“Our plan on Wednesday was to get the rental car at the airport knowing we were going to arrive early, and go hit a couple spots within Kona we knew we could drive to,” she said. “Instead we were stuck at the hotel, where there’s stuff to do but not what we wanted to do.”

“I think we got extremely lucky,” Thompson continued. “We would have had to just spend the whole time at the hotel and not see the island, which is the whole point of being here. The beaches, the waterfalls, getting to experience Hilo and the rainforest. It would have made visiting the Big Island not worth it (if we hadn’t gotten the ride).”

Alternative Options Arising

Not everyone is liable to be so lucky, Webster explained. He said early in March he referred those who asked to private citizens he knew who had extra vehicles to rent. When that supply was exhausted, he heard a few cars were available in Hilo.

He told the next batch of inquirers, most of whom were arriving on the leeward side at KOA, that their best option was to pay an UBER or a taxi $300 for a ride to a Hilo rental center and grab a car that way. After a few days, those inventories were spent, as well.

Thompson noted that reaching out to tour companies several days or weeks in advance could also prove at least a temporary solution. She said Hawai´i Geo Tours had an open slot and customized a trip for her family, which included a trip to Volcano and star gazing after a few stops in Kailua-Kona. However, she surmised the customization was likely only possible because the Thompson’s happened to be the only people attending that particular tour.

The last option for those in search of a car is simply to scour social media for singular opportunities.

PC: Pixabay

Big Island resident Tommy Worden purchased a second personal vehicle after spending weeks watching his friends get what he described as “price gouged” by opportunists both in the industry and those operating privately on rental apps or social media pages.

“I had a lot of friends visiting, and they could get rentals until a few weeks ago,” Worden said. “But even when you can get them, it’s obscene — $270 for a sedan. I heard quotes of $400-plus a day.”

Worden said his original intention was to purchase a second vehicle other than his jeep to drive when necessary, and then to rent it out at reasonable rates to people who he knew were in need of transportation.

Only seven hours after listing the vehicle on Facebook and advertising it as available only to “friends & friends of friends,” he had already booked it out for two months, with others reserving the car for a week here or a few days there much later in the year.

“I get it, make your money,” Worden said of people who are trying to capitalize on the current situation, “but you don’t have to take advantage of people during a pandemic.”

Max Dible
Max Dible is the News Director for both Big Island Now and Kauai Now. He also serves as News Director for Pacific Media Group's Hawai‘i Island family of radio stations.
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