Spurred by strong demand, particularly in the leisure segment, and lingering supply-chain issues, car rental rates in the U.S. and Canada are set to increase 5 percent year over year in the 12-month period ending in March 2024, according to a new forecast by American Express Global Business Travel.
The travel management company projects similar car rental rate hikes in other areas of the world during that time period, including 7 percent in Germany, 6.5 percent in the United Kingdom, 5 percent in France, 6 percent in Argentina and 5.5 percent in Brazil. Smaller projected increases include 2 percent in Australia, 1 percent in the Nordic countries and 1 percent in Chile. Amex GBT projects rates in Mexico and South Africa to hold steady and said it didn't have enough data to issue forecasts for China and India.
The TMC in its "Ground Monitor 2023-24" report, released Monday, suggested there would be regional pricing variances within countries and prices could moderate during the second half of the period.
"2023 looks like it will be a tale of two parts, pricewise. For most of this year, rental prices appear likely to continue to follow the rising trajectory set in 2022," according to Amex GBT. "As automotive production returns, and rental fleets recover, price rises should stabilize from late 2023 into 2024."
The TMC noted "modest" economic growth for North America during the period was forecast by the International Monetary Fund, and suggested that car rental supply-chain issues, including those surrounding the manufacture of semiconductors, would continue to ease.
"It is unlikely that prices will return to 2019 levels," according to Amex GBT. "Cars are evolving to become smarter; as they do so, they're more expensive to buy, maintain, and insure."
Amex GBT said it used a forecasting model with pricing data "extracted from Amex GBT's data lake," along with other information, including inflation, gross domestic product, unemployment and oil prices.