When James Charles-Roberts booked a vehicle back in May, he and his family were looking forward to a two-week holiday in Southern California.
After several attempts to visit Disneyland were thwarted by the COVID-19 pandemic, the November vacation would be a chance for the Victoria, B.C., family to use their theme park tickets before they expire.
However, when Charles-Roberts called in June to move his reservation for a seven-passenger Ford Explorer by a day, the cost of the car rental nearly tripled.
“I booked the vehicle for $480 and when I called to make a change the price was $1,286,” he said in an interview. “It was just a minor change so we decided to keep our first reservation.”
The car rental shortage — or “carpocalypse” as it’s been dubbed in the U.S. — highlights what is expected to be a bumpy economic recovery as supply chain issues throw car rental supply and demand out of whack.
The problem started when nearly all travel was halted at the outset of COVID-19 lockdowns and travel restrictions.
Car rental reservations plummeted, prompting companies to drastically downsize fleets and lay off workers.
“Most if not all car rental operators across the world had to reduce their fleets significantly during the pandemic due to extreme reductions in consumer demand,” said Craig Hirota, vice-president of government relations and member services with the Associated Canadian Car Rental Operators.
“Nobody was travelling for vacation and corporate travel was basically non-existent. It left a lot of unused vehicles sitting on lots.”
Lots of demand
Now, the situation has reversed. As the economy reopens and demand returns, a global shortage of semiconductors has crippled vehicle production and caused lengthy delays for new cars and trucks.
“The car rental industry has not been able to resupply their fleets,” Hirota said. “They just can’t get vehicles.”
Enterprise Holdings, the U.S. parent company of Enterprise Rent-A-Car, National Car Rental and Alamo Rent A Car, said the chip shortage “has impacted new vehicle availability and deliveries across the industry at a time when demand is already high.”
The company added in an emailed statement that it’s “working hard to secure additional vehicles to meet the increasing travel demand and support customers’ broader transportation needs.”
Prices skyrocketing for what’s left
In the meantime, car rental operators are jacking up rates amid the tight supply and increasing demand.
“I think there’s some price-gouging going on for sure,” Charles-Roberts said of his experience trying to change his Los Angeles airport vehicle reservation.
The industry-wide car rental crunch is already in full force in the United States, where stories are emerging of tourists renting U-Haul moving vans or private vehicles from locals to get around.
Car rental companies slashed their fleets when demand plummeted in 2020, and now they can’t ramp up fast enough to keep up with demand. (Charles Platiau/Reuters)
The problem is expected to worsen in Canada this summer, especially in regions that rely heavily on tourism.
Many airport locations in East Coast cities like Halifax, Charlottetown and St. John’s are nearly sold out on weekends this summer.
“The impact is being felt everywhere — at least in hot tourism spots across Canada and the U.S.,” Gary Howard, senior vice-president of marketing and communications with CAA Atlantic, said in an email.
“Most of the fleets are leased so during the high point of COVID, fleets were shrinking,” he said. “Now it is coming back but the car rental companies cannot get enough vehicles back in the fleets.”
While the car rental shortage is expected to be felt more acutely in tourism destinations, prices are up across the country.
Hamilton resident Allyson Rowley said she often rents cars for long-distance travel and to visit family.
In 2019, she said she usually paid about $30 a day, an amount that climbed to about $40 in 2020. But Rowley said she just booked a car for two weeks in August, and the price was $61.52 a day.
“The cost has doubled since before the pandemic,” she said. “I’ve made an ethical and financial choice to not own a car as I mostly walk and bike and only rent a car when I need one, but it’s becoming unaffordable.”
For travellers hoping to rent a car this summer, experts say it’s critical to book early, search beyond airport locations and be prepared to pay more than usual.
It may also require alternatives to car rentals such as car sharing or public transportation as they say the shortage isn’t expected to ease up any time soon.
“If you’re planning travel, we encourage you to reserve a vehicle as early as possible,” Enterprise Holdings said. “Providing flexible travel dates and branch pickup locations in your search may help increase your options.”
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
