THE DEPARTMENT of Arts, Sport and Tourism is hopeful the car hire sector will show restraint and not increase rates because of shortages in the State’s car rental fleet during this summer’s peak tourist season.
Representatives of the tourism sector, which is hoping to rebound from a drop of almost one million visitors in 2009, have told The Irish Timesthat inadequacies in the rental car fleet could cost the State as much as €260 million through lost bookings and do serious damage to Ireland's reputation as a tourist destination.
The fleet has contracted from about 30,000 cars in 2006 to 12,500 this year and an alliance of tourism groups including the Irish Tourist Industry Confederation (ITIC) and the Car Rental Council of Ireland (CRCI) say the issue could undermine the value available here in accommodation and access transport during the peak months of July and August.
About one third of visitors to Ireland rent cars, rising to 42 per cent among North Americans, who also have trouble sourcing vehicles with automatic transmission. The shortage is being driven by changes to a VRT rebate system which the CRCI said turned car dealers away from doing short-term deals with rental companies.
It is likely to be exacerbated by the new scrappage scheme, included in the Finance Bill, as people are more likely to purchase new rather than ex-rental vehicles. As a result, the number of rental cars available has decreased and rental prices are spiking at times of heavy demand.
“Any commodity that becomes scarce becomes expensive,” said Eamonn McKeon of the ITIC.
“It’s not just an Irish problem . . . there are peak period problems in many countries but it’s being exacerbated here by the shortage, particularly in the automatic area where there is little demand for used cars, so that means the economics of putting an automatic car on the fleet is not logical now.”
One American visitor contacted The Irish Timesto say he rented a car at Shannon airport when visiting at Christmas and "paid what I could have bought a decent used car for" in New York.
A spokeswoman for Minister for Arts, Sport and Tourism Martin Cullen said he was concerned about a shortage of rental cars. She said Mr Cullen had “asked the Minister for Finance, Brian Lenihan, on a number of occasions both before and since the Budget, to examine the possibility of allowing ex-rental cars first registered in 2010 to qualify for the scrappage scheme”.
Fine Gael tourism spokeswoman Olivia Mitchell has proposed two amendments to the Finance Bill. Both were rejected by Mr Lenihan.
