Car hire and the strangeness of the post-pandemic economy

A global shortage of hire cars and unusually high hotel occupancy rates sum up the post-pandemic global economy in a nutshell, says Merryn Somerset Webb, with enhanced demand meeting restricted supply.

Avis car hire queue
Good luck hiring a car this summer
(Image credit: © Getty Images)

I wonder if you have finished making your summer holiday plans yet? If you have not you might want to get going – particularly if you think you might need a hire car. In the summer of 2019 you would have been able to rent a normal family car for around £310 a week. Try and get your hands on the same this year (good luck to you) and it will cost you more like £652. Over double. Why?

The answer is more interesting than you think – this is the post-pandemic global economy in a nutshell. When the lockdowns began, the car-hire business pretty much shut down globally – and car-hire firms, keen to raise cash and cut costs, sold down their fleets (often at very low prices). At the time, they presumably assumed that when demand returned, there would be no supply problem – and they would rebuild those fleets cheaply (car manufacturers have a history of giving the rental agencies huge discounts anyway).

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.