Sky-high car rental fees are already scuttling tourist plans for this summer, inn owner says
Luke Fisher is the owner of Fishers' Loft, a hospitality business in Port Rexton. He says the lack of rental car options and their costs are causing him to lose business. (CBC)
A hospitality business in eastern Newfoundland has received cancellations long before the summer even started, because guests couldn't find an affordable way to get there.
Luke Fisher, owner of Fishers' Loft in Port Rexton, says operators see the same scenario play out every year.
"We had a family that were coming and they had to cancel because they had no idea of the cost [of a rental car]," Fisher said.
He says many of the cancellations are from people who booked, expecting to find an affordable rental — and often customers find they can cannot rent anything at all.
CBC News checked the prices of renting a car from the St. John's airport for one week in July. The range for available rentals was between $1,300 and $2,900.
"It's sort of disheartening. The smaller businesses in rural areas are the ones that's going to suffer from this the most and it affects everybody," said Fisher, whose family has been running the inn since the 1990s.
WATCH | They booked their flights, and wrongly assumed they can rent a car, says this business owner:
A bus service runs to the town once a day, but there are no taxi services, Fisher said.
He says the provincial government should have a "sit down" with the rental companies to reach a solution.
Why so expensive?
Craig Hirota, vice-president of the Associated Canadian Car Rental Operators, says the high prices at the peak of summer are due to available vehicle supply.
Car manufacturers prioritize new vehicles to retail customers, he says.
"Some manufacturers actually prohibit their dealers from selling to fleet customers because they don't want those vehicles diverted from the retail demand," he told Here & Now.
Craig Hirota works with the Associated Canadian Car Rental Operators. He says the costs of rental vehicles are high because of low supply and the added costs shipment of cars into the island. (CBC)
Running a rental car fleet on an island is especially challenging since rental companies have to pay for shipment to the island and plan to the tourism season that often lasts only a few months in a year.
"You've either got to be able to get vehicles on and off the island affordably…that cost of ingress and egress of the fleet vehicles is going to be included in the rate," Hirota said.
There have been ongoing conversations with the provincial government and rental car businesses, he says, since 2006 to try and change the auto insurance to be the same as in provinces like Ontario, Alberta and Nova Scotia.
Currently, registered owners of vehicles in Newfoundland and Labrador are vicariously liable for anything a driver does to an "unlimited level," Hirota says.
In the three other provinces, the liability is capped to $1 million and if a renter has their own auto insurance, that policy will respond first, therefore giving some shield to car rental companies.
"Anything that that makes it easier to operate in Newfoundland will will help encourage greater business development."
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