Monday, 1st March 2010

OVER €100M WILL BE LOST TO ECONOMY DUE TO LACK OF CARS AVAILABLE FOR HIRE
50% Reduction in Cars for Hire Compared to 2008

The Irish tourism sector stands to lose revenues of over €100 milion in 2010, and the hotel industry over €30million, due to a severe shortage of cars for hire by overseas visitors. Over 400 delegates at the Irish Hotels Federation’s (IHF) Annual Conference heard today that there will be less than half the number of hire cars available in Ireland during the coming summer as compared with 2008. Mr John Power, Chief Executive of the IHF, states that the issue has arisen due to a national downturn in used car sales and the benefits of the recently announced scrappage scheme not being available to qualifying purchasers of 2010 registered ex-rental cars bought during this year. The IHF is calling on the Government to address this situation and permit these vehicles to qualify.

According to Mr Power, the lack of cars will also result in an unacceptable distortion in the car-hire market, with prices becoming prohibitively expensive. He states that, should half of the visitors who require a car hire during the peak summer season decide to cancel or change their destination because they cannot secure a vehicle or are unhappy with the costs with hiring the vehicle, the revenue loss to the economy would be in excess of €100 million.

Normally a large proportion of ex-rental cars are sold back to the motor trade at the end of the summer tourist season and then go on sale to the public. However, given the decline in the car market and the fact that 2010 rental cars do not qualify for the national scrappage scheme, there will be a very weak market for these cars. As a result, only 12,500 hire cars will be available for the 2010 peak tourist season compared with 17,500 in 2009 and 28,000 in 2008.

Mr. Power, states, “We expect that at peak of the 2010 season, the car hire fleet requirement is likely to be in the region of 23,000 vehicles. That represents a shortfall of 10,000 this summer. The lack of cars will also mean prices will rise during that period and make a trip to Ireland more expensive and uncompetitive when compared to other destinations,” says John Power. This is also erodes the marketing efforts of other tourism service providers such as hotels, guesthouses and airlines who are offering very competitive prices. This avoidable increased expense in holidaying in Ireland will seriously undermine our competiveness at this important time as we strive to rebuild tourism on the back of substantially reduced prices across Ireland’s tourism offering.

“The projected shortage in cars for hire is an avoidable barrier to the recovery in Irish tourism, particularly in attracting the American market. We need to do everything we can to attract visitors to Ireland – not create unnecessary barriers that discourage people from holidaying here. Cost is a significant factor in today’s competitive market, and any increase in car hire fees will only impede a valuable segment of the market that we should be trying to grow. This is particularly detrimental at a time when hotels have dropped room rates by 20% throughout Ireland.”

Mr. Power calls on the Government to extend the recently announced scrappage scheme to permit cars to be traded in a car against the purchase of a 2010 registered ex-rental vehicle. The effect of this change would have no impact or cost to the exchequer or tax payer but would be of enormous benefit to car hire companies in attempting to maintain their fleet for the peak tourist season.

Estimates of Total Fleet at Peak

Source: Car Rental Council of Ireland

FOR INFORMATION:

Siobhan Molloy / Eoin Quinn             Dublin office: 01 6760168
Weber Shandwick                            Mobile: 086 817 5066 / 087 233 2191