The Hertz CEO says a rebound in business travel could tighten up an already tight used car market.
Business travel is making a comeback and could limit already limited rental car supplies when the situation finally recovers, Hertz chief executive Steven Scherr told CNBC’s Jim Cramer on Thursday.
“Corporate business is on a growth trend, make no mistake. I’m sure this will start to come back and I think visitors from outside the US will start to come back after some of the Covid restrictions are fully relaxed. actually on the spot,” Scherr told Mad Money.
“When this happens, I think the demand here is greater than what we are experiencing right now, and right now it is a supply and demand issue, that is, demand exceeds the amount of fleet that the industry has, no less than Hertz. ,” he added.
Hertz reported higher-than-expected earnings and earnings in the latest quarter, according to StreetAccount.
The car rental company said in its quarterly earnings report that it is “experiencing restrictions on the supply of new vehicles as well as some inflationary cost pressures” and that problems in getting enough supply to meet demand could persist until 2023.
However, according to Sherr, the recovery of business travel is still at an early stage compared to leisure travel.
“If you just factor out the demand, it turns out that the number of leisure travelers has increased by more than 90 percent compared to 2019. Business or corporate travel – only 63 percent. And … travelers from other countries, that is, people who come from Europe or Asia to the United States – only 35 percent. back,” he said.
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