Madeira is Drowning in Rental Cars
The explosive growth of rent-a-car companies has become a recurring topic, prominently featured in today's headline of Diário de NotÃcias Madeira. The market in Madeira now accommodates 170 operators and has thus tripled in just two years. This exponential growth is raising concerns about the quality of services offered and companies already claim a drop in revenue.
More Than 6 New Rental Car Companies Each Month Since 2022
Just two months ago in October 2023, JM-Madeira reported a significant growth in the number of rental car businesses, reaching a total of 154, with 62 emerging just within the current year. Considering the most recent numbers of Diário, this would mark a substantial increase averaging over 6 new rental car companies every month since the beginning of 2023. According to JM-Madeira, the rapid expansion of the rental car market has led to a decline in revenue for the average rental car company, signaling the need for improved supervision and strategic management in the industry.
Skyrocketing Rental Car Prices in 2023
A contributing factor to this surge may be the exorbitant prices for rental cars during the peak season in Madeira. Some rental car companies are asking for prices as high as 100 euros per day for small-sized economy cars or being sold out. This happened because during the earlier coronavirus pandemic, with rental car companies, having fewer tourists, selling parts of their fleet. So, when tourism picked up again, there were fewer cars available, and more people wanted to rent them, leading to extreme prices. Another contributing factor was the global lack of semiconductors, a problem that is less imminent as of today.
Could Public Transportation be a Solution?
It remains to be seen how the prices will develop this season. But with operators clearly seeing a continued upward trend, prices are likely going to remain at a high level. Perhaps reinforcing public transportation could be a viable solution to this issue. Such a move could alleviate the burden on tourists - given the lack of a real alternative - and subsequently reduce the demand for rental cars.
Picture a simple and convenient public transportation system for tourists, using the VR1 route to take them smoothly from one place to another regularly. Think of an easy-to-use app that shows delays and lets you know if a bus isn't running. This would be a great vision for Madeira and in times of climate change, it would clearly emphasize the beauty and natural environment of the island.
Sources: Diário de NotÃcias Madeira, JM-Madeira
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