The tourism sector has numerous intertwined subsectors, with the performance of each critical to the performance of the other. The car rental is critical to the success of the tourism industry, yet it remains under, and thus there is limited knowledge on how the previous pandemic impacted the car rentals industry. This study examines the impact of COVID-19 on the car rental as well as ride and share transport niches of the tourism industry. Making use of secondary and archival data, the study found that the two subsectors lost revenue amounting to billions of dollars in potential revenue during the COVID-19 pandemic. The pandemic resulted in company rating downgrades, market volatility and loss of share value for leading entities such as Hertz, Avis, Europcar, Uber and Lyft. However, the impact of the pandemic on ride and share transport was moderate compared to car rentals. The pandemic led to Hertz filing for bankruptcy, albeit after paying US$16 million in retention bonuses on the eve of bankruptcy to its executives. Losses led to various cost-containment measures, which saw a record number of employees being laid off and disposal of non-core assets. The chapter recommends a robust, coordinated health and safety certification and protocol for the industry to ensure the safety of passengers and employees to boost confidence in the sector as it emerges from the pandemic. Furthermore, a call is made to revisit employment conditions in this sector with the view to provide better protection of employees from the COVID-19 and other disaster-related market shocks. A revision of the current business model is imperative, given the vulnerability of the sector to shock to ensure disaster resilience. Impact assessment post the pandemic will be critical to get a full picture of the impact, particularly on small businesses that were not covered in this study.
- Car rental
- Ride and share
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Nhamo, G., Dube, K., Chikodzi, D. (2020). Impact of COVID-19 on Global Car Rental Industry and Ride and Share Transport Services. In: Counting the Cost of COVID-19 on the Global Tourism Industry. Springer, Cham. https://doi.org/10.1007/978-3-030-56231-1_7
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