Kgamanyane Maphologela
11 October 2001
analysis
THE day terrorists attacked the US, most airports closed and stranded passengers drove cars off rental lots across the country. However, few days later, the rental car business seems to be hard hit as well.
This is because fewer air travellers mean fewer car rentals. A substantial part of car rental activity happens at airports, and it is expected that there will be a drop in international activity. SA will not be immune to the fallout.
While it is still too early to quantify the immediate effect of the crisis on the SA market, positive and negative results could be expected.
On the positive side, SA's inbound tourism might increase with travellers considering Africa as an alternative safe heaven for the coming summer holidays.
If the bombings, hostility, and military strikes continue between the US, Afghanistan and the Middle East, travel agencies are likely to encourage their clients to switch their travel arrangements to Africa and the Antipodes.
Budget Rent-A-Car MD Nigel Webb says, however, it is too soon to draw such conclusions because the full extend of the crisis is still not known.
"Our international season starts from November 1. Airline travel is estimated to have fallen 29%. Although we expect growth in inbound tourism, SA has a problem of seat capacity given the withdrawal of major international airlines. Before the US bombings, SA had insufficient capacity to bring international travellers," he said.
On the negative side, business travel has shown some signs of strain. Airlines generate most of their business from corporate travel, which dropped off after the attacks.
Budget's volumes from corporate business were flat compared with last year, making it difficult to quantify the effect of the attacks, the company said.
Hertz sales and marketing director Lynette Botterill says her company's corporate business has been affected strongly, since it is a US company.
She said the corporate business has seen a general negative slowdown, with a decrease in business people travelling between the US, UK and SA.
"The leisure business, which traditionally has never been a good market, will see signs of growth with tour operators selling SA as a possible destination. This could be a potential for new business," she said.
Avis Southern Africa says its car rental operations in Africa and Scandinavia had been affected marginally. The company says car rental business appeared to be heading for a normal high season and had not noticed a significant cancellation trend.
It says inbound travel accounts for about 40% of Avis SA's business over the high season, with the bulk from the UK and Europe. Travel between these destinations and SA has not been markedly affected. Although Americans are flying less, they make up less than 2% of Avis's inbound market. In Scandinavia, the Swedish business has noticed some cancellations, though not at a level that will have any real effect on volumes.
Imperial executive chairwoman of car rental and tourism, Carol Scott, says her company was not directly affected by the attacks. She says Imperial's corporate market remains strong.
"Our brand, which services the inbound international market, grew 29% in number of rentals in September. Our market is mainly Europe and the UK and most Europeans are still travelling. Our forward reservations for December in Cape Town are up 26%," she said.
If the problem continues, companies might be forced to consider cutting their fleets, which would be a blow to motor manufacturers.
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