A rental car shortage is forcing some travelers to reconsider their trips to Alaska

Cheapwheels Rent-A-Car. (Abbey Collins/Alaska Public Media)

John Nguyen lives in Dallas, and he wants to visit Alaska in July.

So he booked his flight to Anchorage. Then, last week, he went looking for a rental car on Expedia.com.  

“I type in my dates and whatever, they just show me all of the cars available for each company,” said Nguyen. “There’s like none right now.” 

Well, almost none.

“They have a manager’s special,” Nguyen said. “And then they told me the manager’s special is like $2,500 or something like that. It was outrageous — at least over two grand for six days of rental.”  

It’s a pattern frustrating travelers across the country: Rental car companies sold big chunks of their vehicle fleets last year when the pandemic crushed demand. But now, more people want to travel, and fewer rental cars in service means skyrocketing prices.

In Alaska, the problem could be particularly acute this summer. The tourism industry is expecting to see a lot of travelers, especially compared to last year. And, with COVID restrictions still barring large cruise ships from Alaska waters, more travelers are expected to come by plane, and many of them will need a car to rent.

Already, by mid-May, Alaska’s smaller supply of rental cars and higher demand was leading to shortages, higher prices and even canceled trips.

Nathan Speer is co-owner of Cheapwheels Rent-A-Car in Anchorage, and his fleet of rental cars is already completely booked until the end of August. He’s finding some people are also willing to pay much more for a rental this year.

“In 17 years of business, we’ve never gotten more than $100 a day for compact,” he said. “And I have some compacts that are reserved now for almost $300 a day, because I’m still cheaper than the airport.”

Speer said he’s had to raise prices by about 50% so his business could survive the summer. He sold half of the company’s cars last year to stay afloat. Now, he has just 38 rental cars left, and it’s hard to find more to buy. 

In an emailed statement, a spokesperson for the national rental company Enterprise said they’re feeling the strain too. A global computer chip shortage is impacting vehicle availability across the industry. 

In Alaska, Speer said the issue could have widespread impacts.

“I just talked to one of my friends down in the Kenai Peninsula, who owns a fishing charter lodge, and he’s having people cancel reservations for the fishing,” Speer said. “Because even though they’ve booked plane tickets and booked fishing reservations, they can’t get a rental car. So there’s no way for them to get down to the fishing spot.”

Some business owners are more optimistic, like Brendan Ryan. Ryan is co-owner of the Seward tour companies Liquid Adventures and Exit Glacier Guides, as well as a part owner of the Seward Outdoor Store.  

“Seward is kind of well-positioned, because we’ve got the train and we’ve got several different really nice bus lines that come down here regularly, several times a day,” Ryan said. “So there’s already the infrastructure getting people down here.”

So far this year, Ryan said, the number of people pre-booking tours is through the roof — possibly the best ever. He’s heard from customers who are restructuring their trips to spend even more time in Seward, because of the rental car shortage. 

“They were going to spend two to three days in Seward and then take off and go somewhere else,” he said. “But that rental car was going to cost them $2,500 for that week. So they’ve now restructured their plans to spend pretty much the entire time between Anchorage and Seward.”

Jack Bonney, community engagement director at Visit Anchorage, is similarly hopeful. 

“I’m encouraged in that we do have the kind of road and motorcoach and rail travel and small aircraft travel that allows us to put together multi-destination stops within Alaska very easily any year,” said Bonney. “So we kind of have a built-in capacity to meet this challenge in a way that I can’t imagine many other destinations are set up to do.”

Bonney said Visit Anchorage is working to make sure travelers know their options for transportation if they’re struggling to find a rental car.

But he wants Alaskans to know the surging demand for vehicles doesn’t mean the tourism industry has recovered from the pandemic. 

“Balancing the idea that there is a bit of a capacity crunch for rental cars doesn’t mean that we’re necessarily going to snap back to the kind of visitation that we saw before the pandemic,” he said. “We see some green shoots, but … there’s still cause for concern. So it’s really going to be a mixed bag this year in terms of results.”

Meanwhile, Nguyen, in Dallas, is still trying to figure out what to do about his upcoming trip. 

He had hoped to drive to Seward, Homer and Denali National Park and Preserve. But, he said, spending $2,500 on a rental car just doesn’t make sense. It’d be more than the cost of the rest of his trip, plane tickets included.

“Worst-case scenario, I don’t know, I don’t think I could spend at least two grand on a car,” he said.

Nguyen said he reached out to Alaskans on Facebook who recommended everything from checking out the car-sharing website Turo to renting a U-Haul. Several people even offered to rent their personal vehicles. 

Nguyen said if he can’t find an affordable ride, he’ll consider canceling his trip.