Seasonal Storms Trigger Shifts in Demand

In 2003's second quarter, the sagging economy and military action in Iraq have taken a toll on car rental demand. But early this quarter, the weather also played a role in demand -- at least in some regions.

In April and May, the Midwest and parts of the South and Southwest suffered through a barrage of storms -- many highly destructive, some even deadly. For some operators, storms brought car rental demand to an abrupt halt as customers canceled travel plans. But for others, the perilous weather conditions sent utilization rates soaring as local customers clamored for replacement cars.

In a single week in May, for example, tornadoes killed 42 people in Missouri, Tennessee, Kansas and Illinois. A tornado that ripped through the Oklahoma City area destroyed more than 300 houses and businesses.

"The demand was greatly affected," said Chris Goad, rental manager at Cheep Car & Truck Rental in Oklahoma City. "The major car rental companies couldn’t keep up with demand and so a lot of their overflow trickled down to us. And we're more or less cash rentals."

Rent-A-Wreck in Joplin, Mo., also saw demand swell after stormy weather.

"Everything was rented out during the couple weeks after the big tornado last month," said owner Dave Roragen. "Some people did have to be turned away, though, because we simply couldn’t accommodate them. Most of the rental car agencies in town were dealing with the same situation."

However, some operators who normally target business and leisure travelers saw demand dip.

"We primarily rent to corporate travelers," said Kenny Demarest, manager of Economy Rates Rent-A-Car in Arlington, Texas. "And when we have bad weather, of course, there isn’t much travel."

To make matters worse, half of the company's 120-car fleet suffered damage during the storm.

"In my 14 years here, this has been the second time that our fleet has been damaged to this extent," Demarest said. "But business picked itself up when people came back as the weather started to clear."

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