A new report states that Ireland is facing a rental car shortage that could delay a recovery in its tourism industry, according to the Irish Times. The shortage is partly due to changes to a VRT rebate system, which turned car dealers away from doing short-term deals with rental companies.

The report, Car Rental Fleet Shortages Tourism in 2010, states that the shortage could cost the Irish tourism industry more than a quarter billion euro this year.

Ireland rental fleet included about 30,000 cars in 2006, but dropped to 17,500 last year and to 12,500 this year.

The report, compiled by tourism industry bodies such as the Car Rental Council of Ireland, states that the shortage is hurting business for airlines, hotels and tour operators, and could result in serial cancellations.

Paul Redmond of the Car Rental Council of Ireland, said dealers and financiers lost faith in the old system of selling cars and buying them back having been rented. He added that in 2009, only 6,600 new cars were added to the fleet, compared to 20,000 in 2007.

An estimated one-third of all overseas travelers rent a car while in Ireland.