'We need help - car rental companies can't keep on selling vehicles to survive'

The sector, comprising about 200 companies, depends almost entirely on international tourism, which accounts for nearly 90 per cent of its business

The hire car sector is starting to pick up again after more than a year of the pandemic, although its strong dependence on international tourists (90 per cent of its customers) means the recovery is slow and many companies have had to sell part of their fleets in order to survive. «Most vehicle rental firms are small or medium-sized businesses,» says Yolanda Collado, head of AESVA, the association that represents local car hire firms. They are calling on the authorities to provide «oxygen» in the form of specific assistance.

How are things looking for the sector this summer?

We're starting to see a bit more movement in terms of tourism and there are bookings not only for July and August but also in September and October. That is making us quite optimistic, but moderately so because it depends how this crisis evolves, on vaccination and the measures taken by other countries, because our business is fundamentally linked to the international market.

How important are foreign tourists for the rent-a-car sector?

Extremely important. On the Costa del Sol they account for nearly 90 per cent of our business.

I suppose you are watching closely to see what the British do?

Yes, absolutely, because that has always been our biggest market. Germans, Belgians and Scandinavians as well, of course, but right now we are missing the British the most because they are the majority of our clients.

This season, are you just trying to survive?

We have had 14 months with no work, and the companies have had to make tremendous efforts to keep going. How? By selling their assets, in other words their cars; we have had the furloughs and the ICO credits, but those are still debts which will have to be repaid. Business is improving, but not enough to make a lot of difference. We still need several months of work to be able to breathe and feel less financial strain. Let's not forget that of the 200 rental businesses there are, the vast majority are small or medium-sized or even family businesses, which have had to work miracles in order to keep going.

How much does a fleet at a standstill cost?

It's very expensive to have vehicles which aren't out on hire. The companies have had to continue paying insurance, taxes and financing, so they have all made losses because they have had zero income. The vehicles have to keep moving. First to cover expenses, and then to keep the company afloat. That's why we need help from the authorities.

What about the government assistance?

The companies need money in order to continue. They have made tremendous efforts so far but can't carry on selling vehicles to survive. We need help. When people talk about tourism they only think about really important sectors like hotels and restaurants; car hire firms are forgotten, as being somewhere between tourism and transport. The work the companies are getting just isn't enough. That's why we are calling on the government, the Junta and local authorities to remember us, because we are the mobility aspect of tourism.

There seem to be a lot of announcements about assistance, but does it not happen?

There is help for tourism and catering, but that's not us. There has been some assistance for the self-employed, but very little. The hire car businesses have been very badly hit because for 14 months we have had to keep paying out despite having no income, so we need a breathing space. Just as other businesses like hotels and restaurants receive specific help, so should we.

Are you able to foresee how this summer season will go?

There are a lot of variables in play and too much uncertainty. Obviously we're not going to see the level of business in 2019 or anything like it, but we do hope it will be around 50 per cent. We do want to be optimistic, but there is still so much uncertainty.

Like driving with the handbrake on.

Well yes, because the uncertainty means you can't predict anything and buy more cars. We don't know if demand will increase, so we can't make big decisions about investment, and that's why the fleets are smaller than in other years.

By how much?

We don't have exact figures, but quite a lot because the companies have had to sell so many vehicles in order to keep going. In fact, some couldn't carry on and have closed down. And those who want to buy new vehicles are having financing problems, and, to make things worse, not as many are being produced because of the lack of microchips, so fewer new cars are available.

Are there enough cars to meet demand if there are suddenly a lot more clients?

Well, demand is increasing and there aren't as many cars for hire now, so we recommend that people book in advance.

You do seem optimistic.

It's our attitude. We have all been through a really difficult situation and we have advanced with the vaccinations and the Covid passport. If the government facilitates safe travel and the private sector continues to make the efforts as it has done till now, I am convinced that bit by bit we can move forward again.