Car Rental Shortages Continue and Hotel Managers Notice Mixed Demand Compared to 2021

Last summer, Dollar Car Rental owner Ethan Ranger had a short supply of rental cars at his shop in Columbia Falls due to a semiconductor shortage and general supply chain disruptions, but his fleet is down even lower this year with 15% to 20% fewer cars than 2021.

“It’s worse this year,” Ranger said. “Every vehicle we used last year has increased miles and you have to get rid of a few rentals every year. It’s hard to replace them and the cost to replace is significantly higher.”

Ranger’s fleet is down 25% to 30% of where he’d like it to be, but car manufacturers have no inventory to sell him, leaving his fleet in short supply.

Because it’s so difficult to replace rental cars right now, many rental corporations are relaxing the wear and tear standards, meaning companies can use vehicles that have a higher mileage before selling them. But since so many of the rental vehicles in the Flathead Valley travel on poorly maintained dirt roads, wearing down the suspension and front bumpers, Ranger still has to retire many of them at the end of each season.

“These vehicles are used hard and it’s not the quality that a customer wants,” Ranger said. “Basically every single car goes up the North Fork Road and 85% of customers go to Polebridge.”

Ranger usually carries mini vans and passenger vans, but right now he only has cars and SUVs because his vans from last year were too beat up to use this year.

“I couldn’t replace them,” he said.

Ranger says the rental car demand is higher this year and this month is booked solid while July is 75% booked and August is around 50% booked.

At Red Lion Hotel in Kalispell, General Manager Corbin Bedard says nightly rates have increased in 2022 to about $450 per night during peak tourism visitation compared to about $320 during the same time last year.

Bedard says companies, sports teams and organizations are booking rooms on a larger scale at the Red Lion, taking over much of their space and conference centers, and he’s noticed traffic from the Canadian border.

“The rates are up,” Bedard said. “The average daily rate of the index percentages are fairly solid but we have seen some regression based off of the economy. I think the fuel prices is causing some pause and rising COVID cases is not helping. Flights are more expensive, fuel is more expensive, and it seems like people are watching how they spend their money.”

Bedard says it’s difficult to compare this year’s hotel demand from 2021 because not all of the Red Lion’s 174 rooms were available last year. Staffing and housekeeper shortages forced managers to close off many hotel rooms throughout the summer, but now that the Red Lion is under new corporate management, they have kept all of their rooms in operation so far this season.

New management has led to an increase in wages at the Red Lion, with housekeeper positions starting at $18 per hour and twice-yearly wage reviews.

As the Red Lion hovers near a relatively similar demand as last year, Kalispell Travelodge General Manager Becky Walker says demand is lower than it was last year, with July prices at $229 compared to $259 in 2021.

“We’re slower than we were last year,” Walker said. “We’re not solidly booked and I’m assuming that’s because of high gas prices.”