Tourist spending on vehicle rentals continues to recover from COVID-19 pandemic effects

Tourism in Canada continues to recover from the effects of the COVID-19 pandemic, which restricted travel. Tourists, both residents and non-residents, are taking more trips, and data on expenditures (seasonally adjusted, 2017 constant prices) show that they continue to spend more on vehicle rentals.

Tourists spent $329 million on vehicle rentals in the first quarter of 2024, up from $298 million in the previous quarter. Expenditures have risen steadily in most quarters since falling to $132 million in the second quarter of 2020, following the pandemic’s onset.

Since we started tracking these and other tourism-related expenditures in 1986, the all-time high mark for expenditures on vehicle rentals was reached in the third quarter of 2019 ($423 million). Before the pandemic, expenditures also topped $400 million in every quarter going back to the second quarter of 2017.

By comparison, tourism expenditures on air transport surpassed pre-pandemic levels in the second quarter of 2023. Expenditures on passenger rail transportation have nearly made a full recovery, while those for interurban, charter and tour bus transport are closer to recovery than vehicle rentals.

Rental industry revenues surpass pre-pandemic levels; rental prices stabilize

The operating revenue (including non-tourist-related; in current dollars) of the automotive equipment rental and leasing industry group, which includes passenger cars, trucks, utility trailers and recreational vehicles, increased by 20.8% from 2021 to reach $8.6 billion in 2022. This figure is also nearly 10% higher than in 2019 ($8.0 billion).

The price to rent a passenger car was 45.1% higher in 2022 than it was in 2019, partly because of pandemic-related supply issues. For example, the rental car fleet in British Columbia was 31.5% lower in 2020 than it was in 2019, and by the fourth quarter of 2020, the fleet had reached its lowest level in a decade.

The semiconductor chip shortage affecting vehicle manufacturing and supply in 2022 eased through 2023, and inventories increased. In 2023, the price to rent a vehicle was little changed compared with 2022 (+1.1%).