Auto rentals gaining share of spending on travel amid Covid-19: Mastercard

Consumers are traveling again, but instead of using planes and trains, they’re turning to cars and scooters.

File photo used for representational purpose only
File photo used for representational purpose only

The US saw the return of the great American road trip this summer, according to analysis by Mastercard Inc. of spending on credit and debit cards, along with estimates for cash and check payments. Globally, auto rental’s share of total transportation spending nearly doubled in the second quarter to 17% as consumers kept more of their traveling local amid the coronavirus pandemic.

In the US, people aren’t using cars alone to get around. By the end of July, spending on so-called “micro-mobility" travel options -- such as bicycle and scooter rentals -- had surpassed their 2019 levels. That helped counter broader declines in US travel and entertainment outlays.

“Gas spending, restaurant spending, bike-rental spending -- all are improving, showing that the rebound is happening but is focused on local travel and local spending," Steve Sadove, a senior adviser to Mastercard, said in a statement Tuesday. “In other words for those of us in the US, the great American road trip has returned in a new way."

Also Read : Concept of road trip is changing in the US, customized plans jack up cost

Here are other key insights from the report:

  • Overall retail sales excluding auto declined 3% for the period from June 1 to August 15 from a year earlier.
  • When consumers are traveling, they’re increasingly choosing to stay at smaller, boutique hotels over national chains, Mastercard found. The recovery rate of independent hotels outpaced that of large hotels by more than 50%.

Commercial spending on airfare was down 84% in July from a year earlier, likely the result of businesses reducing risks and costs, Mastercard said. The decline was less dramatic for consumer air travel, with spending down 73%.

First Published Date: 02 Sep 2020, 12:20 PM IST
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