by Beth Williamson June 11th, 2010
The FIFA World Cup 2010 in South Africa has not seen the anticipated upsurge in demand, leaving business prospects uncertain.
The seeming acceptance of the situation followed the drastic reduction in forecasts and bookings of foreign visitors to South Africa for the tournament. Several large clients and sponsors have also declined to attend the championship, citing the slow pace of economic recovery as the reason for reluctance to outlay costs.
In South Africa, figures for the sale of new vehicles to car rental companies rose significantly in the first quarter of 2010, with 9407 units sold representing an 89 per cent increase from the same period a year ago. This action was in part to car hire organisations boosting their fleets ahead of the football championships; however, sales have fallen by just as great a degree in the past two months. The National Association of Automobile Manufacturers of South Africa reported that sales peaked in February, with 4017 units sold, but April and May both returned under 2,000.
While their remains uncertainties over the actual number of visitors for the World Cup, most rental companies have said they have the flexibility to cope with all scenarios. Avis, for one, has 2,000 more rental cars than this time last year, but utilisation rates and lower rental days have seen the fleet underused and underperform.
Meanwhile, Budget Rent A Car have claimed that capturing the corporate travel market is vital to a successful tournament. The company has already defleeted by 1,200 cars, with an additional 1,600 to potentially go later unless corporate trends show signs of a pickup.