The Effects of COVID-19 on the Rent-a-Car Industry: A Study Case Based on Argentina

The Effects of COVID-19 on the Rent-a-Car Industry: A Study Case Based on Argentina

DOI: 10.4018/978-1-7998-6996-2.ch007
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Abstract

Doubtless, COVID-19 has accelerated an economic financial crisis since 2008, affecting seriously not only the tourism industry but the global commerce. Governments have adopted different positions and programs to mitigate the economic aftermath of COVID-19. As never before in its history, tourism has been placed between the wall and the deep blue sea. Although the interests and studies evaluating the impact of COVID-19 have captivated the attention of countless scholars, less attention was given to the rent-a-car industry, which occupies a central position in the tourist system. As substitute competitors of train, bus, and airplanes, the rent-a-car organizations seem to be a quintessential actor of the tourist system. Of course, because we live in a world without tourists, empirical-based studies do not abound. To fill such a gap, the present chapter describes the economic downturn of a rent-a-car organization giving a firm empirical case. Although illustrative to some extent, the obtained outcome cannot be extrapolated to other universes or samples.
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Introduction

By the end of 2019, probably months earlier, China went through a new virus outbreak in the city of Wuhan. Although originally the situation was trivialized by Chinese authorities, no less true was that the virus spread rapidly to the four continents affecting not only global commerce but also forcing governments to close their borders and airspaces. With the benefits of hindsight, Coronavirus disease became an unparalleled disaster (pandemic) so that the world was not prepared. To date, CO-SARS-v2 (known as COVID-19) infected almost 23.472.214 persons causing 815.262 fatal victims (last updated on 08-24-2020). The most affected countries include the US (180.788 victims) followed by Brazil (114.913), Mexico (60.480), India (58.546), the UK (41.433), Italy (35.441), France (30.528), and Spain (28.870). Even if the virus originally wreaked havoc the public health system in Spain, Italy and France, a similar state of the crisis involved other countries such as the US, Germany and the Netherlands. At first glance, the WHO (World Health Organization) failed to adopt and impose a standardized plan of contingency while each nation followed their methods of prevention. As a result of this, nations –no matter their economic maturation- opted for two clear-cut decisions. Some countries like the US, Mexico, Ecuador, Brazil and the UK engaged to protect the domestic market adopting soft measures while others imposed a strict lockdown, lasting for weeks or months (China, Japan, Argentina, South Korea, Australia). Quite aside from the discrepancies revolving around the correct –if not most efficient- course of action to prevent the pandemic, the global economic downturn teetered the entire world on the brink of a financial collapse. This opens the doors to a new paradox: in a hyper-mobile world, the modern means of transportation that often connected far-away countries in hours seems to be the most efficient carrier for the virus dissemination. This point has particularly led to tourism scholars to express a much deeper concern about the future of tourism. Echoing Adrian Franklin (2007), scholarship enthralled the figure of the tourist as the only valid source for scientific knowledge, relegating other voices to a peripheral position. In so doing, tourist-centricity monopolized the methods and epistemology of tourism research as well as the content to be published in leading journals. Without going into further details, COVID-19 offers a similar dilemma regarding how to study tourism in a world without tourists. Today scholars who urged to write and publish about COVID-19 debates between two opposed poles; those interested in developing new methodological toolkits to understand tourism in a context of new normalcy (Wen et al. 2020; Miles & Shipway, 2020; Zenker & Kock, 2020; Verma & Gustaffsson, 2020), and those voices who enthusiastically hoped for the opportunities to create more resilient and sustainable destinations. De-growth tourism, for them, exhibits an interesting point of departure for the next decades (Gossling, Scott, & Hall, 2020; Gallego & Font 2020; Higgins-Desbiolles, 2020; Prayag, 2020; Galvani, Lew & Perez, 2020; Crossley, 2020). Despite their eloquence and the high-quality texts, these studies are based on a speculative spirit, which is characterized by the lack of empirical evidence or information or follows theoretical insights about good practices towards more sustainable tourism. What is more important, tourism-based research –though widely developed in these decades- has systematically overlooked the role played by rent-a-car subsector. As stated, tourists, as well as their perception, fears, hopes and experience, have been methodologically situated as the main object of study in tourism research. To fill this gap, the present chapter explores empirically the real economic and socio-cultural effects in a rent-a-car company which is geographically located in Argentina.

Key Terms in this Chapter

Fear: It signals to a basic emotion based on the needs of avoiding or confronting an external real or imagined threat.

Rent-a-Car Market: Market that hires and offers car rentals to tourists and travelers.

Tourism: It is considered a sector industry oriented to promote travel experiences and consumption. Today tourism is considered one of the largest industries worldwide.

Economic Downturn: This means a term associated to stock and market crisis or an economic cycle constriction which generates an economic decline.

COVID-19: New virus outbreak originated in Wuhan, China, which started a new global pandemic that affected most of the industrial economies of the world in 2020.

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