car rental rates

[docmartin]

any idea why the car rental rates went up so much? out of Cancun they are now more than twice what they were three weeks ago. i go to mobissmo.com to search and have always found a car like a nissan tsuru for $10 or less/day. all of a sudden they are $22. given that business is so slow such a price hike seems strange.

 

[driftwood]

Ah, but you are in Mexico. When times are bad, they raise prices to make up for the lack of income. As near as I can figure, they still have the same fixed costs to keep the doors open. With fewer customers, you get stuck with a bigger share of the fixed costs. That is the business school answer. An alternate explanation is that they figure the people who are coming must really want to be there, so they can gouge them with higher prices.