VILNIUS - Though prices in the Baltic states are generally wallet-friendly in comparison with the rest of Europe, traveling independently by car can reach costs equivalent to famously high Scandinavian standards. In Lithuania, car-rental rates catch nearly everyone by surprise.
Tourism agencies assert that local car-rental costs astound foreigners who intend to arrange their trips around the country by themselves.
"We receive lots of inquiries about car rentals and barely any sales," explains Monika Petrauskaite an incoming manager at the tourism agency Visit Lithuania.
Renting a car at an international chain such as Avis, Hertz or Europcar is about 30 percent more expensive than, for instance, at the same chain in Germany or France. Baltic tariffs are identical to those in Austria or Scandinavian countries.
To compare the price of car rental here with other tourism expenses, the 24-hour rental of a small economy-class vehicle costs approximately 80 euros, about the same as a double room at a four-star hotel in Vilnius.
According to Ruta Kulvinckaite, a director of a Hertz branch in Lithuania, high prices are the result of a rather low demand for rentals and only a small number of companies within this particular market. Three rival international companies along with a few local ones compete over foreigners, since about 70 percent of customers come from abroad.
And though there are more Lithuanian customers these days, they are often put off by a requirement to possess a credit card, as this type of payment is not widespread in the country.
The sales of the companies largely depend on short trips made by businesspeople visiting the country. A rise in the number of these types of visitors is identified as the main factor behind the small but stable growth in the market.
A rapid increase in tourism could dramatically influence changes in pricing policies for rental cars, but for now companies do not intend to reduce their rates.
"We have noticed a growth in the number of our customers since last year, but the increase is not explosive," says Jurga Venckute, head of the marketing department at Europcar.
The emergence of a few local car-rental companies has nevertheless begun pushing prices down. Experts estimate that rates have fallen about 20 percent over the past five years.
Local companies attract their clients with fees for new vehicles that are 20 percent - 30 percent lower. Ceslovas Koreiva, a manager at the local car-rental company Litinterp, says that their target customer is typically a foreigner renting a car for up to three days.
In contrast with the international rental companies, these local businesses also offer somewhat older vehicles at reduced prices.
Even with a growing diversity in options, the market for these cars may turn and decline at least from the international angle. Renting a car in one Baltic state, driving it and leaving it in another was a popular way for many Americans to travel a few years ago. But recent developments in air travel - specifically the arrival of cheap one-way flights - have presented car-rental companies with serious challenges.
"I believe we are going to lose a lot of international clients, especially those traveling one way because of the new policy at airBaltic," says Kulvinckaite.
