More and more travelers decide to travel by plane and the moment they arrive to their destination, they become carless.
It is a specific and self-evident attribute: air travelers will need an additional means of transport. If you haven’t jumped on the bandwagon of car rental services yet, you’re missing out. You’re missing out on an enormous business opportunity.
- Fact: The global car rental market stood at US$87.07 bn in 2015. (source)
- Fact: The global car rental industry is forecast to grow at a CAGR of 5.6% from 2016 to 2021. (source)
- Fact: The market’s opportunity is likely to increase to US$290.07 bn by the end of 2024. (source)
- Fact: The global market for car rentals is heavily influenced by the increasing volumes of inbound and domestic travelers. (source)
“The significant rise in the number of air travelers is having the most prominent impact on the global car rental market,”
says the author of Transparency Market Research study, which exploded over the media in the beginning of March 2017. Car rentals are the golden business opportunity, to say the least.
No wonder that Google already offers 474.100.000 results on car rental, car hire, vehicle rent and rent-a-car keywords combined! The majority of the airlines offer car rentals as a cross sell or at least as an up sell before the flight. Many brokers and metasearch websites thrive on selling their bulk packages. It’s a no-brainer. It’s how it’s done these days.
Use these travel industry changes to your advantage and hop on the car rental bandwagon
Even if you are a local hotel, a boutique travel agency or a small OTA, don’t be afraid of the Goliaths – not even the big five of the car rental industry. Sure, it’s true that Enterprise Rent-A-Car, Avis Budget Group Inc., The Hertz Corp., EuropCar and Sixt, collectively, already accounted for more than 75% of the overall car rental market in 2015 (source); but there is still space for the clever.
In the future years, all the big players will suffer from a show-down. They will have to focus on broadening their fleet sizes, incorporating digital features into their rentals and so on. But this companies are massive and awkward; for them, fast adaptations to the market can be challenging.
For example, Hertz Global Holding recently reported a fourth quarter 2016 net loss from continuing operations of $438 million. Kathryn V. Marinello, president and CEO of the company stated in their February 2017 press release:
“The company’s 2016 performance resulted from issues around fleet and service, which we are addressing.”
Right now, the company is upgrading the quality and mix of the fleet and is rolling out their more flexible Hertz Ultimate Choice offering,
“both of which enable customers to get the cars they want, when they want them,”
Hertz complications are a perfect example of how difficult it can be for the big companies to be agile. The expectations and preferences of customers are changing constantly. Right now, people demand what they want and don’t care anymore if “this is the way the rentals always were”. Remember the Uber example. People didn’t care how Taxis always were, Uber showed them a better way. And the rest is history.
You see, small car rental players can be Ubers of this industry. The only thing they must do is to listen to their clients’ needs and have a sense of their secret desires and act upon it. Hertz knows what people want, it’s just too big to react fast. You can. This is your advantage and it’s a big one.
Besides, as a medium-sized or a small travel company, you have a lot of other travel trends to use to your advantage;
- First, there’s a significant rise in the number of air travelers. (source) The more people travel by plane the more potential car rental industry has.
- Outbound travelers are not the only car rental customers anymore. The global market sees more and more inbound car rental users and domestic travelers.
- The trend of not having a car and using public transportation is still rising. Those that don’t have a car rent it out if needed for longer domestic trips. New car rental customers are also emerging because of the rise of the bleisure – a fresh buzzword in the travel industry which labels business travellers that prolong their trip for a day or few to enjoy some free time.
- Finally, the modern consumer demands much more than just low prices. With all the metasearch websites and discount techniques, there are no expensive car rental providers anymore. The price is not the differentiation anymore. What creates a customer is a positive customer experience and this is the new currency of the rental industry.
The last but not least reason to accept the potential of car rental services
So, are you ready to take the leap? You are the one that knows your customers best. You can listen to them and act in a blink of an eye. Offer them the thing they need – in a manner they prefer. Everything else is waiting for you at Car Target. Exquisite multilingual customer service, wide fleet from the big-name car rental brands that people trust, and powerful yet simple-to-use car rental system that can advance your business into complete travel service.