As much as we would love for the pandemic to be a thing of the past, it isn’t yet. Even the most avid traveler had to put a halt on their vacation plans and coop up in their houses owing to the pandemic. While we haven’t jumped back to the state of normalcy that we once knew, things are beginning to change for the better.
With a vaccination certificate in one hand and the ease of getting rapid testing whenever required, most people are ready to fly across the world. With that, the state of ground transportation is also beginning to change.
The adversities we have faced, as an industry, in the past two years have taught us quite a lot of lessons. However, there are few which are noteworthy for the owners and revenue heads of car rental companies to help plan this FY better and especially keep your budget on track.
Learnings from the Past
As the world begins to open up and travel surges, car rentals are also in high demand again. The global car rental market is expected to grow at a CAGR of 9.18% in 2022.
The last two years posed multiple challenges related to low demand, lack of fleet supply, and alternative options for car hire. However, with the new vigor in the travel sector, the car rental businesses need to catch up with the trends.
As the car rental industry looks set to gear up for the next few years. Here are the 5 most important lessons from 2021 that every car rental business must be mindful of.
Invest in building a community Human beings are hard-wired to live in communities. It is a crucial component of our adaptive toolkit. It enables us to come together and accomplish things we could not do on our own.One thing that COVID has taught is that customers have started opting for more personalized experiences. In the past, car rental agencies were more focused on their digital strategies, specifically their mobile apps and websites. This strategy worked well until 2020, when people started staying at home as much as possible.Companies must now focus on creating a loyal client base and finding innovative ways to engage with them throughout their journey. Repost and share content posted by your customers to build a community around your business. It will encourage customers to interact with one another, and with the brand.During this time, provide excellent customer service so customers do not forget you or go to the competition instead.
Invest in digital operations and encourage contactless travel The pandemic has changed the way people perceive this industry. One of the main issues is dealing with customers face-to-face and handing them over the keys, especially in the current dynamics. Given how everything is slowly moving towards digital, the future of travel included, it is time to consider investing in digital operations. Especially the ones that will allow you to streamline processes and offer the necessary information to travelers. Earlier, people rode Uber and Lyft because they felt it was more convenient. The pandemic made it clear that private vehicles are safer and provide more flexibility.Car rental companies should look into implementing contactless rentals that allow users to complete their entire transaction digitally, from booking a vehicle to returning it after use. They should also let users sign contracts electronically. Many tools out there can help car rental companies adapt to the new digital changes.
Go green Let’s face it. Electric cars are the new in-thing. They are fast, economical, and being rapidly adopted. Europe and the US, have even mandated manufacturers and car rental companies to add electric cars to their portfolios. People nowadays are more conscious and prefer emission-free or low-emission modes of transportation. The big question is: when will these cars make up a significant portion of rental fleets? It’s difficult to say exactly when that will happen, but one thing is for sure: car rental companies need to consider adding electric cars in the future to their fleet.Why?
Well, for starters, there are more EVs on the road today than ever before. According to the International Energy Agency (IEA), there were over 5 million EVs sold worldwide in 2017. That number is expected to grow steadily over the next decade or so, reaching as much as 130 million by 2030.
Restore capacity In the last two years, the layoffs have been massive. Covid was at its peak, which restricted traveling, so businesses did not see a point in keeping more staff than required. However, with the change in scenario and the increase in travel demand, it’s crucial for car rental businesses to have adequate staff in order to run operations smoothly while delivering satisfactory customer service. Thus, it becomes vital for the company to recruit fresh individuals and train them appropriately. If not, you may have to face the brunt of excess demand and lack of support, which will ultimately cause losses.
Rethink travel analytics For any business to make the best of the situation and resources available, it’s essential to keep track of trends.
Like any business, the car rental business requires insights based on actual demand so that they can muster to anticipate future changes. This invariably helps in setting the prices at the most optimum level. One way to do so is to invest in solutions that can provide detailed insights into demand intelligence and the digital analytics for various channels from which there is an inflow of bookings. This helps you put out well-regulated offers via more relevant channels. You can focus on things that need your assistance while digital analytics does its trick and keeps an eye on past, present, and future trends. Additionally, this will help you act on your feet and move along with the tides of changes as well as you can.
Rev-AI– Bringing the Magic of AI to Car Rental Companies
While lessons from 2021 are abundant, it’s humanly impossible to adopt everything. So, what can you do?
You can adopt a demand forecasting and price intelligence solution that will help you earn more margins while taking the burden off your revenue managers. Further, it will help them identify the total market potential, and uncover hidden opportunities to maximize revenue.
Wondering how that might work? Let us take a quick look at what Rev-AI does!
Forecast future demand To become a leader in the car rental business, it is essential to have forward looking insights into demand, which will clarify what demand looks like for a particular location at any given date and the hot dates for all the locations. It will enable the fleet’s movement to high-demand areas, increasing fleet utilization. Traditionally, revenue managers would do it manually and rely on historical bookings to predict future demand. However, the pandemic has brought so much volatility to the market that guesswork and gut feelings are not accurate enough. This is where Rev-AI, with its AI algorithm and 25+ real-time micro and macro demand indicators, gives clear 90 days visibility in advance for all your locations to cater to actual demand as per market changes.
Offers insights about the market potential Traditional revenue management tools only offered an idea about how to price your cars, based on the rules decided while setting-up these tools. This limited your scope of earning margins, as they did not factor in actual demand. Further, they provided no information about market potential. Rev-AI, on the other hand, gives you price recommendations based on hyper-local demand, competitor intelligence, your historical bookings and your positioning in the market. It also helps you track and monitor your target vs. achievement in terms of budget for the current Financial year, along with your pace of booking, and also highlights how far you will be able to reach your target at the current pace. Further, it enables you to achieve optimum utilization of specific car categories, set the average rental length, increase overall fleet utilization, and much more.Maximizing revenue in the car rental business was never this easy!
Helps optimize rates In a volatile industry like this, understanding when to change your prices is of prime importance and being dynamic with prices is an absolute must in order to achieve your maximum revenue potential. Besides creating an accurate demand forecast for the future, Rev-AI goes a level up to provide you with optimized prices, and the option to distribute these prices across all your channels, with a single click. The prices recommended are based on your end goals, your competitions’ prices, your fleet utilization, your positioning in the market, and actual demand in order to get the best rates to implement for every location and car type.Gone are the days of manual work, multiple spreadsheets, and spending hours creating a car rental pricing strategy or comparing rental car prices.
So next time, when your demand is likely to hit the peak, Rev-AI will prompt you to boost your prices and enjoy greater returns!
All of these functionalities and insights are offered right under one single dashboard. So, no more confusing ‘where do I look for the specific thing?’ head scratches!
The car rental business has become deeply wayward because of the Covid-19 pandemic. It’s hard to keep track of the market demand and make rental car price comparisons, manually.
Regardless of all the lessons from the past, it’s physically impossible to take care of everything. To err is human, after all. Hence, it’s time to introduce yourself to one of the best revenue optimization solutions in the business.
Rev-AI has an inbuilt metric to maximize revenue for car rental businesses. With its demand indicators and AI algorithm, you will get the most accurate demand forecast and optimized prices. It will also fix all your risk adjustment revenue optimization issues, and you can focus entirely on offering the best car rental experience to your customers!