As the car rental industry looks set to gear up for the next few years, here are 5 lessons from 2021 that every car rental business must be mindful of.
The car rental industry today is enjoying a boom amid rising disposable incomes, improved air connectivity across smaller cities, and healthy growth in business and leisure travel. The U.S. market had its best year ever in terms of revenue in 2018, clocking a 4.8% jump in top line to over $30bn. Even more impressive was the fact this record revenue was realized on smaller fleet base, with revenue per unit hitting an all-time high of $1,131 per month.
2020 is a year that the car rental industry would want to forget. The pandemic and the challenges it brought in terms of lockdowns and social distancing had the industry witnessing an unprecedented slump. Fortunately, with the development of the Covid-19 vaccine, demand for car rentals is now gradually picking up.
Revenue Managers would agree that car rental pricing is a tricky subject – Price your products too high, and the demand drops, price it too low, and you end up losing revenue. In such a case, it becomes essential to forecast demand by carefully analyzing multiple parameters such as fleet type, season, location, and more importantly, the Covid restrictions in place at that location.