Five trends in the business travel car rental industry
If you’ve ever booked a car, you’ll know that it isn’t always a smooth ride. But since 25% of car rental revenue is generated from corporate clients, car hire companies are now trying to increase their appeal to corporate travelers.
To remain competitive, they’re making sure they adapt to ever-changing trends to find ways to provide customers with the best possible service.
So, what’s in store for the car hire industry? Read on to learn about the five leading (and some very exciting) trends.
Car rental companies prioritize convenience
Rental car companies are focusing on sustainability
It’s best to book early
New technology is improving the customer experience
Self-driving vehicles are gaining popularity
1. Car rental companies prioritize convenience
With the rise of new mobility options like peer-to-peer car sharing such as Turo and GetAround, car rental companies now have a lot more competition. Not to mention the popularity of Lyft and Uber as a convenient rideshare option for business trips.
Subscription-based car rental services are also a growing trend and offer flexible ways to rent cars. Rather than endure the monotony of going to a rental office or standing in line at a kiosk, customers can now sign up for a service and choose from a wide selection of vehicles delivered to their location.
Thanks to a rising demand for car rental options from corporate travel programs, services such as airport transfers and flexible rates will become more widely available in the future.
2. Rental car companies are focusing on sustainability
As the demand for more sustainable travel increases, car rental companies are making the switch to electric, hybrid, and other alternative fuel vehicles.
Hertz has taken the lead on electric vehicles with ambitious orders for Tesla in Europe and the United States and estimates electric cars will soon make up more than 20 percent of its global fleet!
Avis and Enterprise have both expressed their intentions to grow their plans for electric vehicles. And although they remain in more preliminary phases of their plans, Enterprise has already rolled out a selection of electric vehicles in test markets, while collecting data on how they’re driven and charged by customers.
However, limitations with charging stations and driving ranges are still an issue with electric vehicles, and infrastructural improvements need to be made before widespread adoption takes place.
3. It’s best to book early
Even though last-minute rental cars tend to be cheaper, it might not be a good idea to procrastinate when booking. With volatile supply levels, there’s a risk that last-minute inquiries will result in zero availability.
Rental agencies reduced fleet sizes in the wake of the pandemic and haven’t yet fully recovered. Some of this is due to component shortages and supply chain disruptions that have reduced global production. During the pandemic the combination of a chip shortage and record consumer demand even pushed some car rental rates to $100 a day or more. And automakers are still catching up.
Thankfully, prices have dropped, and the manufacturers have recovered from the semiconductor shortages of 2022. However, it’s worth keeping in mind there are still inventory shortages in certain locations and during peak periods.
4. New technology is improving the customer experience
Believe it or not, car rental companies are improving technology by investing in mobile apps and software solutions that streamline the process. These apps allow customers to reserve and pay for a car in just a few clicks and receive real-time notifications on the status of their rental.
Some companies are also experimenting with artificial intelligence to predict when their used cars need maintenance which allows them to quickly identify and repair any mechanical issues. They can even inspect cars with mobile phone cameras! Increasing efficiency for both the business and the customer.
5. Self-driving vehicles are gaining popularity
Too tired to drive after a long flight? Well, you might not need to worry soon as car rental companies have started to think about autonomous vehicles as a potential avenue of expansion. These cars will be able to drive themselves between owners and renters, parking at their destination without any assistance (exciting stuff).
Most car rental companies view self-driving vehicles to reduce overhead costs and increase their efficiency since they don't need to employ drivers.
Uber, Tesla, and others have already planned similar services, and car rental companies will be able to adopt the same ideas sooner rather than later.
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