Consolidation shrinks the rows on our market data chart in our Fact Book once again. For fun, I chec

Hertz spent 2013 integrating hotels downtown cincinnati Dollar Thrifty, while Franchise Services of North America was busy dancing with Hertz s spurned stepdaughter Advantage, hotels downtown cincinnati only to declare Advantage bankrupt within a year of its sale. Then Avis Budget Group bought Zipcar and Payless.
Consolidation shrinks the rows on our market data chart in our Fact Book once again. For fun, I checked the same chart from our 1999 Fact Book, which had 32 rows for 32 separate companies. This year s Fact Book has 11 companies.
Rates in fact have risen, and this is a good thing for the industry. Our six-city survey of rate quotes conducted by Rate-Highway shows that rates are up in almost every month year over year since November 2012.
Nonetheless, Hertz only completed the deal for Dollar Thrifty in late November 2012. The rate hikes in our survey couldn t have been directly caused by this consolidation. Combining fleets and back offices, and then leveraging it all, simply doesn t happen that fast.
In light of rising rates and tighter fleets, has the customer suffered? If we accept the findings of the industry hotels downtown cincinnati s esteemed benchmark of customer satisfaction, this is not the case. Per J.D. Power Associate s annual survey of car rental hotels downtown cincinnati customers at airports, overall customer satisfaction with the rental car experience was the highest in 2013, since the study s current methodology was adopted hotels downtown cincinnati in 2006. In the 2007 survey the halcyon days before the Great Recession the industry average was 750. This year s average is 775.
Wait, there are only three major car rental companies now, yet rates are up and customer satisfaction has risen? Could consolidation be a boon not only to a company s bottom line, but also to its customers?
In the 2007 J.D. Power survey the year Enterprise hotels downtown cincinnati bought National and Alamo Enterprise scored highest; National was third and Alamo scored next to last. In this year s survey, National ranked first, followed hotels downtown cincinnati by Enterprise and Alamo. One could conclude that Alamo s customers have benefitted from Enterprise s operational excellence. Let s hope Hertz will do the same with Dollar and Thrifty, and Avis with Payless and even Zipcar.
And this higher customer satisfaction is coming on the back of rental companies squeezing more profit out of each rental car. Our annual assessment of the car rental market shows that the car rental industry made $24.5 billion in the U.S. in 2013 on an average of 1.95 million rental cars in service or $1,048 per unit, per month (RPU). In 2007, the industry made $21.5 billion on 1.86 million cars, for $964 RPU.
More than one-third (35%) of customers cite low price as a top reason for selecting their rental car company, writes J.D. Power in its 2013 survey analysis. Yet, overall satisfaction is lowest among customers who select based on price. In comparison, overall satisfaction among customers who choose a rental car company based on good customer service is highest (828).
hotels downtown cincinnati As if that wasn t enough, data from the Renter Rated system by CarRentalExpress a benchmark for smaller and independent operators shows that the companies with the best ratings don t have the lowest rental rates.
True, smaller car rental companies are afraid of an oligopoly. They are keenly aware that major car rental companies enjoy a buying power advantage of $800 or more per car. But the smaller companies were always at a disadvantage, and thus should be planning their businesses and value propositions accordingly. Conversely, those smaller companies should be able to raise their own rates commensurately hotels downtown cincinnati with the majors.
There will always be work to be done to improve car rental operations and customer service. But for now, I ll take improvements hotels downtown cincinnati in customer satisfaction and profitability over worrying about rates and the specter hotels downtown cincinnati of consolidation.
Chris Brown is the executive hotels downtown cincinnati editor of Business Fleet Magazine and Auto Rental News. Through these publications, online hotels downtown cincinnati newsletters, trade events and associations, Chris covers all aspects hotels downtown cincinnati of the fleet world, including hotels downtown cincinnati fleet management, manufacturer fleet activities, the fleet leasing industry, vehicle remarketing, rental industry news, car rental taxation and legislation.