Opaque Rentals: Is the Opportunity Clear?

Last year, Priceline.com brokered more than 15 million rental days to the global car and truck rental industry. Are you increasing your share?

Do you remember the days when your team only had to focus on three or four different customer segments? In today’s competitive marketplace, car rental firms go to great lengths to discover, court and win new customer segments. As a result, the “opaque” customer segment will have the greatest impact on the landscape of the industry and ultimately the renter’s impression of the value of your product.

An opaque rental is defined as a reservation that allows online customers the opportunity to bid the price they want to pay for a specific travel-related product or service and location without knowing the brand. The brand is revealed after the customer makes the online purchase. For airlines, hotels and car rental firms, this customer segment allows operators an opportunity to increase their market share and utilization.

Understanding the opaque rental’s impact on the industry will better prepare your team for additional service-based sales opportunities and will improve the customer’s overall rental experience.
Although there are many discounted travel websites out there, the most popular opaque travel websites are Priceline.com and Hotwire.com.

Changing Landscape and Industry Impact
Today, your customers have more options, are cost-driven, better informed and equipped to make fast buying decisions and are becoming less brand loyal. These characteristics are magnified tenfold for the average opaque customer. Advances in smartphone and tablet technologies coupled with the growing influence of social media will only strengthen the opaque customer’s position and draw more cost-driven customers toward the opaque booking channel.

The following statistics highlight the impact of the opaque trend on the car rental industry:

● According to Quantcast, Priceline.com and Hotwire.com had 86,000,000 visitors in 2010.

● PhoCusWright projects that online travel agency websites generate 39 percent of online travel bookings.

● In an internal study, Travelocity states that 71 percent of travelers consider travel supplier cost and value the most important influencer of their future travel.

● Forrester Research estimates that opaque booking channels have a 90-95 percent customer retention rate.

Additional research shows that during fiscal year 2010, Priceline.com brokered more than 15 million rental days to the global car and truck rental industry. Since 2008, Priceline.com is up 97 percent on booked car rental days. Compared to hotels, airlines and cruise lines, opaque car rental bookings have the highest growth trend. Assuming a conservative 1.2 percent annual growth rate, the global opaque car rental market space will eclipse $1.2 billion in annual rental revenue by 2015. 

Operational Management Support
Understanding the opaque customer segment and its impact will allow your management team to believe in its importance. The following management support actions have to be in place if the opaque customer is going to be well received by your frontline associates:

Management Counter Presence – Managers have to be at the counters when opaque volume comes to the location. One of the benefits of the opaque channel is that it can be turned on, off and on like a faucet. The operator knows when volume will spike; it is critical that support managers are positioned at the counter to assist with high-volume swings. Having managers interact with customers waiting in line or establishing separate kiosks for this wave of business will take a tremendous amount of pressure off your frontline associates and customers.

Fair Incentives – Establish a fair incentive plan that sets a realistic selling opportunity to opaque customers. Adjusting incentive tiers for your frontline associates to accommodate an influx in this new business will lead to enhanced sales and a better customer experience. Establishing fair incentives will allow the management team to hold frontline associates accountable for complaints and service. Establishing a market share bonus for the entire team will provide additional motivation and allow the entire team to see the big picture.

CONTINUED:  Opaque Rentals: Is the Opportunity Clear?
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Comments

  1. vicky Banga [ April 1, 2012 @ 10:24AM ]

    Good one. Gave me good ideas & directions.
    Thank you

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