A Guide to Guaranteed Reservations: Has the Time Finally Come?

ACE walks us through the company’s guaranteed reservations initiative. Early results reveal the process is working, from both a cost savings and customer service standpoint.

Screenshot of www.acerentacar.com
Screenshot of www.acerentacar.com

The car rental industry is the only large segment of the travel industry in which it is normal business practice to offer reservations while requiring absolutely no commitment from the customer. This situation has been discussed widely in recent years in this magazine, at the Car Rental Show and elsewhere. Until now, there has been a strong feeling that this needed to change, but most rental car companies took the position of waiting for leadership to emerge.

This situation is now changing, with significant progress underway being led by several car rental chains and online travel agencies. In this article, we will review the problems, the cost of the status quo, new developments and some lessons learned.

The Soft Costs
No-shows have measurable costs, such as Global Distribution System (GDS) reservation fees, an underutilized fleet and the cost to accommodate overbooked customers. (See the infobox below for a financial analysis of the hard costs.) But the soft costs may have an even greater impact.

Soft costs include customer dissatisfaction when vehicles are not available, low employee morale and stress caused by overbooking, long lines, extra staff time needed to juggle reservations, opportunity costs regarding free upgrades to get the customer in the vehicle, costs to report no-shows to travel partners and overpaying commissions.
Often, the most expensive customer to win back is the one the rental operator lost at the counter — or had to hand off to a competing rental agency — because a car wasn’t available.

Barriers to Progress
No one benefits from the current situation, not the rental car companies, the online travel agencies (OTAs) or the customers.

Customers may book multiple reservations on one OTA, or even spread redundant bookings across multiple OTAs. It is not unusual to find a renter with a similar booking on Orbitz, CarRentals.com and the private brand’s website. In such a chaotic environment, the OTA doesn’t have any assurance it  is paid the commissions it may have earned.

And ironically, customers are also hurt by the status quo. Overbooking results in confusion at the counter, delays opening contracts and unexpected vehicle classes, among other issues. Moreover, those hard and soft costs due to overbooking must ultimately be passed on to the consumer.

CONTINUED:  A Guide to Guaranteed Reservations: Has the Time Finally Come?
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Comments

  1. rudi van meeteren [ February 12, 2012 @ 12:28PM ]

    Dear sir/madam, I have booked a car in italy. Paid a sum in advance and received a conformation. after 2 weeks I received an mail from the carbrooker, Carrentalgroup) there was a mistake happened, the showed price was incorrect and sorry but they can not deliver that car for that price, the offer was a mistake they said. I told them we have a deal. the price of the car was for more than 3 days on the website. But the car broker will not agree. question: What are my rights, do they have to deliver? thanks in advance Rudi van meeteren, Holland

  2. gary [ May 23, 2012 @ 02:54PM ]

    If it was a type o error they could get out of it. But if it was a publish quote every day and then they tried to get a Rental Co to take it they are stuck. Many brookers bait you with a low quote to get the reso. Good ones tell you your reso is not confirmed until you are notified. As a rental company that was doing business with a broker I would honor the reso if all possible.

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