Outlook 'Healthy' for European Car Rental, CarTrawler Reports

Courtesy of CarTrawler
(Click to enlarge.)
Courtesy of CarTrawler(Click to enlarge.)
In an exclusive for Auto Rental News, CarTrawler, specializing in car rental booking and distribution solutions, addressed rental rates, duration and demand for the European car rental as well as provides an outlook for this year and next.

In terms of an overall pricing snapshot across Europe, increased competition continues to force pricing down across the continent, particularly in Spain, CarTrawler reports. The Scandinavian countries continue to achieve the highest base rate per day although rates in this region have also been in decline. U.S. base rates are now in line with the European average following positive growth last year and continued growth in 2012.

Length of rental is trending positive, as over the last three months the average rental duration in Europe has increased by 2%. While this growth may not appear significant, it has been consistent over the last 12 months due to the economic climate reducing additional short breaks on top of Europeans’ main annual holiday. As well, cheaper car hire rates are making longer rental durations more affordable.

The most significant factors affecting demand across Europe this summer are the Olympic Games in London and Euro 2012 (the European soccer championships) being hosted in Poland and the Ukraine.

Demand in the United Kingdom is down by 10% year over year in June and July due to holiday makers delaying their travels until after Euro 2012 (June 8 to July 1) and the Olympic Games (July 27 to Aug. 12). Demand is showing an 11% year-over-year increase for the period after the Olympic Games until the end of August.

For Euro 2012, other European countries that have qualified for the tournament, such as Ireland and Denmark, are also showing low outbound demand growth for the duration of the championship as consumers choose to stay at home to watch the games. However, as host countries, both Poland and Ukraine destination markets are showing significant increases in demand for car rental during the summer months.

The Olympic Games has not generated significant extra demand in the U.K. due to the large existing U.K. base market and the centralization of the Olympic Games in London, versus the geographic dispersion of the Euro 2012 competition.

In terms of an outlook for the rest of this year and 2013, CarTrawler reports that the European car rental industry is healthy. This is “largely thanks to the optimization of car rental ancillary revenue programs as airlines, online travel agents and accommodation suppliers seek to maximize revenues derived from car rental,” according to CarTralwer.

CarTrawler cautions that careful yield management will be essential to protect margins and to reverse the erosion of base rates. As well, “the car rental industry must address consumer skepticism and mistrust resulting from the lack of consistency around fuel policy, insurance and unforeseen costs incurred at the car rental desk,” Car Trawler reports.

CarTrawler offers car rental options from more than 550 car rental suppliers in 171 countries.


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