Expedia: Higher Rental Rates Have Decreased Car Bookings

During a conference call to discuss first-quarter results, Expedia Inc. cited higher car rental rates as a reason why the company has lowered its earnings outlook. Following the guidance comments, Expedia stock fell as much as 11%, the Wall Street Journal reported.

Constrained fleets have led to higher rental rates, and that trend has had an impact on car rental booking volume, the online travel company said.

In particular, Expedia’s Hotwire opaque discount travel site has seen less demand for rental cars. Hotwire customers book rental cars at a discount without initially knowing which rental brand – Alamo, Enterprise, Hertz or National – will provide the car. These customers book on price alone; brand loyalty isn’t a factor. But in the current business climate, the gap between discount and regular rates has narrowed substantially. As a result, many price-sensitive customers have stayed away.

Expedia CFO Mark D. Okerstrom said he didn’t expect car rental bookings to improve anytime soon.

To read the Wall Street Journal article (subscription required), click on the URL. http://online.wsj.com/article/BT-CO-20130425-721454.html?mod=googlenews_wsj

To listen to a recording of the April 25 conference call, click here to register and gain access. 

Comment On This Story

Name:  
Email:  
Comment: (Max. 10000 characters)  
Please leave blank:
* Please note that every comment is moderated.

 
 

Newsletter: Sign up to receive latest news, articles, and much more.

Read the latest

Auto Focus Blog: A blog covering fleets, auto rental and the business of cars

An Inside Look at Car Rental in China

A trip to a new car rental convention in Guangzhou reveals a booming market, yet one facing unique challenges.

Auto Manufacturers: Mobility Disruptors or Fleet Providers?

Maven’s Alex Keros shares insights into evolving smart mobility business models and new opportunities with fleet management.

What is Your Time Worth?

Personal observations of retail and travel transactions reveal just how much a consumer’s time is worth today, and how increasingly intolerant we are of inefficient transactions.

Job Finder: Access Top Talent. Fill Key Positions.

>