Normally at the International Car Rental Show in Las Vegas I’d be out on the town right now, if not with you, then with old or new friends in the car rental industry. But that always prevented me from recapping for those not in Vegas all the great information and education presented during the day. Of course, this year in the virtual world, I’m back at my desk. 

Here we go: 

The day started with the seminar “Assessing the Big Picture: Financial, Wholesale, and Travel Markets.” When you can get an equity research analyst (John Healy), a travel industry analyst (Mark Sharoff), and an automotive economist (Tom Kontos) in a seminar, you know you’ll get an avalanche of information. 

Here are only a few nuggets. I suggest you access the seminars on-demand by visiting here; you’ll have to register for the show if you haven’t already. 

With its recent debtor-in-possession financing, Hertz will survive as a strong brand in the market, Healy said, but will be a lot smaller after asset sales such as its Donlen fleet management business and some domestic and international operations. Healy thinks Hertz could turn to franchising once again to inject it with capital to help earn its way back to solvency. 

Avis Budget Group will get through the pandemic without significant damage to its balance sheet, Healy said. As Avis was able to take out $2.5 billion in annualized costs from the business, Healy wondered if it rebuilds with the same services and labor or looks to more opportunities for automation. 

Enterprise and Sixt have gotten bigger, in relative terms. Sixt was able to acquire bankrupt locations from Advantage while Enterprise bought out Canadian independent Discount Car and Truck Rental just before the pandemic. 

Ride hailing saw a commensurate or even greater hit to its business, which is forcing Uber to pivot to Uber Eats and the acquisition of Postmates. Could this be an opening for car rental? 

On the fleet side, supply chain disruptions and decent new and used car demand will result in a severe lack of fleet allocation for rental in 2021. 

“Fleets to the industry are tight and they're going to get tighter as demand continues to rebound,” Healy said. “And if we get a vaccine that allows for travel to return to active status in 2021, it could be a really profitable year (for car rental) because yield to the business could be quite healthy.”

Kontos’s main point was that the hot used car market will continue to remain strong in 2021. The market will easily be able to process Hertz’s remaining fleet sell off, while low-mileage rental units in general have been in high-demand by dealers lacking new car inventory. 

Kontos estimated that close to 1 million extra cars will have exited the total U.S. rental fleet as a result of the pandemic. “The absence of that million units will support wholesale values for late-model used vehicles for quite a ways down the road,” he said. 

Sharoff showed that domestic travel was down 50% in August from last year, while international travel was down 88%. 

Business travel too has been hit a lot harder than leisure travel and it will probably take longer to recover, Sharoff said. Looking to next year, Sharoff cited data that projects that business trips will only account for about 10% of all trips taken, as companies will continue to limit employee travel. 

Sharoff left attendees with a sobering projection, that the timeline for a full travel recovery won’t be until 2024, when analysts believe air passenger traffic, both international and domestic, leisure and business, and hotel revenues will return to pre-pandemic levels. 

In the seminar, “Car Rental’s Digital Transformation in a Post COVID-19 World,” Shawn Concannon of TSD and Brian Garcia, director of global franchise support for Enterprise Holdings, outlined contactless car rental solutions born out of necessity have only accelerated car rental’s digital transformation. 

“Before this pandemic, I thought (integration of digital technology) was 24-to-36 months away, but now it’s expected today,” Concannon said. “I don’t think that’ll change in the future.”

Concannon referenced the new normal in other processes such as fast food, big box store purchases, and auto dealer sales. “Once you make these great digital changes for your customer, they’ll expect this baseline going forward,” he said. 

However, both Concannon and Garcia stressed that before going to a contactless experience, it’s imperative to understand how you’re going to communicate the change to customers. “If you haven’t done a good job, everything else falls apart,” Concannon said. 

A central fear for car rental in a non-human transaction — in addition to security concerns — has always been the removal of a face-to-face sales opportunity. Concannon showed that digital ancillary sales are growing faster than legacy in-person sales. Why? 

“For the same reason that people don’t like buying cars from salespeople,” Concannon said. “Provide options that are presented well, and you’ll see sales trend upward.” But frequency is key — you need to ping them as their mindset may have evolved. 

Keeping on the same theme in the “Going Contactless: Preparing Your Rental Business for a Frictionless Future” concurrent seminar, Richard Laughton of Move Mee admitted that rental customers today must put up with a clunky, dated experience. On the other side, car rental companies face increasing margin pressures from the cost of customer acquisition, price pressure, and commoditization of a rental car. 

A contactless or “frictionless” rental experience, particularly at airports, accelerates the process by putting customers in cars physically much closer to the booking on the mobile device. “It’s a great time to approach airports to get that more convenient (short-term) parking for a contactless approach,” Laughton said.

As the renter must take ownership of most of the process, from reporting fuel and mileage, photographing the vehicle, providing location, and locking it, the friction is reduced, and the customer experience is improved.

In the other concurrent seminar, “An Operator's Perspective: Car Rental & Telematics in the New Normal,” seasoned car rental operators shared how they use telematics beyond track and trace of their vehicles. 

The main benefits were quicker recovery, not only in thefts but situations such as body shops and customer overdues, and mileage tracking to better manage high-mileage units. 

Rich Sinda, a Hertz licensee from Athens, Ga., summed it up in relation to the pandemic:

“For a solid two months we basically weren't in the rental car business, we were sitting around, staring at our computers. And then suddenly, out of nowhere, everyone around here started traveling again. But they're not getting on airplanes, they're renting cars. And we ran into a mileage problem, because people were traveling a lot longer distances in our vehicles. Our cars are now working harder than they've ever worked. We're keeping cars on the road almost constantly.”