North American airport-based rental car companies are seeing some of the best results since 2020 as a combination of stabilized pricing, increased vehicle availability, and improved staffing have boosted overall customer satisfaction by 14 points (on a 1,000-point scale) this year, according to the J.D. Power 2023 North America Rental Car Satisfaction Study released Oct. 11.

This state of the industry follows a few years of vehicle shortages, sky-high rates, and staffing issues. However, with the outcome of the United Auto Workers (UAW) strike still uncertain, rental car vehicle supply may again become an issue.

“If you look at all factors and indices, it’s green across the board compared to last year," said Michael Taylor, managing director of travel, hospitality and retail at J.D. Power, in an interview with Auto Rental News. “All metrics point ot more selection available and fewer outages. Your car is more likely to be there when you reserve it. When I look at the numbers, people are happier with the service. You see more customers but fewer lines.”

Taylor cautioned that the UAW strike inserts a wild car into the industry outlook given the close connection between vehicle pricing and availability with customer satisfaction. A prolonged strike could delay vehicle supplies.

Study Ranking Shows Companies Not Far Apart

Enterprise ranks highest in overall customer satisfaction for a third consecutive year, with a score of 866. National(865) ranks second and Alamo(862) ranks third. Overall customer satisfaction for the industry is 843, up from 829 in 2022. The 2023 North America Rental Car Satisfaction Study is based on responses gathered from 8,632 business and leisure travelers who rented a vehicle at an airport location during the past year. The study was fielded from August 2022 through August 2023.

Overall, rankings in the 800-range for all the major companies compares favorably with other hospitality and travel sectors, Taylor said. Airlines, for example, are commonly in the 600s. Hotels once outpaced rental car companies in satisfaction ranking for many years but that hasn't happend during at least the last 15 years. "People do like the convenience of driving a $30,000-$50,000 car around for a few days. It's a very satisfying thing to do and shows up in the numbers."

When the survey asked respondents if they were able to pick a specific car in the vehicle class they had reserved, 81% said yes, up 4% from 2022. When asked if their preferred rental car vehicle class was available, 88% said yes, up 2% from last year.

"Rental car companies have upped game in last eight years due to competition from Uber and Lyft," Taylor said. "It's very easy to reserve car and easy to return it. You can just walk away from the car and get a text with the bill on file. Technology has been very well applied in the rental car space."

Industry Outlook Indicates Shift Ahead

While rental car companies can command higher prices now due to eager customers wanting to travel out from under the pandemic-era cage, those dynamics of high rates and fees will not last, Taylor said.

"Higher prices invite more competition. Sixt is coming into a lot of airports with an aggressive growth plan, which means more competion for the big companies. Uber and Lyft will probably adjust pricing models to increase the alternative to renting a car itself."

Rental car companies also are gathering cash to buy more vehicles as the pandemic-era economics slowed turnover cycles, spiked prices, and squeezed supply, Taylor said. "These cars don’t last forever. The model that car companies were using before COVID was stable with decent incentives and prices. Covid and the chip shortage threw it out of whack. There's a lot of risk going forward."

What rental car consumers are willing to pay will decline as well, Taylor said. "People put up with higher prices because they just wanted to go travel. That’s lasted longer than expected and won't go on forever. Leisure demands have been higher and stronger than expected but will regress to the mean. Eventually demand will decrease and prices will go down."