“I went to the car rental counter with my guaranteed reservation ready to jump in my red Mini Cooper S convertible and they tried to put me in a monster truck!” she gasped.

Sounds like either the tag line for a ‘50s B movie or a quote from a newspaper story on a supposed new trend in car rental. Figure it’s the latter. And yours truly at Auto Rental News has been called repeatedly for a reaction. (My reaction? I heard they actually put the customer in an M1 Abrams tank.)

In this new reality of $4/gallon gas auto manufacturers are facing an enormous challenge to rightsize their fleets. It seems they can’t build compact cars and dump behemoth SUVs fast enough. The car rental industry being beholden to the manufacturers, news accounts are exhorting the theory that car rental customers are not getting the cars they want.

The media has found a few anecdotes to back up any story. Yet, overall, is this true?

This issue’s cover story, “Coping with the Small Car Reality,” looks at the situation from the other side of the rental counter, your perspective. We learned a few things from what you told us.

Fuel economy is on the minds of customers like never before, and playing the free upgrade game is not as great a deal as it once was. But that doesn’t mean the customer goes away unsatisfied with the rental. Most upgrades are from an economy or a compact into a mid- or full-size vehicle. Those of you who educate customers that they are not sacrificing much fuel economy but are gaining more comfort and features at the same price are going a long way to smooth over their concerns.

Sabre’s numbers show that economy and compact car reservations are up, but not at the expense of intermediate and full-size classes, which remain the majority of rentals by far. Enterprise says requests for SUVs and minivans as a percentage of overall rentals remain virtually unchanged from a year ago. This data suggests customers are still booking on the utility value of the vehicle, perhaps now more smartly so.

SUVs, minivans and large cars will still be part of the mix, and manufacturers are building them with better fuel economy and the desired amount of space.

Educate Upfront
What the media and general public don’t seem to understand is that the rate is guaranteed, not the size, make or model. (Some operators say customers still believe they can reserve a specific color.) This rule will not change until the car rental industry insists on customers paying a deposit for a rental, and that won’t happen any time soon.

But what is possible, and needed, is better education on the front end. (Try finding the “rate guarantee only” stipulation on any car rental companies’ Web page!) Perhaps RACs think customers will take their business elsewhere if they sense that they may not get the car class they reserved. But being more forthright with this rule upfront will alleviate some of the rancor directed at your counter reps later.

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Customer service equals customer education. Know the fuel economy numbers on all your cars. Customers won’t always take your word for it, so keep the new car window (Mulroney) sticker and show it to your customers.

Take it one step further: If you don’t have the car, offer to check your competitors and set up a reservation. Often other RACs will be in the same boat and the customer will stay with you.

The market is in the midst of correcting itself. Manufacturers are introducing a slew of new models with smaller, European specs, and those will make their way into rental fleets. They won’t be as cheap as before—and hopefully rates will keep pace.

So if you can deal with these new realities and weather the depressed values on your SUVs, you’ll survive. And if you can exploit opportunities in the midst of this shift, you might even thrive.

Finding New Opportunities
If you’re an independent or a smaller licensee you know you won’t be competing with the big guys on economy car rates anyway. So look to make your rentals less of a commodity—try to sell “the fun of the trip.” Convertible prices are down at auction. Can you pick up a few off lease and rent them?

Van business is up as families share rentals on vacation to save money. Can you tap this market in your area?

Airfare is through the roof. Ron Westley, a U-Save licensee in Akron, Ohio, is putting together a brochure to show corporate business that renting a car will save money and avoid the airport hassle for trips within a 300-mile radius. Can you do the math?

In this economy, an Auto Rental News mantra becomes more pertinent than ever: Find your niche.

 



Chris Brown is executive editor of Auto Rental News. He can be reached at chris.brown@bobit.com.

 

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