At the Car Rental Show in Las Vegas I spoke about technology, and why we do not have to be the ugly stepsister of the travel industry. Less than two weeks later, on March 23, Delta Airlines announced a whole new class of service, Basic Economy. Delta says the service offers “lowest-priced fares” that “do not allow refunds, changes or advance seat assignments,” which are “auto-assigned during check in.” (In other words, you get a middle seat.)
Again, this shows that as long as your policies are clearly defined, you can do whatever you want.
This fare is most intriguing because it also applies to Delta’s Platinum and Diamond flyers. In other words, Delta says it will offer you the opportunity to forego the benefits the airline gives you for your loyalty in order to afford you an even lower priced fare. The Basic Economy fare can be booked through any channel, but, “add-on amenities are to be found only through the carrier’s direct channels and for a discrete fee.”
I encourage you to go to Delta.com and look at this new section called “trip extras,” where you can buy extra frequent flyer miles, Wi-Fi, etc. Welcome to car rental in the sky! And by the way, these lower prices (with all the conditions) will be on top of the search engine results, highlighting the lowest possible price.
It makes me wonder — why not us?
In the case of car rental, we should do it in reverse. Basic Economy should be an unrestricted, no-deposit reservation. We have the right to substitute the renter into a different vehicle, and possibly oversell the renter out of a reservation.
From this point, we could move up to prepaid reservations (with full payment upfront), and even a “partial prepay” reservation, where the renter only forfeits the first day and can make changes to the reservation. Buy an upgrade and the renter could convert from a basic economy to a partial prepay (and by the way, we will always give you a window seat). You could also offer any and all your counter products in advance for a non-refundable fee.
Delta is being very smart about this. It has not replaced its existing methods of accepting reservations, but it is embracing technology to be utilized in a manner that assists with marketing, yield management and ultimately seat utilization and its industries’ metric: revenue per available seat mile. There is absolutely no reason our industry should not embrace technology the same way by using whatever tools we can get our hands on to assist with marketing, yield management, daily dollar average, utilization and revenue per unit, per month.
This takes me back to my keynote address. I spoke about the incredible opportunities with text marketing. I have embraced it; have you? Since coming back from the show, I can think of five specific examples where I received a text that resulted in a commercial transaction — something as simple as a customer appreciation coupon from my local pet store giving me $10 off a $50 bag of dog food. Was our family out of dog food? No, but we would be in a week, so I bought the food anyway.
Think about fleet management and how text specials could move a one-way fleet. Did someone want to get away? Not necessarily, but maybe a text from you gets them thinking about it.
We have a choice. We can continue to operate the same old way, or we can embrace technology and create opportunities that will have a huge impact on our business regarding how it is perceived and how it can impact our bottom line. Start with your terms and conditions — update them! Think about all the opportunities technology is affording you. This is a golden opportunity for us when the airlines and hoteliers are leading the way. How many of you have looked at roomkey.com since I mentioned it at the show?
Jump on the bandwagon, and have a great summer. If anyone is looking for me, I’ll be in the window seat.
About the Author
Bob Barton is president and COO of Franchise Services of North America (FSNA), president of the American Car Rental Association (ACRA) and was a keynote speaker at the 2012 Car Rental Show. This guest editorial is the sole view of Barton, and in no way reflects the opinions of FSNA or ACRA.
For additional articles and news from the Auto Rental News May/June magazine issue, click here.