MarginFuel CEO Andrew Pascoe participated as a panelist at the 2019 International Car Rental Show (ICRS) for the Tuesday morning breakfast keynote address, titled “Car Rental, a Global Perspective.”
Pascoe presented alongside Leo Cai, executive VP at E-Hi, Richard Lowden, CEO of GreenMotion, and Paulo Gaba, CEO of EruopCar Brazil.
The presentation aimed to bring insight into the challenges and solutions in various car rental markets around the world.
Pascoe highlighted these key points:
1. A dynamic marketplace
Frequent pricing changes are a key feature of the current APAC marketplace. This will continue to become even more dynamic into the future. To keep up with the dynamic nature of pricing in the region, business owners need to harness and adapt technology to optimize price at scale.
The industry is growing rapidly, due to low entry barriers leading to an increase in commoditization. For example, the New Zealand market is made up of 49% independent operators, which is twice as high as North America. What this means is that business owners need to find ways of differentiating themselves while staying on top of market movements, and matching price to value.
3. Many sales channels
An increasing number of sales channels are being utilized by operators in the APAC region. Since 2014, there have been double the number of bookings coming through OTAs when compared to the US and Europe. For operators to thrive in this market, they need to be offering the right channel, the right amount of inventory, at the right price at the right time. Dynamic Channel Price management is coming to the market and will be a key tool in the future.
4. Morphing markets - the rise of ride-share
There’s a morphing of the car rental, ride hailing and ride sharing sectors. Customers in APAC are starting to use these services interchangeably and operators need to have the multi-level service platforms and strategic partnerships to take advantage of such new developments.
5. Fleet management - one-way rentals
Managing one-way rentals is also an important trend in the APAC market. Operators are missing out on revenue if cars in their fleet are not in the right location to meet customer demand. Not only that, but they’re spending money they shouldn’t have to by relocating their fleet. The solution is for operators to have effective and accurate demand forecast models that predict where fleet needs to be, and then having the ability to price at a directional level to maximize revenue and minimize relocation costs.