Business travel car rental rates in the United States and Canada are forecast to increase between 1.5% and 2% in 2026-27, according to the latest Ground Monitor report from American Express Global Business Travel.

The forecast is based on car rental activity within Amex GBT’s corporate travel programs and should not be interpreted as a forecast for the entire leisure and retail rental market.

Amex GBT expects relatively modest rate growth in North America because vehicle availability has improved and economic growth remains restrained. New-vehicle deliveries globally have generally kept pace with demand, allowing rental companies to rebuild fleets and bring supply more closely in line with demand.

That improved availability may limit operators’ ability to generate larger pricing gains. At the same time, several fleet ownership and operating costs remain elevated.

Amex GBT used Prophet time-series modeling and its car rental transaction data to develop the forecasts. Inflation and gross domestic product projections came from the International Monetary Fund. All forecasts are expressed in local currency.

Higher Fleet Costs Pressure Rental Operations

Rising auto insurance costs remain one source of pressure for rental companies, although the pace of those increases has moderated from recent years. Amex GBT expects providers may seek to recover some of those costs through business travel pricing.

More complex vehicle technology is also adding to acquisition, repair and downtime costs. Advanced driver-assistance systems can improve safety and the customer experience, but repairs involving cameras and sensors often require specialized labor and recalibration.

Replacing the windshield on an ADAS-equipped vehicle, for example, can add as much as $1,500 to the repair bill when sensor and camera recalibration is required, according to the report.

Recalls and downtime can also force operators to carry additional inventory to maintain availability. That requirement can affect utilization and ownership costs even as the overall supply of vehicles improves.

Softer Residual Values Change Fleet Economics

Declining used-vehicle values represent another challenge for rental operators.

During the vehicle shortage early in the decade, strong used-car demand allowed some rental companies to sell vehicles at or near their original acquisition prices. Those conditions improved fleet economics and offset a portion of the vehicle’s depreciation during its rental life.

Used EV and internal-combustion vehicle prices have since declined in the United States and Europe, reducing disposal proceeds and placing more importance on revenue generated while the vehicle remains in rental service.

Amex GBT said lower used-car income and the resulting effect on rental fleet book values could contribute to higher business travel rental rates.

Amex GBT Reports Growth in Local Surcharges

Amex GBT also said it has observed “significant growth” in the number and value of city surcharges in North America.

According to the report, the additional charges can include day-of-week surcharges and fees applied at airports. Amex GBT said charges once limited to a handful of major cities are becoming more common and increasing the customer’s total rental cost.

The report did not identify the markets experiencing the increases, quantify the average surcharge, or distinguish between government- or airport-imposed fees and provider-applied charges.

For rental companies, the finding suggests that relatively moderate growth in the base business travel rate may not fully reflect changes in the final transaction value.

Improved Vehicle Availability May Affect Corporate Sourcing

Improved vehicle availability could also change how business travel programs select rental suppliers.

During periods of severe fleet scarcity, corporate travel managers often spread volume across several providers to improve access to vehicles. With rental companies rebuilding inventories, Amex GBT said it now believes consolidating a corporate rental program with one or two providers carries less availability risk.

That could create an opportunity for rental companies to secure a larger share of a corporate customer’s volume in exchange for favorable pricing, service and availability commitments.

Outside North America, Amex GBT forecasts business travel car rental rate increases of 2% to 4% in Brazil and Chile, 3% to 3.4% in Australia and 4% to 5% in the Netherlands. France and Spain are expected to remain roughly flat, while Germany and Scandinavia could record moderate increases.