BTN 2023 CAR RENTAL SURVEY & REPORT

Criteria In Detail

National had the highest score for 11 of the 12 criteria. Avis was the lead scorer for negotiating pricing and amenities. Enterprise placed second for nine of the criteria. Hertz was the only brand that showed improvement year over year in all 12 criteria.

"I believe National and Enterprise finish one and two [because] we do nothing before discussing everything with employees and the customer base," EHI SVP of business rental sales and global corporate accounts Don Moore said. "We made transactions more frictionless than prior to the pandemic. Our apps are a huge piece. Then we launched a new internal system. ... We combined Enterprise and National into one system … and that makes it faster for employees to service the customer."

National and Enterprise also have account managers and sales reps handling both brands for corporate clients. Each also improved their scores significantly for complaint resolution.

"Friction happens when you don't listen when something goes wrong, and we are not perfect," Moore said. "The good news is our customers reach out to the account team and ask for help and don't let it bubble up to a branch level or layers of management. We have the autonomy to fix problems as they happen. We will make mistakes, but it's how you handle the mistakes that customers will see in the long run."

Hammond noted that the parent company Enterprise Holdings, Inc. is recognized as one of the best places to work as rated by employees. "I think it shows that if you have happy and motivated employees, that will result in good customer service," he said.

"They're the same company; that helps you understand what is going on there," Zaffino said. "They are a private company, and they're very stable and never went bankrupt. They're also the largest out there with the most vehicles. That helps with availability."

Availability and ease of booking was the highest-rated criteria for the brands overall, increasing to 4.23 from 4.16. Close behind was relationship with account managers and sales reps at 4.22 versus 4.09 in 2022. Third, and showing the most improvement was clean, well-serviced cars, coming in at 4.17 compared with 3.99 last year.  

Most sources credited the increase in vehicle availability and newer cars for fleets for the first and third criteria. It was a little more nuanced for relationship management.

"What we have seen with account managers and sales reps is a willingness to go above and beyond to support their corporate customers during a fairly rough year," Herman said. "We heard from all our reps that if you need help finding an available car, or a car in a certain market, let us know so we can a) help you find a car in that specific instance, or b) work with our locations to potentially grow their fleet and move cars around locations. It was really an all-hands-on-deck approach to client management."

The lowest scores were for communication with buyers about changes (4.01), quality data and reporting (4.02) and negotiating pricing and amenities (4.03).

For the latter, costs are up across the board, and some sources noted that companies are renegotiating corporate contracts with higher rates. Hertz executives said as much during quarterly earnings calls.

"Historically, contract rates and proposals remained relatively flat," Herman said. "Over the last 12 months, we've seen an increase in proposed costs to clients. Most vendors recognize that procurement isn't going to support massive increases, and vendors are willing to get creative in pricing models to help support or retain or win new business. But by and large, we are seeing those proposals come in at varying levels of increased rates."

Herman also noted that vendors are being more selective in the clients they work with and whom they are willing to negotiate with, "especially because retail rates are still sky high," she said. "There is an opportunity for many vendors to say, 'We can't lose money on your account any more or operate with super small margins. If you aren't willing to accept this offer, we'll move to secondary at a higher rate or walk away completely.' "

Hammond, too, has seen rate increases for corporates and explained what he meant by "stealth" charges. They're more behind-the-scenes costs, such as city surcharges, or it could be that preferential rates for certain cities have gone away, he said. There also are additional mileage charges for one-way rentals.

"We're also seeing some changes in weekly and monthly multipliers, particularly weekly," Hammond said. "We used to see weekly as five times the daily rate. Now it's six times or 5.5 times. It's more difficult to evaluate."

Avis took the lead in negotiating pricing and amenities. Avis Budget Group SVP of sales Beth Kinerk said the company’s skilled sales team and account representatives worked hard toward that.

"We are always assessing ways to innovate the experience, and I cannot say enough about our sales team and account management and operations team that worked tirelessly to exceed the expectations every time, for every rental," Kinerk said, adding that the company is "thrilled" to report seeing a very healthy volume of corporate travel and more commercial business than in the past.

"It's really pivotal we continuously have those conversations, and we are really tight with our customers," she said. "For us, it's about transparency and having that open and honest conversation with our customers. It's making sure there are no surprises."

While ratings for upgrades and service for VIP travelers remained in the middle of the pack overall, they nevertheless declined. One possible reason could be that pre-pandemic, car rental companies had the luxury of upgrading bookings—if someone booked a full-size vehicle, they might get higher-class luxury car, or if they booked a mid-size car, they would get a full-size one, Hammond said. "Pricing pressures maybe had car companies realign so those booking a medium car get a medium car. I would not be surprised to see that happen."

Herman noted that while fleets have been replenished, "most vendors are still operating with older vehicles, and holding onto the fleet longer, so the brand-new shine upgrade may not be as readily available," she said.

Hertz' Scores Leap

Though it barely missed out on third place, last year's fifth-place brand made significant strides forward this past year, improving to an overall score of 4.069 versus 3.85 in 2022. The company also went through and emerged from bankruptcy and a restructuring during Covid-19.

It tied for second in clean, well-serviced cars and was second for upgrades and service for VIP travelers.

"They've really made improvements in leaps and bounds in so far as improving IT, customer service and the availability of the car is the other piece," Zaffino said, adding that Hertz has better inventory management now, and is keeping fleet size on the demand curve.

"You would expect them to be stressed as they were going through restructuring and emerging, but you would hope they would recover after that, as they have done," Hammond said, adding that when taking in margin of error, "they're within 5 percent of the leaders of the moment, so they are back close to the top. They are fairly close as one would expect."

Driving Trends

Mobile apps continue to experience avid use among car rental customers—and suppliers continue to look for ways to enhance the app experience. National scored highest for mobile app functionality, but Avis was just two hundredths of a point behind.

Moore noted that customers of both National and Enterprise could easily bypass the counter and self-serve through the mobile apps, but that the company also has enhanced its greeter system in parking lots for customers who may need help. "Anytime you can make the process faster especially for road warriors, those are some of the things we did to speed up the customer and the employee," he said.

"Customers are asking for a more expedited process," AvisBudget Group's Kinerk concurred. "The touchless experience is right in our wheelhouse. … It goes back to technology and our app. It's just so easy to be able to book your car, change your car. That's the beauty of it. With QuickPass, you can choose your car, skip the counter and use the express exit."

Both Moore and Kinerk also commented on the rise of blended travel and the impact those rentals are having on the business.

“Bleisure is more prominent than in the past,” Kinerk said. “Someone is on a business trip and decides to stay over a couple more days. There’s more than we saw pre-pandemic.”

Moore agreed. "Our length of rental is up for two reasons," he said. "People tend to drive further to meetings, choosing that instead of flying. The other reason is bleisure rentals."

A Sustained Push for Sustainability

All evidence—including government regulation around emissions and funding for charging infrastructure—points to sustainable car rental as an enduring shift for the industry. All the major brands offer hybrid or electric vehicles. Hertz has been the most public about its EV purchases from Tesla, Polestar and GM, and about its goals.

Around 43 percent of BTN survey respondents said sustainability was a component of their car rental programs, but some BTN sources were surprised it wasn't higher.

"It's a huge shift in the car rental market," ACRA's Scott said. "I'm surprised the number is as low as it is. Virtually every corporation in America is making sustainability pledges. Sustainable transportation—whether higher mileage cars or electric vehicles or hybrid—is becoming part and parcel of Corporate America’s sustainability goals. The same with the car rental industry."

For Herman, the EV conversation is "fascinating for a few reasons," she said. Having EVs at a reasonable rate is one component. But "having travelers be ready for an EV rental more broadly and more EVs than other vehicles showing up in rental lots causes potentially a whole education to a travel program that we haven't had to address before. Are business travelers allowed to expense EVs? Are they part of the travel policy?"

More than 61 percent of buyer respondents who have sustainability in their rental programs said their rental suppliers could fully or mostly meet their sustainability needs. Nearly 39 percent said their supplier met none, few or just some of their sustainability needs.

Having the infrastructure to support EV fleets is another factor. Will hotels have enough charging stations or will programs need to steer travelers to hotels that have them? What is the EV charging etiquette at a hotel? Can the car be kept there overnight or is there a time limit? Herman asked.

"All those things need to be worked out in policy and training and the education of travelers before it becomes a widely accepted option for travelers," Herman said. "And I think there is quite a bit of work the industry has to do there."