National Scores Ninth Consecutive Win as
Industry Average Ratings Decline

Travel buyers gave car rental companies mixed results in BTN's 2024 Car Rental Survey, with three of the five rated brands garnering higher scores compared with 2023, but two declining. The average for the industry was 4.08 on an ascending scale of one to five, down from 4.12 last year.

National Car Rental secured another win, its ninth in a row, making it undefeated for as long as BTN has been conducting the survey. Its average rating was 4.27, slightly up from last year's 4.26. National's sister brand Enterprise came in second for a third year in a row with an average score of 4.16, a decline of 0.02 points. Avis secured another third-place finish, with an average rating of 4.02, down from 4.07, but its brand mate Budget moved up to fourth place with a 0.03 improvement to 3.97. Hertz landed in the fifth spot, and its score dropped 0.13 points to 3.95.

BTN 2024 Car Rental Winners' Circle

On a scale of 1 (poor) to 5 (excellent)

Source: BTN Car Rental & Ground Transportation Survey, 351 buyer-only respondents

"National created the 'pick your car, get in your car and go' model," KesselRun VP of program management Krissy Herman said. "From a corporate traveler standpoint, there is not a better method. Some of the other vendors are attempting similar type models that allow for choice and ease, but National has been doing it forever, and I think that really resonates with true corporate road warriors."

"Enterprise [Mobility] is the most profitable rental car company out there. It has been for a lot of years," industry consultant Dave Kilduff said. "They are consistently very well-run. If you look at the others, especially Hertz, it's had its ups and down. And there is the management change at Hertz. They're getting a new CEO now. Where you have consistency, especially at Enterprise, where you have rent-a-car people that have been there running the program, their consistency on excellence is not surprising."

Indeed, in addition to its latest CEO change, Hertz also had turnover in its COO and CFO positions in the past year. "We'd like to see more stability as the most significant risk is management being unable to execute on its strategy, which following the CEO's recent departure may also be in flux," BofA Securities analyst Andrew Didora wrote in a recent research note.

Criteria Ups & Downs

Average scores in individual criteria that travel buyers use to rate the companies reversed themselves from last year. Eleven of the 12 categories had declining average scores year over year after 11 showed improvement in 2023. The sole criterium that notched a gain was negotiating pricing and amenities, up 0.03 points to 3.93—but it still came in with the lowest average score of all categories.

Buyers' Ratings of Car Rental Companies

On a scale of 1 (poor) to 5 (excellent)

Industry consultants agreed that an increase for that category was a bit of a contradiction since overall prices have been going up.  

"The leisure market subsidized the rental car companies for the last two years," Kilduff said. "Leisure prices were extremely high because they could be. There is now more pressure on the corporate marketplace, because you don't have leisure subsidizing it. Or the revenue per day is not as high as it used to be, so there's some softness there. … That's the biggest thing I've seen is price increases on the corporate side, and that really hadn't been around for a while."

GoldSpring Consulting partner Neil Hammond posited that car rental pricing has probably cycled through contract terms. "Rental car company pricing recovered the soonest before anybody in the marketplace," he said. "People already suffered the worst of the negotiations. … Whether it was because rental car companies went in asking for a lot, and in some cases, they would yield—some on city surcharges, or yield on multipliers—buyers felt they got something back in negotiations. They didn't feel great, which shows the overall bad score, but they did get something out of it."

Herman said that while suppliers' initial proposals include cost increases, "across the board of all suppliers, they want to work with and partner with their clients," she said. "They're willing to get creative and make contracts still very valuable to corporate customers."

Aside from nearly all the criteria averages declining year over year, National claimed the highest score in each of the 12 categories, with Enterprise tying for communications with buyers about changes, and Budget tying for negotiating pricing and amenities.

"Every year is a new year, and we work to be as good as we can be," Enterprise Mobility SVP of business rental sales and global corporate accounts Don Moore said. "It's good to be recognized for that."

The criterium with the highest average was availability and ease of booking, at 4.27, which was nearly even with last year's average. The car crunch during the pandemic has abated, and vehicles are more readily available from manufacturers, making it easier for rental car companies to replenish their fleets. Technology also is a factor in this score.

"All the suppliers have really invested in their mobile apps," Herman said. "They are doing a lot with the mobile app to allow a traveler to land from a flight, look at their phone, know where to go and get in a car and be on their way, versus standing in extremely long lines waiting to be handed the keys."

Moore said Enterprise Mobility is experimenting with exit booth technology that will speed up transactions. If the testing goes well, it will launch in 2024 or 2025, allowing for a better experience, he said. The company also has technology in 350,000 of its 1.2 million vehicles that tracks when it might be a model with a recall, so it won't be rented out. It can identify when the car needs an oil change. "By the end of 2025, 100 percent of our vehicles will have that technology," he said. "It tells you anything you want to know from the" manufacturer.

Avis Budget VP of global accounts Beth Crimmins said in an email that the company has focused on improving the digital experience for both brands, with enhancements to both of the websites, the apps and integrations with booking tools.

For Budget, its second-largest increase was for mobile app functionality. "We improved our Budget Fastbreak experience by introducing Budget Fastbreak Choice," Crimmins said. "Upon arrival at a Budget location, travelers choose their vehicle from the reserve zone, take a picture of the license plate, allowing the rental agreement to be sent to them digitally for a quick exit at an unmanned gate. … Further expansion of Avis QuickPass and Budget Fastbreak Choice is also on the horizon."

Hertz, too, is working to update its app to "continue to drive ease of use and speed," said Hertz SVP of global and strategic sales Casey Rodriguez. "Like everybody, it's going to the phone, and we will continue to accelerate that."

Hertz also wants to drive compliance through booking tools," Rodriguez added. "It's compliance on car class, compliance on refueling, on booking using the OBT to get the appropriate rate. Compliance on using your [corporate discount], so you're getting the benefits associated with the program," he said. "A lot of what the customers are doing is trying to manage their overall program smarter."

Rodriguez added that Hertz partners with Uber and Lyft and helps to identify whether a customer should rent a car or get a ride-share. "There's always an opportunity with compliance," he said.

The criterium with the steepest year-over-year decline was clean, well-serviced cars, dropping 0.08 points to 4.15. That might seem like another contradiction, given that car rental companies have been turning over their fleets faster this past year than the previous few years, and new cars are more readily available from manufacturers.

"That's probably a little bit of a hangover from Covid," Hammond said, with staffing not quite back to pre-pandemic levels. "And even new cars need to be cleaned."

While scores in each of the remaining criteria declined, they did so by smaller amounts. Complaint resolution, relationships with account managers and sales reps, communication with buyers about changes, and quality data and reporting each dropped 0.06 points. Productivity of rental, and upgrades and service for VIP travelers each declined 0.05 points.

Still, in the open-ended comments section, several buyers singled out improved communications with their primary suppliers and the responsiveness of account managers. And despite the ratings decline, relationship with account managers and sales reps had the second-highest average score. It also tied as the second-highest category for National and was the top one for Enterprise.

"That is where it starts. A great relationship with buyers and procurement teams," Moore said. "We've always had great people in that category. It's not surprising because every person—an account manager or sales rep—started in the management trainee program. They worked in a branch, they cleaned cars. We learn the business from the ground up."

General Trends

When asked to rate overall car rental customer service, 27 percent of respondents said it had improved over the past 12 months, with another 64 percent saying it had stayed the same. Just 9 percent noted a decline in service.

During the pandemic, "when the car rental companies turned off the ability to get [shorter rentals] because of the lack of fleet, and/or [customers were] standing in line to get cars, the fleet was slow to come in, and the traveler had to wait an hour or two in line," Kilduff said. "I'm not surprised all that happened during Covid and on the fringes after. Now it's a better time."

Herman credited the rental car companies being more proactive with engagement, "not just to negotiate … but always trying to continually improve and work with those [travel managers] to meet the needs as they change throughout the course of a contract."

Hammond noted that while there has been a push by suppliers on base rates, "some of the real cost increases are in other areas." There are sometimes higher fees for one-way rentals, late returns or an unauthorized drop-off, he said. "City surcharges are getting much wider and larger and more complex. We're seeing some weekly and monthly multipliers increase."

Rodriguez said that Hertz is seeing more normalization when it comes to the leisure and business mix. "It's started to flatten out as business continues to creep up," he said, adding that the company also has seen the length of rental return to a "more traditional length. We're seeing more three to five days versus six to eight days."

Moore concurred regarding average length of rental. For a while, that figure had been as high as 8.5 days, he said. But he also noted that for non-airport rentals, the length of rental is still "relatively high. Individuals are using the car not just for business, but also for over the weekend, some leisure plus some business," he said. Avis Budget's Crimmins also noted an increase in blended business and leisure travel.

Sustainability: Chicken or Egg?

About 35 percent of respondents said that sustainability was part of their rental car program, but that figure is down from 43 percent last year. More than half (53 percent) don't even address electric vehicles in their travel policy, but 49 percent reimburse for them anyway, while 4 percent do not. About 11 percent allow and encourage use of EVs. Yet, there is an ongoing desire for greener options.

What is really happening with sustainability in the car rental market?

Hertz, which has been the leader in expanding its EV fleet, made headlines when it announced in January it would sell 20,000 EVs from its U.S. fleet, about one-third of its global EV supply, and replace them with gas-powered cars. A month later, it paused EV purchases from Polestar.

"I can tell you all the corporations out there talk about sustainability. We need to be sustainable," Kilduff said. "And guess what? Hertz went out and listened and bought a bunch of Teslas and put a lot of EVs in their fleet. But the problem is the corporations do not and did not support sustainability to the level they claim they want to be at, for a lot of reasons, whether it's price, range anxiety, and lack of infrastructure. If Corporate America does not support car rental companies and EVs, how do we expect the suppliers to put EVs in their fleets? … You need that cooperation from the corporations."

Rodriguez defended Hertz's decision. "We went really heavy into EVs, and we're proud of the work that's been done," he said, adding that the company is now right-sizing its EV fleet. "Our corporate partners have been asking for help and support from a sustainability perspective forever. It's time to put their money where their mouth is. And some are doing an exceptional job. Others are saying maybe they're not ready. … I would caution anyone to say we are not seeing demand. Some companies set a target of 5 percent EV rental transactions; some companies are doing 20 percent EVs. Would we have liked to see it grow and adopt sooner? You can't do anything until Concur agrees or GetThere says, 'Yes, we will prioritize this.' "

Still, of those buyers with sustainability in their car rental programs, 34 percent said their primary supplier was fully able to meet those needs, while another 40 percent said their supplier meets most of their needs, and 23 percent said some needs were met.

"All the suppliers have been able to come to the table and offer some kind of rates relative to EVs or hybrids in their contracts," Herman said. "Many organizations may be using it as optionality. If this is important to you as an individual, then you have the option. But until the sustainability programs are a little more mature or have some more meat behind them, that optionality gives that 'my needs are met' answer."

Moore said Enterprise Mobility was working closely with power companies, manufacturers and airport authorities, among others, to help expand power and reliability. "To deliver an outstanding experience when it comes to EVs, it goes deeper than renting a car," he said. "Communication is key. Everybody wants an EV until you really start talking about it. It may be good for half your team, or not for the other half. If we find out in advance, we can build [the right] product."

Rodriguez said that Hertz will support some customers' "sustainability weeks" and bring a few different makes and models and offer test drives. It also has EVs on hand at corporate travel industry events, as do Enterprise Mobility and Avis Budget. The company still was working on getting hotel companies involved, he added, and educating travel buyers and travel management companies was important, "because they're the ones getting most of the questions."