In 2019, the focus was on how technological advancements were going to improve and help the car rental industry grow. Many major companies were looking to A.I. and how it can benefit the rental industry. The global car rental industry was propelled to a bright future but, 2020 had something very different in-store.
Any industry is quite unpredictable, but when the COVID-19 pandemic hit, many industries were heavily affected. The travel industry was hit the hardest and with it, the car rental industry suffered as well. Due to the pandemic, many governments over-the-world imposed travel bans and curfews to limit the spread of disease. The car rental industry experienced a drop in reservations and big names in the industry like, Hertz suffered many losses.
But the car rental industry is resilient and has found ways to adapt to the new normal. Here are some business trends that took off this challenging year.
Due to social distancing, many people prefer no contact services, due to this there is a demand for online reservations. Due to this car rental companies/businesses resorted to cloud-based fleet management software.
The convenience and efficiency of using fleet-management software not only helps customers, but also the business owners! Real-time reports and monitoring of reservations can greatly help business owners to track the progress of their business and fix any issues fast leading to good customer satisfaction.
Fleet-management software, websites, and apps allowing online bookings are a growing trend and will soon takeover over the counter reservations. In today’s pandemic world this has proven to be highly effective in maintaining steady business the safe way.
Navotar provides great software solutions like Rent Syst which help car rental businesses track their vehicles with GPS and real-time reports. Navotar supports all types of vehicle rentals from scooter rentals to boat rentals and more.
Many rental businesses took the safety of their customers’ and employees’ health into consideration and introduced no-contact vehicle pick-up and drop-off options. Car rental companies also followed strict cleaning procedures especially for the interior of their vehicles to do their part in curbing the spread of the virus.
To survive these testing times, adhering to health safety precautions is vital for a business to succeed. This trend may continue in the future, as many reservations are now only made online as well.
Due to the low demand for rentals especially as airports were being shut down due to travel bans and government-imposed lock-downs many car rental businesses had to reduce their rates. Even though they provided additional sanitation services, rental fees were dropped making rentals very affordable in hopes that it would encourage people to make bookings.
Florida experienced an 18% drop in rates with Canada taking a bigger hit to their rates with a 48% drop, whilst Sweden’s car rental rate reduced down 57%.
Car rental companies have always sold their older vehicles before their value depreciates, however, with the low demand for rentals many businesses have had to sell off a large number of their fleet to stay afloat. Big wigs of the industry, Hertz and Avis have become vulnerable during this time and were found to have sold a major part of their fleets.
Selling part of the fleet was shown to be a great way to bringing in fast revenue as the selling prices were lower than the car plant price tag prompting many people to opt for used rental cars over brand new ones.
The COVID-19 pandemic may have permanently affected the car rental industry, however, it has encouraged business owners to think differently and adapt fast. Global car rental industry trends will always change but it is how resilient businesses have proven to be that will help them succeed in the future as well.
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