Car Rental - US
Report description
As a result, an expectation is growing that companies in any industry should be able to meet the consumers’ needs quickly and remotely, from any location. Empowered with social media, consumers have the ability to broadcast discontent to thousands of users. Car rental companies need to adapt to the shifting needs of today’s consumer, or risk being left behind. Clearly recognizing this, senior management have gone on record saying:
Countries covered: United States
Table of contents
What you need to know
Definition
Data sources
Sales data
Consumer survey data
Advertising creative
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
Car rental revenue recovers from significant drop in 2009
Enterprise leads rental market in fleet size, locations
Hertz increases revenue for second straight year as business travel rebounds
Avis aims to buy Dollar Thrifty despite declining revenue
Avis-Dollar Thrifty merger signals further industry consolidation
Fox Rent A Car one of a few growing small operators
Business travel picks up with improved economy
Leisure travel increases as consumer confidence returns
Push for electric and hybrid vehicles as high gas prices return
Car sharing threatens car rental market…
…although car rental companies investing more in car sharing
Over half book cars online; nearly half do so via company website
Less affluent and Hispanic consumers more likely to rent on-site
Compact most preferred class for personal and business use
Those aged 25-34, Hispanics more likely to purchase options
Nearly half of respondents use social media, suggesting opportunity
MARKET SIZE
Key points
Car rental revenue recovers from significant drop in 2009
Figure 1: Total car rental revenues, at current prices, 2005-10
Figure 2: Total car rental revenues, at inflation-adjusted prices, 2005-10
Fleet sizes stable following sharp decline in 2009
Figure 3: Total number of rental cars in service, 2005-10
MARKET DRIVERS
Business travel picks up with improved economy
Figure 4: Number of U.S. business travel trips, 2006-11
Leisure travel increases as consumer confidence returns
Figure 5: Number of U.S. leisure travel trips, 2006-11
Avis—Dollar Thrifty merger signals further industry consolidation
Push for electric and hybrid vehicles as high gas prices return
Auxiliary revenue sources vanish as smart phones become standard
Major car rental companies investing in car sharing initiatives
COMPETITIVE CONTEXT
Car sharing threatens car rentals through accessibility, low cost
Car rental companies entering car sharing market
Car sharing taps markets on campuses and in corporations
Daimler AG first car manufacturer to enter car sharing arena
RelayRides creates online car rental auctions between individuals
SUPPLY STRUCTURE
Key points
Enterprise leads rental market by far
Figure 6: Number of rental cars in service by company, 2008 and 2010
More than one third of nation’s locations owned by Enterprise
Figure 7: Number of car rental locations by company, 2008 and 2010
SUPPLIER PROFILES
Key points
ENTERPRISE HOLDINGS
Key points
Enterprise expands with purchase of Alamo, National Car Rental
Figure 8: U.S. revenues for Enterprise Holdings, 2005-10
With local rental focus, Enterprise picks up consumers
Enterprise named top brand in satisfaction survey for seventh consecutive year
HERTZ
Key points
Hertz increases revenue second straight year as business travel rebounds
Figure 9: U.S. revenues for Hertz Holdings, 2005-10
Outbid for Dollar Thrifty, Hertz looks to expand Advantage brand
Hertz Rent2Buy lets consumers buy former rental cars
Hertz major provider of customer loyalty programs
AVIS BUDGET GROUP
Key points
Avis revenue declines for second straight year, though fleet growing
Figure 10: U.S. revenues for Avis Budget Group, 2005-10
Avis discontinues no-show fee
Avis outbids Hertz for Dollar Thrifty, making Avis second largest company
DOLLAR THRIFTY AUTOMOTIVE GROUP
Key points
Dollar Thrifty rebounds after steep decline
Figure 11: U.S. revenues for Dollar Thrifty Automotive Group, 2005-10
Despite pending merger, business as usual for Dollar Thrifty
OTHER
Key points
Fox Rent A Car one of a few growing small companies
Figure 12: Revenues for other car rental companies, 2008 and 2010
Overall revenue of independents declined
BRAND QUALITIES
Hertz makes its green energy initiatives known
Fox Rent A Car goes blogging
National focuses on business travelers
INNOVATIONS AND INNOVATORS
Rent Centric links hotels and independent rental companies online
E-Z Rent-A-Car launches radio frequency tracking
Avis’ Early Access Program lets dealers buy used cars direct from lots
MARKETING STRATEGIES
Marketing strategy: Using social media promotions to gain followers
Marketing strategy: Avis becomes leader in mobile apps
CarRentals.com lets users compare on the go
Marketing strategy: Provide interactive content with local flavor
Strategy: Marketing partnership with travel destinations
Figure 13: Alamo Rent a Car ad, 2010
Strategy: Marketing the weekend trip as simple and affordable
Figure 14: Enterprise Rent A Car ad, 2010
Strategy: Marketing to the consumer’s desire for the vehicle
Figure 15: Thrifty Car Rental ad, 2010
Strategy: Praise the seasoned business travelers and offer them priority
Figure 16: National Car Rental ad, 2010
CAR RENTAL PARTICIPATION
Key points
Less than one third of respondents rent cars
Figure 17: Vehicle rental, by gender, October 2009-June 2010
Middle-aged and older respondents most likely to rent cars
Figure 18: Vehicle rental, by age, October 2009-June 2010
Likelihood of car rental increases with household income
Figure 19: Vehicle rental, by household income, October 2009-June 2010
CAR RENTAL BRAND PREFERENCE—PERSONAL USE
Key points
Enterprise most common rental choice for respondents
Figure 20: Car rental brand preference for personal use, by gender, March 2011
Enterprise leads across all age groups; 25-34s most likely to rent
Figure 21: Car rental brand preference for personal use, by age, March 2011
More affluent households choose Hertz, Avis, National over Enterprise
Figure 22: Car rental brand preference for personal use, by household income, March 2011
CAR RENTAL BRAND PREFERENCE—BUSINESS USE
Key points
For business use, much less disparity among brands
Figure 23: Car rental brand preference for business use, by gender, March 2011
Hertz’s customer base skews to older business travelers
Figure 24: Car rental brand preference for business use, by age, March 2011
Enterprise, Hertz lead among respondents from most affluent households
Figure 25: Car rental brand preference for business use, by household income, March 2011
HOW RENTAL CARS ARE BOOKED—PERSONAL USE
Key points
Nearly half of respondents rent cars via operator websites
Figure 26: Car rental method for personal use, by age, March 2011
Online booking via website most common among most affluent
Figure 27: Car rental method for personal use, by household income, March 2011
HOW CONSUMERS BOOK RENTAL CARS—BUSINESS USE
Key points
Majority of business use car rentals reserved online
Figure 28: Car rental method for business use, by age, March 2011
More affluent respondents rent from company websites
Figure 29: Car rental method for business use, by household income, March 2011
LENGTH OF BOOKING FOR RENTAL CARS—PERSONAL USE
Key points
Personal use rentals average 5.75 days among respondents
Figure 30: Length of car rental for personal use, by gender, March 2011
Length of rental for personal use increased with age
Figure 31: Length of car rental for personal use, by age, March 2011
Respondents from highest-earning households rent cars longest
Figure 32: Length of car rental for personal use, by household income, March 2011
LENGTH OF BOOKING FOR RENTAL CARS—BUSINESS USE
Key points
Respondents most likely to rent for business use for one day
Figure 33: Length of car rental for business use, by gender, March 2011
WHICH VEHICLE CLASS CONSUMERS RENT
Key points
Compact is most preferred class for personal and business use
Figure 34: Rental car class chosen for personal or business use, by gender, March 2011
WHICH VEHICLE CLASS CONSUMERS RENT—PERSONAL USE
Key points
One quarter of respondents rent compact cars for personal use
Figure 35: Rental car class chosen for personal use, by gender, March 2011
Younger respondents more likely to rent SUVs for personal use
Figure 36: Rental car class chosen for personal use, by age, March 2011
WHICH VEHICLE CLASS CONSUMERS RENT—BUSINESS USE
Key points
Respondents traveling for business most likely to book compact cars
Figure 37: Rental car class chosen for business use, by gender, March 2011
OPTIONS CONSUMERS PAY FOR WHEN BOOKING RENTAL CARS
Key points
Respondents’ option choices indicate consumer education lacking
Figure 38: Chosen personal use rental car options, by gender, March 2011
Respondents aged 25-34 more likely to purchase options
Figure 39: Chosen personal use rental car options, by age, March 2011
Respondents from most affluent households less likely to purchase add-ons
Figure 40: Chosen personal use rental car options, by household income, March 2011
VACATION RENTAL, SOCIAL MEDIA USAGE, SMART PHONE OWNERSHIP, AND FAMILIARITY WITH CAR SHARING PROGRAMS AMONG CAR RENTERS
Key points
Nearly half of respondents who rented a car visit social network sites
Figure 41: Vacation rental, social media usage, smart phone ownership, and familiarity with car sharing
programs among car renters, by gender, March 2011
Nearly half of respondents aged 25-34 who rented a car own smart phones
Figure 42: Vacation rental, social media usage, smart phone ownership, and familiarity with car sharing
programs among car renters, by age, March 2011
RENTAL CAR LOYALTY CLUB PARTICIPATION
Key points
Hertz is industry leader in loyalty club participation
Figure 43: Rental car loyalty club participation, by gender, March 2011
Age as an indicator of membership varies among industry clubs
Figure 44: Rental car club participation, by age, March 2011
Club participation highest among most affluent households
Figure 45: Rental car loyalty club participation, by household income, March 2011
IMPACT OF RACE AND HISPANIC ORIGIN
Key points
Asian respondents most likely to have rented a car
Figure 46: Vehicle rental, by race/Hispanic origin, October 2009-June 2010
Hispanic respondents more likely to rent from Enterprise and Hertz
Figure 47: Car rental brand chosen for personal use, by race/Hispanic origin, March 2011
Hispanic respondents renting for business use choose Enterprise
Figure 48: Car rental brand chosen for business use, by race/Hispanic origin, March 2011
Hispanics surveyed more likely to rent on-site
Figure 49: Car rental method for personal use, by race/Hispanic origin, March 2011
Black respondents twice as likely to rent in-person for business use
Figure 50: Car rental method for business use, by race/Hispanic origin, March 2011
Black respondents more likely to upgrade when renting for personal use
Figure 51: Rental car class chosen for personal use, by race/Hispanic origin, March 2011
Hispanic respondents more likely to purchase add-ons
Figure 52: Chosen personal use rental car options, by race/Hispanic origin, March 2011
Hispanics more likely to use social media and own smart phones
Figure 53: Vacation rental, social media usage, smart phone ownership, and familiarity with car sharing
programs among car renters, by race/Hispanic origin, March 2011
APPENDIX: OTHER USEFUL CONSUMER TABLES
Length of car rental and race/Hispanic origin
Figure 54: Length of car rental for personal use, by race/Hispanic origin, March 2011
Chosen class for rental for personal use by household income
Figure 55: Rental car class chosen for personal use, by household income, March 2011
Vacation rental, social media usage, smart phone ownership, and familiarity with car sharing
programs among car renters and household income
Figure 56: Vacation rental, social media usage, smart phone ownership, and familiarity with car sharing
programs among car renters, by household income, March 2011
APPENDIX: TRADE ASSOCIATIONS
APPENDIX: RESEARCH METHODOLOGY
CONSUMER RESEARCH
Primary Data Analysis
Sampling
Global Market Insite (GMI)
Secondary Data Analysis
Experian Simmons National Consumer Studies
Statistical Forecasting
Statistical modelling
Qualitative insight
The Mintel fan chart
Weather analogy
Related research categories
By sector: Cars, Finance (in Finance and retail)
By market: United States (in North America)
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