Op-Ed: No-Show Fees Lower Car Rental Fleet Costs

Just when we think the airline industry could not come up with a new way to generate revenue, Ryanair, an Irish carrier, announced a proposed fee to use a toilet on board. A Ryanair spokesperson said, "By charging for toilets, we are hoping passengers change their behavior to use the bathroom before or after the flight. That will enable us to remove two of three of the toilets and make way for at least six extra seats on board." Now Spirit Airlines has announced they will charge up to $45 per carry-on bag.

It used to be that the car rental industry had the reputation for upselling at the counter. I would suggest we are no longer at the bottom of the food chain in the minds of the travel consumer, which brings me to the subject of no-show fees.

Some in the industry have suggested that such a policy is bad for customer service and creates ill will. I would suggest that unless the car manufacturers are developing a "relief system" for which we are looking to charge an optional fee, in the eyes of the consumer, the airlines are a lot worse than we are.

In reality, a standardized policy similar to what the hotel industry has adopted, in my opinion, will actually improve customer service. We are all running tighter fleets.

West Florida was sold out this spring. I received letters from consumers who were turned away with a confirmed reservation, being told, "Well, we have the right to cancel, and you never paid, so the reservation is not guaranteed."

A no-show fee with a customer is widely accepted in the travel industry. Technology and smart phones make it easier for customers to book multiple reservations. No-show activity is growing. Yesterday, I received an e-mail from my dentist, reminding me if I do not cancel my appointment 48 hours in advance and do not show up, I will be billed for a no-show.

I decided it was time to gather some data. I had an unscientific study conducted across the country and asked 500 car rental customers at airports and consolidated rental facilities, "Would you be opposed to a no-show fee if you did not cancel your reservation within four hours of departure, and in return the car rental company guarantees your reservation, or they have to compensate you?" Ninety-one percent had no problem with the policy as long as it was clearly spelled out to them in advance. In other words, only 9 percent were not in favor—that is not opposed, just not in favor.

We have to come up with credit enhancements for fleet lending, and the credit markets are still tight. Every extra car we have is a large expenditure. If we eliminate no-shows, we can run tighter fleets and higher utilization.

This is good for customer service. A commitment to each other, just like with a dentist or a doctor: You reserve a service, pay for it or show the professional some respect for his time and cancel. There is no fee with a timely cancellation.

This is not a revenue grab, and not a channel to generate extra fees. I am sure there is not a single reader of this piece who would disagree with the statement, "If I never collect a dime, and every customer shows up or cancels in advance, I would be able to better manage my business and service my customers."

If we know who to expect, we can do a better job of servicing the consumer.

It's time.