Under The Hood: Car Rental Companies Might Push For Rate Increases

Negotiated car rental rates are unlikely to drop into 2010, and few corporate travel buyers will look to change preferred vendors as they enter the new year, according to car rental consultant Neil Abrams, president of Abrams Consulting Group. Unlike in previous economic downturns, corporate car rental rates largely have remained steady this year, due primarily to cost trimming and improved fleet management by the major car rental companies, he said. "Usually, when demand drops, prices come crashing down, but we're not seeing that," Abrams said. "There's much more rationality in fleet planning, some of it brought on by the situation with manufacturers, and they've realized that the only beneficiary with irrational pricing is the customer." With pricing stability, most corporate buyers will have little incentive to explore vendor changes, he said. Abrams said if corporate demand begins to pick up into the next year, car rental companies could begin to push for negotiated rate increases. "They've held the line for the last year or two," he said. "Rental companies will not lose money on an account anymore. They'd rather let the account walk."

Dollar Thrifty Trims Store Portfolio
Dollar Thrifty Automotive Group in the past year has closed about 115 corporate-owned locations under the Dollar Rent A Car and Thrifty Car Rental flags in the United States and Canada, the rental car company announced in September. The firm plans to close about 10 more during the rest of 2009 as their leases expire. Dollar Thrifty has more than 700 locations in North America, and those closing are "underperforming and nonprofitable," said CEO Scott Thompson. "I am glad to report based on current economic conditions that we do not anticipate any significant additional closures in future periods," Thompson said.

BostonCoach Adds Low-Emissions Mercedes Limo
Chauffeured transportation supplier BostonCoach has added the low-emissions Mercedes-Benz R320 to its fleet in Boston, New York, Philadelphia and other cities, the company said this month. The R320's diesel-powered BlueTec engine meets stringent emissions standards, BostonCoach said, and joins an assortment of hybrid vehicles available in some markets. "We strive to achieve safety and comfort with the additional requirement of doing so in a way that does not negatively impact the environment," said BostonCoach COO Mark Munoz.

Sixt Expands Into Mexico
European car rental and car hire company Sixt AG in recent months opened 15 locations targeting Mexico's financial and tourist centers as part of a Latin American expansion plan. They include several locations in Mexico City, including the different terminals of Benito Juarez International Airport, and locations in Monterrey and Guadalajara. The new rental facilities also offer local drivers for hire with the cars.