Amex Survey Reports Looser Corp. Car Rental Policies

<FONT SIZE="+3"><B>Amex Survey Reports Looser Corp. Car Rental Policies</B>

By Lynn Woods

With rates going up and car rental companies attempting to tack on numerous extras to their corporate contracts, one would think companies would be tightening car rental policies for their travelers. But that's not the case, according to results of the 1996 American Express Survey of Business Travel Management.

According to the survey, which is based on responses from 1,200 companies, 12 percent of firms had no car rental policy, compared to 3 percent in 1994. Furthermore, only 41 percent of the policies require employees to refuel rental cars prior to returning them, compared to 63 percent in 1994. And 58 percent of the policies require employees to refuse the collision damage waiver on domestic rentals, compared to 73 percent in 1994.

The only cost-saving measure that gained percentage points was imposing a size limit on rental cars. That stipulation was included in 77 percent of policies in 1996, up from 70 percent in 1994.

What's going on here? Kim Lewis, vice president of the consulting services group at American Express Corporate Services, said the results reflect corporate travel managers' preoccupation with the air and hotel portions of their policy, due to significant increases in costs for both categories. In contrast, "car rental is a smaller category of T&E spending," she said. Furthermore, "a lot of rules have been rescinded because they are more of a nuisance than a help"-such as requirements to have employees refuel the car and take airport shuttle buses.

Also, as business travel becomes more stressful, companies are "loosening the rules for travelers' comfort" in car rentals, said Ed Gilligan, president of American Express Corporate Services.

Rolfe Shellenberger, a senior consultant at Runzheimer International, the Rochester, Wis.-based travel management consultancy, said the Amex results might not represent a substantive change, but rather reflect a change in the style of writing policy. "It used to be more common for people to highlight car rental because the controller's department discovered a lot of waste in that area," he said. Now, much of that waste has been eliminated, he said.

In what seems to be another anomaly, Runzheimer's 1996 Annual Car Rental Negotiations Review, which surveys 82 travel professionals, found that more companies received concessions such as unlimited mileage (92 percent) and insurance included in the rate (76 percent) than they did in 1995, when only 81 percent had unlimited mileage and 68 percent got insurance included in the negotiated rate. Shellenberger explained that the figures reflect the jump in rates in 1996 contracts: "If a car rental company increases its rate to a corporation, then the corporation wants a break." Free mileage is a good example of a concession that doesn't cost the car rental company much, he said.

In the Runzheimer study, 57 percent of respondents reported a rate increase within the past 12 months. Thirty-seven percent reported no change, while 7 percent had a decrease. The average domestic negotiated rate on intermediate cars was $38, a $3 increase over 1995's average.

The median discount off the published rate that companies negotiate-15 percent-has barely changed over the past 12 years: In 1984, it was just a point lower, at 14 percent, according to Runzheimer.

Whatever the numbers, there's no reason not to institute cost-saving measures at your firm. Here are several ways Runzheimer advises travel managers to save on car rentals:

<menu><li>In your top 10 or 20 cities, negotiate separate rates. Rates based on high-volume demand may be as much as 50 percent lower than national contract rates.

<li>Tell travelers to plan their trips so they don't waste company dollars by paying for car rental days they don't need. If they arrive at their destination airport at 4 p.m. and leave the next day at 6 p.m., they could end up paying a day's rental for those two extra hours.

<li>Take advantage of weekend rates when possible.