Car Rental A Key Factor In Savings Strategies
<B>Car Rental A Key Factor In Savings Strategies</B>
By Lynn Woods
Sure, the economy is still booming, but gasoline prices have skyrocketed, a handful of blue-chip companies haven't met their numbers and corporate downsizing continues to be a fact of life as companies consolidate and streamline their operations. Still, most executives at the car rental companies aren't noticing any shifts in their corporate accounts as a result of these developments. After all, car rental constitutes a small fraction of the total travel spend--typically between 7 percent and 10 percent, according to Tom Burns, Avis Rent a Car's senior vice president of sales. But here and there, companies are tweaking their travel policies to save money in ways that affect car rental.
One minor trend noticed by Frank Camacho, vice president of marketing at the Hertz Corp., is that some corporate travelers are choosing to rent cars to get to the airport rather than bring their own vehicles and pay for parking, which can wind up costing more at some airports. The practice is most common in sprawling cities with abundant local car rental facilities, such as the Dallas/Fort Worth area, where Hertz alone has more than 50 "Local Edition" locations.
Business travelers who lease their personal vehicles also are renting cars in local markets as an alternative to driving their own cars because they don't want to exceed the 15,000 free-mile limit that is specified in the lease. The number of travelers taking this option is substantial, given that 35 percent of cars "owned" by Americans are leased, Camacho said.
In parts of the country where airfares are high, companies are having their employees rent a car and drive to certain cities rather than fly. For example, "it costs a fortune to fly between Atlanta and Nashville, Tenn.," said Camacho. "A number of people drive the route rather than fly." And in California, the number of points redeemed in Hertz's #1 Awards program has doubled, suggesting that this is another region where renting is becoming a popular option over flying.
Jason Logan, a spokesman at Thrifty Car Rental, noted that several companies in the Tulsa, Okla., area, where Thrifty is based, require employees to rent a car rather than fly to cities within a 250-mile distance. For example, employees at one Tulsa-based architectural firm are instructed to rent a car rather than book an airline ticket when traveling to Little Rock, Ark., or Wichita, Kan.
Other companies are requiring their employees to trade down on the rental vehicle. Harold Seligman, CEO at Management Alternatives, the Stamford, Conn.-based consultancy, said a few of the corporations he's worked with specify in their policy that employees traveling alone must book a car smaller than midsize--traditionally, the primary corporate vehicle. But he wouldn't call this practice a trend, since "many companies are reluctant to put people in smaller cars because of safety."
Perhaps the most common way companies are trying to save money on car rentals is to persuade employees to fill the tank before returning the car. With refueling charges running as high as $4 or $5 a gallon at some car rental lots, the cost benefits are obvious. But the results of this policy are mixed at best, given the dearth of gas stations around many airports and the time limitations of business travelers.