Car rental suppliers are reporting a sharp drop in bookings
in the months ahead, though most are continuing operations amid the Covid-19
outbreak.
Within the U.S., domestic car rentals have fallen between 50
percent and 80 percent month over month from February into March, according to
the American Car Rental Association. Earlier this week, Avis Budget Group said
that while it had started the year with strong revenue growth, reservations
began to fall off in March. In April and beyond, reservations are down 60
percent and appear likely to decline further.
As such, Avis Budget Group is looking to cut more than $400
million in costs, including cutting vehicles and staffing levels to match
demand, pausing capital spending and possibly cutting compensation for senior
employees. The company also has withdrawn its financial outlook for the year.
Still, business continues. Enterprise Holdings, for example,
said that "a large network of branch locations" are still running,
though some rental locations are closed. Sixt also said most of its locations
"are generally open and following their regular business hours"
although there are restrictions in highly affected areas, such as Spain, Italy
and Austria. The companies also report stepped up cleaning procedures for
vehicles and branch locations to prevent spread.
While car rental cancellation policies are generally less
restrictive than other travel categories, the suppliers are relaxing those as
well. Enterprise, for example, has extended its no-fee cancellation policy to
include pre-paid rentals booked directly, and Hertz has done the same for
affected areas. Hertz lowered its renter age from 20 to 18 to help college students
who unexpectedly must return home. Avis has waived its fee for drivers between
21 and 24 in age.
Dealing with a suddenly parked fleet has been another
challenge for the industry, according to the American Car Rental Association,
which some suppliers have turned into an opportunity to help with relief
efforts. In an interview with The Wall Street Journal, Hertz CEO Kathryn
Marinello said the company is using its idle fleet to offer free rentals to
health care workers.