Car Rental Industry Embracing Technology

There has been a significant rise in global travel in the last 10 years which has provided an opportunity for the car rental companies to improve and expand their services. The car rental industry has undergone a radical transformation and the car rental companies have realized the need to reinvent the way they operate in the market place.

The economic recession which impacted several sectors, including airlines and travel, severely affected the car rental market in 2008-2009 as airline travelers form a sizable chunk of the car rental customers. Leisure car rental, business car rental, car leasing and car sharing are the major segments in the car rental industry. The global car rental volume and demand experienced a steep decline as the leisure and business spending remained weak and prices for gasoline faced significant volatility. So how did the car rental market deal with these challenging times? It was mainly through price discipline, active fleet management and looking for revenue growth away from airports,  as well as through increased marketing efforts.

The environment now

The market landscape in which the car industry finds itself today is very different from what it was five years earlier. With the technological advancements, the car rental industry has also undergone dramatic changes. Due to an increasing competitive environment the industry is facing significant consolidation and is expected to consolidate even further. The car rental industry was not really a sector where rapid absorption and development of technology, including information technology has happened. Car rental organizations are now leveraging technology to control costs and optimize efficiencies so as to meet fast-changing customer demands. There is a widespread adaptation of GPS technology for tracking and optimization of their fleets. According to the industry reports, the worldwide car rental market is anticipated to grow considerably in the next few years. Growth is more likely to come from the developing markets of China and India and also from Australia and the Middle East.

Way ahead

The future of the car rental industry looks positive as business and leisure car rental is expected to grow mainly due to rise in travellers globally. The competitive nature of the car rental industry makes it challenging for organizations in this domain to attract and retain customers. Technology therefore plays a crucial role in enabling them to maintain their competitive edge through superior customer service, optimized fleet cost, improved operational efficiency and rapid growth in newer geographies and segments. An integrated car rental system can enable car rental organisations easily manage their geographically dispersed operations.

PCI DSS compliance, a plethora of mobile apps on Smartphones with lot of comfort and convenience to the customers, automated car rentals, increased revenues through direct channels like own websites are the areas where the growth would be.

Creating flexible, enterprise-wide, customer-focused, global information systems is the next source of competitive advantage for the new breed of rental car organizations.