Car Rental Revenues at an All-time High
Industry enjoying record returns during an otherwise unpredictable year
At the start of 2019, players in the car rental industry were understandably nervous. The economy as a whole was on shaky ground, with predictions of all-out trade wars between major powers. And in the industry itself, there was a lot of trepidation over any loss of market share on behalf of new car-sharing entrants.
It’s a different story as this year draws to a close. The inclusion of ride-sharing competitors like Lyft and Uber didn’t create the level of havoc previously feared. Both companies failed to realize the expected returns after deciding to get into the stock market. It also didn’t help either firm that headlines were rife with anecdotes about poor service from fleet operators that included assaults. And politically, car rental companies generally felt relieved about state legislation that may have otherwise favored ride-sharing rivals.
On Wednesday, Auto Rental News revealed that the car rental industry earned nearly $31 billion worldwide during the year, which is being declared a record. The 2019 tally exceeds the $30 billion mark set the previous year, a 5.3 percent increase.
Not surprisingly, Enterprise Holdings, which includes companies Alamo, Enterprise and National, led the charge by raking in $16.9 billion. Hertz, which also owns Dollar, Thrifty and Firefly, was second at nearly $6.5 billion, followed by the Avis Budget Group at $5.2 billion. Rounding out the top five were Sixt at $365 million and Advantage at $360 million.
The lower-than-expected returns from the ride-sharing segment wasn’t the sole factor that contributed to better car rental performance. Increasing use of technology was cited as a major driver of financial activity. All major players used car connectivity to help boost revenues, cut costs and improve fleet management.
Enterprise fared the best when it came to branding and service with more offices around the world than any of their competitors, using connectivity to gather more consumer data to improve its marketing. But it garnered a great deal of attention during the spring when it diversified its consumer options by adding a two-tiered monthly subscription program, an innovation that Hertz introduced a few weeks later. Avis introduced a more versatile user-friendly mobile app to boost consumer choices including a bill-splitting feature enabling users to divide a booking payment between debit and credit cards.