The car rental industry is just healing itself from the aftereffects of the pandemic and economic crash that preceded it. With 2021 predicted to be the year the industry successfully comes back in full force, there are still some issues that need to be addressed and dealt with.
So what are the market opportunities and threats industry players would face this year?
Shifting the attention to the local market
Many car rentals depend on the influx of tourists all year round, from vacation tourists to business tourists cars rental companies always had business. However, with the COVID-19 pandemic and the travel restrictions imparted by governments all over the world, car rentals have suffered a loss.
Due to this, car rental companies can focus on the local market by employing smart and creative marketing tactics to encourage people to place a reservation. Many bigwigs in the industry offered discounts for healthcare workers and waived off cancellation fees. Others provided discounts for locals as many people who do not own a vehicle would have to use a rental to get about either for grocery shopping or to check on loved ones.
Competing with the ride-sharing industry
With public transport being out of the question amid a pandemic, many car-sharing companies have enjoyed an increase in demand. People have opted to travel in taxis and use carpooling services to get around as the exposure to COVID-19 is relatively less compared to buses or trains.
This poses a problem for car rentals as they now need to compete with ride-sharing companies which are relatively cheaper. However, rentals can have an upper hand in safety and use for long-distance journeys or long-term usage.
Consider reducing the price range to appease the local market and assure customers that strict disinfection procedures are followed to ensure their safety. Provide plans for long-term usage and offer discounts and other amenities and bonuses wherever possible.
Sell part of your fleet
Avis sold most of their fleet to alleviate the losses they faced due to the pandemic. This is a great tactic, however, note that the re-sale market was also hit by the pandemic and rates reduced considerably.
It is better to sell part of your fleet instead of letting it collect dust and rust away, any amount of revenue is good during this time. Rental cars usually have an upper hand over privately owned cars as fleet vehicles are relatively new and regularly maintained, making rental cars the better option for a used car buyer.
Use technology to your advantage
One way that the ride-sharing industry has an upper hand is it relying heavily on apps and websites. A versatile and user-friendly app simplifies the booking process and works great during a pandemic that requires people to practice social distancing.
Utilizing an app and/or a website for your rental business is the best decision and investment you can make during a pandemic. Many rental companies already rely on booking apps that are managed via fleet management software that allows for smooth bookings and online payments with 24-hour customer service.
Using apps and fleet management software can also help the rental business owner keep track of everything and ensure high-quality service.
In conclusion, there will always be threats to the rental industry, and business trends will keep changing, how you adapt to these challenges will decide the survival of your business.
All the best, from Navotar Car Rental Software Team!