The car rental
sector has boomed in the last year, driven in part by pandemic-induced trends
such as more domestic travel and consumers’ desire for private rather than mass
According to Phocuswright’s
U.S. Car Rental Market Report 2021-2025, gross bookings in the United States
were up 37% in 2021 compared to 2020 to $17.7 billion .
At the same time,
major car rental companies have struggled to have enough vehicles to meet
demand due to manufacturing backups and a global shortage of microchips.
In an interview in the PhocusWire Studio at Phocuswright Europe,
CarTrawler CEO Cormac Barry said fleet sizes are down between 30 and 50%,
driving pricing to two to three times the level of 2019 and creating a significant
impact on conversions.
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“The industry has boxed itself into a corner where it has set high
prices and now doesn’t want to lower them for fear customers will cancel and
re-book at those lower prices, so I think we’ll see sustained high prices through
the summer,” Barry said.
But along with challenges, Barry said he is seeing accelerated
innovation from suppliers – including the scaling of “straight-to-car” options and
greater adoption of electric vehicles.
“It’s really about teaching the customer about the use case,
getting over range anxiety; with that said a lot of people will try an electric
car for the first time through rental. ... I think that will be a really big trend
now over the next few years,” he said.
Joining Barry for the interview was CarTrawler chief operations
officer Peter O’Donovan who explained the work the company is doing to help
partners expand their loyalty programs.
“Airlines typically want to increase the number of interactions
they have with their customers, provide value to their loyalty programs, and they
see car rental as a really important use case to expand their offering,” O’Donovan
The two executives also discuss CarTrawler’s current
priorities, including developments related to revenue management, payments and fintech,
where Barry said they see opportunities for products related to price freezing,
upgrades and cancellation options.
“We have our data scientists... working on algorithms at
the moment, so we are looking forward to rolling out products in that space in the second
half of the year,” he said.
Watch the full interview with PhocusWire’s Mitra Sorrells
Phocuswright Europe 2022 Executive Interview: CarTrawler