Posted by: Brad Tuttle
By the end of 2011, car rental agencies will have collected record revenues of $22.4 billion, nearly $2 more than the year before.
It’s been a good year for rental car operations. A report from the industry publication Auto Rental News shows that the U.S. car rental industry will reap in a whopping $22.4 billion in 2011. That’s the highest total ever, and a noticeable rise from 2010 ($20.59 billion) and 2009 ($20.05 billion).
Where’s the money coming from? Customers, of course. For years, rental car agencies have been fine-tuning operations to trim expenses while extracting more cash out of clients. Between 2008 and 2009, for instance, average rental rates more than doubled. Anyone who has been at a car rental counter recently can also testify that agencies are pushing insurance, GPS devices, pre-paid gas, and other extras like never before as well.
At the same time, the typical rental car is older and has been driven for more miles than the average rental in the past. Auto Rental News notes that 1.32 million rental cars will be sold by agencies in the U.S. in 2011, compared to 1.41 million in 2010. What this means is that rental agencies are hanging onto vehicles longer in order to milk more revenues out of them.
For the sake of comparison, U.S. rental agencies had about the same number of cars in service in both 2011 and 2006: 1.76 million. In 2006, the average car yielded $962 per month in revenues. In 2011, though, the agencies have managed to squeeze a highest-ever average of $1,060 per month in revenues out of each vehicle.
Combine the fact that travelers are not only renting older cars, but they’re paying more for them, and it’d be expected that customers aren’t happy with today’s rental car experience. Actually, according to a recent J.D. Power study, customer satisfaction ratings for rental cars are the highest they’ve been since 2006.
Perhaps, after a decline in ratings during the recession era, when agencies were adding fees, swiftly jacking up prices, and perfecting their hard sell techniques at the rental counter, travelers today are finally accustomed to the modern-day renting experience — older cars, added expenses and all.