Table of Contents
Executive Summary
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- Figure 1: Total US car rental revenues and fan chart forecast ($ billions), at current prices, 2010-20
- The issues
- Relatively few are members of a car rental loyalty program
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- Figure 2: Membership in a car rental loyalty program, March 2015
- Renters are not confident in their choices
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- Figure 3: Attitudes toward earning rewards, finding deals, and obtaining value, March 2015
- Pain points lead to dissatisfied customers
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- Figure 4: Top five car rental pain points, by car rental loyalty program membership, March 2015
- The opportunities
- Increase revenue with car-sharing services
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- Figure 5: Number of car-sharing members in the US, 2009-14
- Appeal to renters using their desired loyalty rewards
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- Figure 6: Top five most desired loyalty rewards, by car loyalty program membership, March 2015
- Engage loyalty program members with email communications
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- Figure 7: Best tactics for prompting engagement with travel loyalty programs, March 2015
- Tap into the fun of travel
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- Figure 8: Attitudes toward the excitement of renting a car, March 2015
- What it means
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The Market – What You Need to Know
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- Steady growth in the car rental market expected to continue
- Increases in travel, zero-car households should help drive market
Market Size and Forecast
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- Steady revenue growth expected within car rental industry
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- Figure 9: Total US car rental revenues and fan chart forecast ($ billions), at current prices, 2010-20
- Figure 10: Total US car rental revenues and forecast ($ billions), at current prices, 2010-20
Market Perspective
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- Growth in transportation sector exceeds all others
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- Figure 11: Total US transportation market value ($ billions), 2009-14
- Figure 12: Value sales for transportation, at current and inflation-adjusted prices, 2009-19
Market Factors
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- US travel expenditures continue to rise
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- Figure 13: US travel expenditures and forecast (in $ billions), 2008-17
- Travelers fly in record numbers in 2014
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- Figure 14: Passengers on all scheduled US-based (millions), domestic and international, 2003-14
- Travel sentiment continues trending up
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- Figure 15: Traveler sentiment index, March 2007-February 2015
- Gas prices remain relatively low
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- Figure 16: US all-grades, all-formulations retail gasoline prices (dollars per gallon), May 2005-April 2015
- Zero-vehicle households become more common
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- Figure 17: US households without a vehicle, 2005-12
Key Players – What You Need to Know
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- Three companies dominate the market
- Car sharing is on the rise
- Tech and mobile innovations are increasingly important
- One-way car rentals have hit US soil
Market Leaders
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- Three companies dominate the market
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- Figure 18: Car rental company revenues (estimated) and market share, FY 2012 and FY 2014
What’s Working?
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- Car-sharing/short-term rentals pulling in $400 million
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- Figure 19: Zipcar, landing page, September 2014
- Rental companies witness increase in demand for luxury cars
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- Figure 20: National, email advertisement, April 2015
- Rental companies grow their environmentally friendly fleets
- Distinct brands work to attract specific consumer subsets
- Mobile booking apps used by one in four car renters
What’s Struggling?
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- Loyalty programs struggle to engage members
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- Figure 21: Average number of loyalty memberships per household and active program participation rate, 2010-14
- Stagnant growth in ancillary revenues
What’s Next?
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- Companion apps/travel guides increase brand engagement
- Access apps allow renters to unlock vehicles with their phones
- P2P car-sharing companies gain traction
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- Figure 22: RelayRides, “How It Works: RelayRides Peer to Peer Car Rentals,” Aug. 25, 2012
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- Figure 23: Getaround, “Getaround – How It Works,” Sept. 9, 2014
- One-way and ‘drop-off-anywhere’ rentals make renting more convenient
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- Figure 24: Zipcar, “Zipcar One Way | City Transportation Made Even Easier,” May 1, 2014
The Consumer – What You Need to Know
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- The percentage of adults renting cars increased slightly in 2014
- Few are members of car rental loyalty programs
- Renters want to engage with brands online
- Many renters are frustrated by inconveniences in the process
Car Rental Usage
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- Vehicle renting is back on upswing
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- Figure 25: Share of adults and total adults who rent vehicles, 2004-14
- Most car renters rent for personal/leisure purposes
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- Figure 26: Past 12 month vehicle rental use, by purpose (business versus personal), 2004-14
- Though fewer rent for business, business travelers rent more often
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- Figure 27: Number of times rented a vehicle in the past 12 months, percentage all and business versus personal (mean), November 2013-December 2014
Car Rental Company Used
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- Enterprise is most popular; travelers tend to use Hertz, Avis for business
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- Figure 28: Brands used by car renters in the past 12 months, business use versus personal use, November 2013-December 2014
Car Rental Loyalty Programs
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- Only two in 10 are members of car rental loyalty programs
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- Figure 29: Membership in a car rental loyalty program, March 2015
- Most renters think rewards are too difficult to earn
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- Figure 30: Attitudes toward car rental loyalty programs, March 2015
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- Figure 31: Hertz, email advertisement, January 2015
Best Tactics for Prompting Engagement with Travel Loyalty Programs
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- Car renters prefer engagement via email, online portals
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- Figure 32: Avis, “Avis What Drives You – Blake Mycoskie,” online video, Feb. 24, 2015
- Figure 33: Best tactics for prompting engagement with travel loyalty programs, March 2015
- Ideas for improving the online user experience:
- Millennials more likely to want information via mobile devices
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- Figure 34: Best tactics for prompting engagement with travel loyalty programs, index to average by age, March 2015
Appeal of Specific Loyalty Rewards
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- Nearly half of car renters want to earn free rentals
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- Figure 35: Interest in specific types of loyalty rewards, by car loyalty program membership, March 2015
- Older renters want freebies, younger renters want convenience
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- Figure 36: Interest in specific types of loyalty rewards, by age, March 2015
Methods Used to Reserve a Rental Car
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- Half of recent car renters booked directly on a company site
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- Figure 37: Methods used for reserving a rental vehicle in the past two years, March 2015
- Loyalty program members less likely to need guidance when booking
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- Figure 38: Methods used for reserving a rental vehicle in the past two years, by car loyalty program membership, March 2015
Types of Vehicles Rented
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- Midsize/large vehicles are most commonly rented, preferred type
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- Figure 39: Types of vehicles rented in past two years and preferred type of rental vehicle, March 2015
- Younger consumers tend to prefer smaller, less expensive vehicles
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- Figure 40: Top five preferred rental vehicle types, by age, March 2015
Car Rental Pain Points
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- No pain, no gain? Renters want companies to streamline the rental process
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- Figure 41: Car rental pain points, March 2015
- Loyalty members tend to expect more from companies
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- Figure 42: Car rental pain points, by car loyalty program membership, March 2015
Attitudes toward Renting a Car
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- Green Machines: Many renters seek out environmentally friendly cars
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- Figure 43: Attitudes toward fuel efficiency and going green, March 2015
- Alternative lifestyles: Renters use multiple forms of transportation to get around
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- Figure 44: Attitudes toward fuel efficiency and going green, March 2015
- Paradox of Choice: Renters may need a helping hand when selecting car rental services
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- Figure 45: Attitudes toward findings deals, March 2015
Consumer Segmentation
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- Figure 46: Car rental consumer segments, March 2015
- Segment 1: As Needed (43%)
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- Figure 47: Demographics for the As Needed car rental segment, March 2015
- Car rental profile
- Segment 2: Hunter Gatherers (35%)
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- Figure 48: Demographics for the Hunter Gatherers segment, March 2015
- Car rental profile
- Segment 3: Free Upgrades (22%)
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- Figure 49: Demographics for the Free Upgrades segment, March 2015
- Car rental profile
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Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Fan chart forecast
- Consumer survey data
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
Appendix – Market
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- Figure 50: Total US car rental revenues and forecast, at inflation-adjusted prices, 2010-20
- Figure 51: Number of rental cars in service, 2010-15
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Appendix – Consumer
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- Figure 52: Past 12 month vehicle rental, Fall 2004-14
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- Figure 53: Past 12 month vehicle rental use, by purpose (business versus personal), Fall 2004-14
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- Figure 54: Number of times rented a vehicle in the past 12 months, percentage all and business versus personal (mean), November 2013-December 2014
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- Figure 55: Car rental brands used in the past 12 months, business versus personal use, November 2013-December 2014
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