Corps. Using Low-Cost Car Rental

The corporate practice of using alternative, lower-cost suppliers within the airline market now has spilled over into the car rental industry, according to a report issued today by car rental consulting group Abrams Travel Data Services.

Among car rental suppliers, corporations have turned to less traditional and smaller car rental suppliers, such as Enterprise Rent-A-Car and Dollar Thrifty, which both have responded this year with new attention to the airport market and revised corporate discount programs. Smaller and medium-size companies have given these alternative suppliers the most attention, according to the study, because "these employees appreciate the amount of information including comparative pricing made immediate and transparent on the Web."

The report also cites uncertainty on the part of travelers that is affecting car rental companies, including a trend toward reservations being made closer to the travel date, and new mandates by companies to make short-haul trips by car rather than air, including trips between New York and Boston or Los Angeles to Las Vegas.

To keep fleet levels close to actual demand for cars, car rental fleets still are down by 10 percent from last year's levels in response to airline passenger traffic levels, but Avis Rent-A-Car and Enterprise, as well as lower-cost car rental firm Dollar Thrifty Automotive, are faring better with help from the corporate market, while the traditionally standard corporate favorites Hertz Rent A Car and National Car Rental are suffering.

Specifically, Dollar Thrifty has benefited from increased price-shopping and corporate travelers' increased use of such alternative car rental companies as Dollar and Enterprise, said Market Scan author Jon LeSage. Enterprise recently gained extra airport space at Minneapolis, Panama City and Knoxville airports after Alamo Rent A Car vacated the space to combine desks with National Car Rental.

As far as actual rental prices, car rental companies dropped rates this month after initial optimism in the fall business travel season dropped off, according to LeSage.

After a summer that delivered lower than expected demand and a fall season delayed until mid-September due to Sept. 11 anniversary concerns, LeSage said a rise in advance bookings in the past month promises to assist the industry, though rates actually dropped in the first week of October by an average $1.50 per day in airport markets.