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Key Issues Facing Travel Agencies for Survivability

A travel agency that wants to survive the demands of the present and future business environment can no longer simply be an outlet for distribution, or a friendly neighborhood business. Agencies that are now looking toward the future with optimism are those that have structured a business rather than a distribution outlet. This article is intended to reach those agency owners and managers who have a fairly sizable volume, have established good business relationships with corporations, and are seriously concerned about their future well-being. I hope to touch on a few areas that are of concern, giving some insight into areas that you may or may not have already targeted as vital to survival. Remember, sometimes it is the obvious that escapes us, so don’t believe that the simplicity of some of these areas is unintentional. The key to survival is overall profitability, but there are some subtle areas that affect whether or not you are profitable.

Profitability

A travel agency is a rather unique business when looked at from a profitability standpoint. It is perhaps the only retail industry that has a little or no control over its retail pricing structure. Although alternative pricing exists, it is not an effective means for the average agency to gain and/or maintain profitability. Thus, it is vital to make a careful analysis of your costs and your income.

Have you taken the time to analyze productivity; the average per transaction cost compared to the average per ticket/transaction fee revenues received? What about individual productivity? Do you have fair, firm, viable, and enforceable expectations of what your salaried employees must produce? Is your payroll in line with your business volume?

If you were asked to state by how much you wanted to increase your volume in 2012, you most probably would have a ready response. But, have you thought through what measures you will need to take to increase your volume? If you plan to increase your market share, you must keep a constantly growing and evolving prospect list and then follow-up with sales-related meetings and presentations. It will be necessary to generate new volume in order to increase profitability or in some cases just to maintain it. It is of utmost importance that your organization has a firm and tried sales and marketing strategy.

Set a goal, focus on it, and develop a plan. Measure yourself by setting 90-, 180-, 270-, and 360-day goals. Evaluate your progress along the way and give rewards to yourself and those who have helped you to reach those goals.

Another area that affects profitability is your overhead. Use the same common sense you do at home when it comes to improvement of your physical environment. There seems to be a tendency, lately, to go a bit overboard with these things, thus dramatically increasing capital costs, and depleting resources for potential investment in other areas.

Employees

Have you ever heard someone say that a company is only as “good” as its employees? The ability to attract and keep a good, solid, knowledgeable, mature staff is of great importance. State-of-the-art computerization in your office has little value without the people in place to make your operation profitable.

As the fierceness of competition in today’s agency marketplace increases, it will become more and more difficult to locate and retain the top-of-the line employees. Look for employees with a good deal of experience, or lacking that, a drive for success that can be channeled under your good management and leadership. You must begin to look toward the future and develop an employee plan that will maintain the consistency that area of the industry has lacked for a long time. Consistency in your employee ranks will greatly favor your operation. Your clients will be able to have the same friendly voices to relate to, and will not question your stability because of heavy turnover (which is also extremely costly to your bottom line).

Find out how competitive your total compensation package is. Develop “real” incentives that have goals and measures by which an employee receives rewards. Make sure the rewards have substance to them. You may even wish to develop a plan by which your employees could develop equity in your firm.

Examine your training procedures to make sure that your employees are keeping pace with the technological sophistication (changes, updates, modifications, and enhancements) required of today’s travel agents. Your employees, although not likely desire to put in more hours, would like to spend their hours more productively. If this is achieved, then both you and the employee profit. There are many low or no-cost seminars and training forums available through a variety of industry vendors. Let your employees tie into these functions. Set up a program with your automation vendor and other vendors to provide on-going training for your employees at a level suitable for the individual. Remember: sending an employee to an advanced CRS training seminar who has never worked with that particular CRS may be counterproductive. Be sure to provide training at the employee’s level of comprehension.

It may be time to take a look at the overall productivity of your employees and find out the real costs and profits of each person on your payroll. Do you have an expected level of productivity for each employee that justifies his/her salary? If not, realize that an employee earning $18,000, plus medical, dental, and life insurance needs to generate a gross sales volume of almost $250,000 in order for the company to afford the salary and benefits alone. This does not even take into account other overhead expenses – rent, utilities, other insurances, and a profit. In most operationally mature situations a good, profitable, commercial agent generates an annual sales volume of $1,000,000.

Costs

Believe it or not, you do not have to have 700 branches, in 41 states, and 12 foreign countries to achieve savings in the area of cost control. Even if you are buying for just one office, a good vendor is going to want your patronage. For every cost area, seek out three potential vendors who can provide you with the entire scope of your needs. Then do your best to ascertain what your needs will be for an extended period of time. Remember, the greater the single purchase the more efficient for the vendor, thus allowing the opportunity for greater savings to be passed on to you. Request a bid from the vendors; much in the same manner your clients have requested bids from you in order for you to obtain their business.

The cost of everything is on the rise. The days of item purchasing in business is gone simply because of the economics involved. You can achieve greater survivability by changing some of your non-fixed expenses to semi fixed expenses and it doesn’t matter if you’re a single or multi-branch agency.

If you do have more than one branch, consider the concept of centralizing costs wherever possible. Even if there is considerable distance between branches, most vendors will pick up the shipping costs to outlaying locations of an account. The purchasing power gained by centralizing as many costs as possible will bring you cost savings as well as other efficiencies that are being passed up by many agencies, today.

The control of costs in today’s arena of expense inflation will be vital to your survival over the next year or two. Not is the time to begin positing yourself in accordance with your business plan to gain the control necessary.

Industry Vendors

Forget what is in the past. This industry has a habit of being overly reminiscent, and it is costing the very lives of many agencies and seriously threatening many of those still in existence. The face of the basic industry vendor/agency relationship has been changing for quite a while, and I believe that 2012 and 2013 will prove to be the spear-hear period for those changes.

Now is the time to firmly build your alliances, and get to work with your future business plans along with your vendors. The entire distribution system as we now know it has been placed in a questionable posture. You must decide for yourself what steps are necessary for your survival. What agreements should be consummated between your agency and carriers, car rental firms, hotels, tour operators, automation vendors, etc.? Everyone is eager for your business. But, who is offering you the best overall deal in return? It is vital that you begin to explore your options, and look toward the long term. You will not be able to survive on short-term relationships which bring short-term dollars.

Most airline override agreements should be looked at as “the icing on the cake.” Too many agencies make the error of thinking of this as secure, guaranteed income. It may not be. The vast majority of carriers have turned to market share based overrides, rather than what was the traditional “increased volume” based override. Of course, there are still the occasional “other deals” floating around that can help to get some more dollars into your agency. Be aware of every dollar a carrier is offering. Flight, and/or segment cash bonuses paid at point-of-sale can generate substantial immediate dollars for you. Make sure you, and/or a reliable member of your staff is constantly in tune with these “special” offerings.” Don’t simply discard those pieces of electronic mail the carriers send you. You could be losing serious dollars. Information of pertinence is also available in all the agency CRS CO-HOST DRS pages.

Also be aware that airlines are extremely eager for your group business, and in some cases, you may be pleasantly surprised to find out how few people an airline will consider a group, and how nice the specific override on that group can be.

Hotels and car rental companies are in the override marketplace as well, more now than in the past. Calculate what your annualized volume with these vendors is, and much in the same manner that you can develop an override program with an air carrier; you may find yourself eligible for more dollars from your car and hotel vendors as well. There seems to be a great deal of latitude afforded the local sales staff of car rental companies, depending on their geographic location as to what they can do for productive agencies. It would seem to make sense to investigate these avenues. The work required to maximize your car rental commission may be well worth it in the long run.

To sum it up, vendors in today’s marketplace are looking for strong and loyal allies. They are willing to compensate you for this loyalty. But, they are demanding that you produce substantial and consistent revenues for them.

Now is the time to look toward the future, and determine whom you should deal with.

M.I.S.

The survivors in today’s environment have developed a keen sense of awareness of the current needs of corporations to have accurate, and in-depth, management data. If you are not up-to-date with what is going on in today’s automation/information world of the travel industry, it may well be time to seek out avenues whereby you can receive some education in this area. Agencies are being looked at more and more for their ability to act as managers, information and data sources, and travel budget and policy markers.

The change in the way corporations view travel agents is a welcome one. It has done much to bring respect to the business and the professionals within it. The question one must ask though is, “Am I prepared to accept the new challenges posed by the changing role of the travel agent?”

If you have any doubts, it’s not too late to learn and grow in the areas you need to. Your ability to support the management information needs of a corporation is vital to your survival.

Areas of Specialization

Over the past several years agencies have begun to expand their menu of services from simply commercial and leisure travel, to include Incentives, Groups, and Meeting Planning. Be aware that such specialization requires knowledge, dedication, risk, and good planning. These “other” areas of endeavor are quite complex. Doing the job half-way generally results in failure.

Incentive Travel is complicated and often misunderstood as being the same as group travel. When properly administered, sold, and operated it can be an extremely profitable venture. The basic and override commissions paid by travel vendors are unusually good. Meeting Planning is quite time consuming, but again, when done properly can become quite lucrative. One of the challenges with Meeting Planning however, is that the air portion of the program can get quite complex. If you are not properly geared and staffed for it, you will be unpleasantly surprised. Again, there are excellent opportunities for increased profitability here.

Specialization in these or any area of the industry is becoming more and more evident these days, and the reason is you must somehow stand out in the crowd to survive. Find out what it is that you and your staff excel at. It may well be worth the time and effort to clearly define an area of specialization. Developing an identity as a “specialist,” when done properly, can greatly enhance your exposure and positivity affect your overall business.

We are now faced with the challenges that many other industries have faced before – how to survive in a time of increased expense, and decreased revenues? If you want to survive, not is the time to act. Prepare for the future by committing yourself to a workable, flexible, realistic business plan. Align yourself with vendors properly. Review costs, and productivity. Set standards. Develop new avenues of revenue generation. Don’t let what appears to be turmoil around you dissuade you from success.

Make 2011 a year that will make a difference. Make it the year that you decide to be a winner, and a survivor!

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The Car Rental Industry

Market Overview

The car rental industry is a multi-billion dollar sector of the US economy. The US segment of the industry averages about $18.5 billion in revenue a year. Today, there are approximately 1.9 million rental vehicles that service the US segment of the market. In addition, there are many rental agencies besides the industry leaders that subdivide the total revenue, namely Dollar Thrifty, Budget and Vanguard. Unlike other mature service industries, the rental car industry is highly consolidated which naturally puts potential new comers at a cost-disadvantage since they face high input costs with reduced possibility of economies of scale. Moreover, most of the profit is generated by a few firms including Enterprise, Hertz and Avis. For the fiscal year of 2004, Enterprise generated $7.4 billion in total revenue. Hertz came in second position with about $5.2 billion and Avis with $2.97 in revenue.

Level of Integration

The rental car industry faces a completely different environment than it did five years ago. According to Business Travel News, vehicles are being rented until they have accumulated 20,000 to 30,000 miles until they are relegated to the used car industry whereas the turn-around mileage was 12,000 to 15,000 miles five years ago. Because of slow industry growth and narrow profit margin, there is no imminent threat to backward integration within the industry. In fact, among the industry players only Hertz is vertically integrated through Ford.

Scope of Competition

There are many factors that shape the competitive landscape of the car rental industry. Competition comes from two main sources throughout the chain. On the vacation consumer’s end of the spectrum, competition is fierce not only because the market is saturated and well guarded by industry leader Enterprise, but competitors operate at a cost disadvantage along with smaller market shares since Enterprise has established a network of dealers over 90 percent the leisure segment. On the corporate segment, on the other hand, competition is very strong at the airports since that segment is under tight supervision by Hertz. Because the industry underwent a massive economic downfall in recent years, it has upgraded the scale of competition within most of the companies that survived. Competitively speaking, the rental car industry is a war-zone as most rental agencies including Enterprise, Hertz and Avis among the major players engage in a battle of the fittest.

Growth

Over the past five years, most firms have been working towards enhancing their fleet sizes and increasing the level of profitability. Enterprise currently the company with the largest fleet in the US has added 75,000 vehicles to its fleet since 2002 which help increase its number of facilities to 170 at the airports. Hertz, on the other hand, has added 25,000 vehicles and broadened its international presence in 150 counties as opposed to 140 in 2002. In addition, Avis has increased its fleet from 210,000 in 2002 to 220,000 despite recent economic adversities. Over the years following the economic downturn, although most companies throughout the industry were struggling, Enterprise among the industry leaders had been growing steadily. For example, annual sales reached $6.3 in 2001, $6.5 in 2002, $6.9 in 2003 and $7.4 billion in 2004 which translated into a growth rate of 7.2 percent a year for the past four years. Since 2002, the industry has started to regain its footing in the sector as overall sales grew from $17.9 billion to $18.2 billion in 2003. According to industry analysts, the better days of the rental car industry have yet to come. Over the course of the next several years, the industry is expected to experience accelerated growth valued at $20.89 billion each year following 2008 “which equates to a CAGR of 2.7 % [increase] in the 2003-2008 period.”

Distribution

Over the past few years the rental car industry has made a great deal of progress to facilitate it distribution processes. Today, there are approximately 19,000 rental locations yielding about 1.9 million rental cars in the US. Because of the increasingly abundant number of car rental locations in the US, strategic and tactical approaches are taken into account in order to insure proper distribution throughout the industry. Distribution takes place within two interrelated segments. On the corporate market, the cars are distributed to airports and hotel surroundings. On the leisure segment, on the other hand, cars are distributed to agency owned facilities that are conveniently located within most major roads and metropolitan areas.

In the past, managers of rental car companies used to rely on gut-feelings or intuitive guesses to make decisions about how many cars to have in a particular fleet or the utilization level and performance standards of keeping certain cars in one fleet. With that methodology, it was very difficult to maintain a level of balance that would satisfy consumer demand and the desired level of profitability. The distribution process is fairly simple throughout the industry. To begin with, managers must determine the number of cars that must be on inventory on a daily basis. Because a very noticeable problem arises when too many or not enough cars are available, most car rental companies including Hertz, Enterprise and Avis, use a “pool” which is a group of independent rental facilities that share a fleet of vehicles. Basically, with the pools in place, rental locations operate more efficiently since they reduce the risk of low inventory if not eliminate rental car shortages.

Market Segmentation

Most companies throughout the chain make a profit based of the type of cars that are rented. The rental cars are categorized into economy, compact, intermediate, premium and luxury. Among the five categories, the economy sector yields the most profit. For instance, the economy segment by itself is responsible for 37.7 percent of the total market revenue in 2004. In addition, the compact segment accounted for 32.3 percent of overall revenue. The rest of the other categories covers the remaining 30 percent for the US segment.

Historical Levels of Profitability

The overall profitability of the car rental industry has been shrinking in recent years. Over the past five years, the industry has been struggling just like the rest of the travel industry. In fact, between the years 2001 and 2003 the US market has experienced a moderate reduction in the level of profitability. Specifically, revenue fell from $19.4 billion in 2000 to $18.2 billion in 2001. Subsequently, the overall industry revenue eroded further to $17.9 billion in 2002; an amount that is minimally higher than $17.7 billion which is the overall revenue for the year 1999. In 2003, the industry experienced a barely noticeable increase which brought profit to $18.2 billion. As a result of the economic downturn in recent years, some of the smaller players that were highly dependent on the airline industry have done a great deal of strategy realignments as a way of preparing their companies to cope with eventual economic adversities that may surround the industry. For the year 2004, on the other hand, the economic situation of most firms have gradually improved throughout the industry since most rental agencies have returned far greater profits relative to the anterior years. For instance, Enterprise realized revenues of $7.4 billion; Hertz returned revenues of $5.2 billion and Avis with $2.9 billion in revenue for the fiscal year of 2004. According to industry analysts, the rental car industry is expected to experience steady growth of 2.6 percent in revenue over the next several years which translates into an increase in profit.

Competitive Rivalry Among Sellers

There are many factors that drive competition within the car rental industry. Over the past few years, broadening fleet sizes and increasing profitability has been the focus of most companies within the car rental industry. Enterprise, Hertz and Avis among the leaders have been growing both in sales and fleet sizes. In addition, competition intensifies as firms are constantly trying to improve their current conditions and offer more to consumers. Enterprise has nearly doubled its fleet size since 1993 to approximately 600,000 cars today. Because the industry operates on such narrow profit margins, price competition is not a factor; however, most companies are actively involved in creating values and providing a range of amenities from technological gadgets to even free rental to satisfy customers. Hertz, for example, integrates its Never-Lost GPS system within its cars. Enterprise, on the other hand, uses sophisticated yield management software to manage its fleets.

Finally, Avis uses its OnStar and Skynet system to better serve the consumer base and offers free weekend rental if a customer rents a car for five consecutive days Moreover, the consumer base of the rental car industry has relatively low to no switching cost. Conversely, rental agencies face high fixed operating costs including property rental, insurance and maintenance. Consequently, rental agencies are sensitively pricing there rental cars just to recover operating costs and adequately meet their customers demands. Furthermore, because the industry experienced slow growth in recent years due to economic stagnation that resulted in a massive decline in both corporate travel and the leisure sector, most companies including the industry leaders are aggressively trying to reposition their firms by gradually lessening the dependency level on the airline industry and regaining their footing in the leisure competitive arena.

The Potential Entry of new Competitors

Entering the car rental industry puts new comers at a serious disadvantage. Over the past few years following the economic downturn of 2001, most major rental companies have started increasing their market shares in the vacation sector of the industry as a way of insuring stability and lowering the level of dependency between the airline and the car rental industry. While this trend has engendered long term success for the existing firms, it has heightened the competitive landscape for new comers. Because of the severity of competition, existing firms such as Enterprise, Hertz and Avis carefully monitor their competitive radars to anticipate Sharpe retaliatory strikes against new entrants. Another barrier to entry is created because of the saturation level of the industry.

For example, Enterprise has taken the first mover advantage with its 6000 facilities by saturating the leisure segment thereby placing not only high restrictions on the most common distribution channels, but also high resource requirements for new firms. Today, Enterprise has a rental location within 15 miles of 90 percent of the US population. Because of the network of dealers Enterprise has established around the nation, it has become relatively stable, more recession proof and most importantly, less reliant on the airline industry compared to its competitors. Hertz, on the other hand, is utilizing the full spectrum of its 7200 stores to secure its position in the marketplace. Basically, the emergence of most of the industry leaders into the leisure market not only drives rivalry, but also it varies directly with the level of complexity of entering the car rental industry.

The Threat of Substitute

There are many substitutes available for the car rental industry. From a technological standpoint, renting a car to go the distance for a meeting is a less attractive alternative as opposed to video conferencing, virtual teams and collaboration software with which a company can immediately setup a meeting with its employees from anywhere around the world at a cheaper cost. In addition, there are other alternatives including taking a cab which is a satisfactory substitute relative to quality and switching cost, but it may not be as attractively priced as a rental car for the course of a day or more. While public transportation is the most cost efficient of the alternatives, it is more costly in terms of the process and time it takes to reach one’s destination. Finally, because flying offers convenience, speed and performance, it is a very enticing substitute; however, it is an unattractive alternative in terms of price relative to renting a car. On the business segment, car rental agencies have more protection against substitutes since many companies have implemented travel policies that establish the parameters of when renting a car or using a substitute is the best course of action.

According to Tracy Esch, an Advantage director of marketing operations, her company rents cars up to a 200-mile trip before considering an alternative. Basically, the threat of substitute is reasonably low in the car rental industry since the effects the substitute products have do not pose a significant threat of profit erosion throughout the industry.

The Bargaining Power of Suppliers

Supplier power is low in the car rental industry. Because of the availability of substitutes and the level of competition, suppliers do not have a great deal of influence in the terms and conditions of supplying the rental cars. Because the rental cars are usually purchased in bulk, rental car agents have significant influence over the terms of the sale since they possess the ability to play one supplier against another to lower the sales price. Another factor that reduces supplier power is the absence of switching cost. That is, buyers are not affected from purchasing from one supplier over another and most importantly, changing to different supplier’s products is barely noticeable and does not affect consumer’s rental choices.

The Bargaining Power of Buyers

While the leisure sector has little or no power, the business segment possesses a significant amount of influence in the car rental industry. An interesting trend that is currently underway throughout the industry is forcing car rental companies to adapt to the needs of corporate travelers. This trend significantly reduces supplier power or the rental firms’ power and increases corporate buyer power since the business segment is excruciatingly price sensitive, well informed about the industry’s price structure, purchase in larger quantities and they use the internet to force lower prices. Vacation buyers, on the other hand, have less influence over the rental terms. Because vacationers are usually less price sensitive, purchase in lesser amounts or purchase more infrequently, they have weak bargaining power.

Five Forces

Today the car rental industry is facing a completely different environment than it did five years ago. Competitively speaking, the revolution of the five forces around the car rental industry exerts some strong economic pressure that has significantly tarnished the competitive attractiveness of the industry. As a result of the economic downturn in recent years, many companies went under namely Budget and the Vanguard Group because their business infrastructure succumbed to the untenability of the competitive environment. Today, very few firms including Enterprise, Hertz and Avis return a slightly above-average revenue compared to the rest of the industry. Realistically speaking, the car rental sector is not a very attractive industry because of the level of competition, the barriers to entry and the competitive pressure from the substitute firms.

Strategic Group Mapping

As a moderately concentrated sector, there is a clear hierarchy in the car rental industry. From an economic standpoint, disparities exist from a number of dimensions including revenue, fleet size and the market size each firm holds in the market place. For instance, Enterprise dominates the industry with a fleet size of approximately 600,000 vehicles along with its market size and its level of profitability. Hertz comes in second position with its number of market shares and fleet volume. In addition, Avis ranks third on the map. Avis is among one of the companies that is having issues recovering its revenue margins from prior to the economic downturn. For instance, in 2000 Avis returned revenues of approximately $4.23 billion. Over the course of the next several years following 2000, the revenue of Avis has been significantly lower than that of 2000. As a way of reducing uncertainty most companies are gradually lessening the level of dependency on the airline industry and emerging the leisure market. This trend may not be in the best interest of Hertz since its business strategy is intricately linked to the airports.

Key Success Factors

There are many key success factors that drive profitability throughout the car rental industry. Capacity utilization is one of the factors that determines success in the industry. Because rental firms experience loss of revenue when there are either too few or too many cars sitting in their lots, it is of paramount importance to efficiently manage the fleets. This success factor represents a big strength for the industry since it lowers if not completely eliminates the possibly of running short on rental cars. Efficient distribution is another factor that keeps the industry profitable. Despite the positive relationship between fleet sizes and the level of profitability, firms are constantly growing their fleet sizes because of the competitive forces that surround the industry. In addition, convenience is one of the crucial attributes by which consumers select rental firms. That is, car rental consumers are more prone to renting cars from firms that have convenient rental and drop off locations. Another key success factor that is common among competing firms is the integration of technology in their business processes. Through technology, for instance, the car rental companies create ways to meet consumer demand by making renting a car a very agreeable ordeal by adding the convenience of online rental among other alternatives. Furthermore, firms have integrated navigation systems along with roadside assistance to offer customers the piece of mind when renting cars.

Industry Attractiveness

There are many factors that impact the attractiveness of the car rental industry. Because the industry is moderately concentrated, it puts new market entrants at a disadvantage. That is, its low concentration represents a natural barrier to entering the industry as it allows existing firm to anticipate sharp retaliations against new entrants. Because of the risks associated with entering the industry among other factors, it is not a very attractive sector of the marketplace. From a competitive standpoint, the leisure market is 90 percent saturated because of the active efforts of Enterprise to dominate this sector of the market. On the other hand, the airport terminals are heavily guarded by Hertz. Realistically speaking, entry in the industry offers low profitability relative to the costs and risks associated. For most consumers, the main determining factors of choosing one company over another are price and convenience. Because of this reason, rental firms are very circumspect about setting their rates and that generally force even the industry major players in the position of offering more to the consumers for less just to remain competitive. Hertz, for example, offers wireless internet to its customers just to add more convenience to their travel plans. Avis on the other hand, offers free weekend specials if a customer rents a car for five consecutive weekdays. Based on the impact of the five forces, the car rental sector is not a very attractive industry to potential new market entrants.

Conclusion

The rental car industry is in a state of recovery. Although it may seem like the industry is performing well financially, it is nonetheless gradually regaining its footing relative to its actual economic position within the last five years. As a way of insuring profitability, besides seeking market shares and stability, most companies throughout the chain have a common goal that deals with lowering the level of dependency on the airline industry and moving toward the leisure segment. This state of motion has engendered some fierce competition among industry competitors as they attempt to defend their market shares. From a futuristic perspective, the better days of the car rental industry have yet to come. As the level of profitability increases, I believe that most of the industry leaders including Enterprise, Hertz and Avis will be bounded by the economic and competitive barriers of mobility of their strategic groups and new comers will have a better chance of infiltrating and realizing success in the car rental industry.

Sources

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Cheap Rental Cars Just Got Cheaper

Rental cars are available in all cities of the world. The vast majority of companies dealing in this industry are dependent upon travelers that are making a trip to the region either on vacation or an official trip. These are the kind of people that need to hire a car so that they can commute during their trip. Residents on the other hand usually have their own cars or hire cars for certain special occasions.

It is the aim of every traveler to find cheap rental cars irrespective of the destination. Although there are many car rental companies out there reaching out to such individuals by advertising themselves as cheap car rentals. However the best way to find the cheapest offers on car hire is to search for reliable service providers through the Internet following which you should make your reservations in advance.

Cheap Car Rentals Online

Since the majority of travelers make use of the Internet to plan their entire itinerary, car rental companies know that this is the place to reach out to them. You will be able to find online websites for specialist car hire organizations. On the other hand there are websites that allow you to search for reliable service providers using their website. Both these options have their advantages.

How to Find a Reliable Service Provider

It is generally assumed that you would get better rates if you could contact a reliable car hire organization directly. However it is quite possible for the traveler not know which organization to trust. This is especially true in cases where you will be going to a certain place for the first time. In such circumstances websites that act as the middle ground where you will be able to find a comprehensive listing of cheap car rentals serve as the ideal alternative. This is because only the best and most reliable organizations are listed on such websites. This will give you assurance that you will be dealing with a trusted organization and not some shady businessmen that are looking to take you for a ride.

What about the Charges?

The best part about going through this channel is that you will not have to make any extra payments for us utilizing the services of such websites. On the contrary all charges if any are levied upon the car hire organizations themselves. This is another reason why you can trust such websites to have only reliable service providers listed in their database because most shady businesses would not want to spend money to get them self listed.

Another benefit of going through the internet is the fact that you can book your Rental cars in advance. This in itself entitles you to receive better rates as most service providers offer special discounts if you book early. Furthermore it also assures that you will have a car available for you at the time of your arrival because during the peak seasons many of the cheap car rentals have their fleets booked.