Contracts with rental car companies remain a vital part of managed travel programs.
Contracts with rental car companies remain a vital part of managed travel programs. But this year is the opportune time to mix in some innovative new gambits and run "a buttoned-down proposal process," says Frank Schnur, vice president of global advisories services for North America at American Express. That knocking sound you hear isn’t an automobile engine. It's opportunity. Most companies designate at least one primary rental car company, most of the big ones designate a secondary, observes Schnur, but this is "still the area that is ignored and underworked — companies end up leaving a lot on the table." That’s in spite of the fact that, over the past three or four years, many have been searching for more insight, gathering more data, "looking under every stone — there’s still more opportunity out there."
What's possible? How about a savings that exceeds 10 percent a year?
It’s going to take work and an in-depth RFP process to understand the quality and amenities involved, he acknowledges. “Costing is very complex. There’s a lot of fine print.” But read it all the same. “It’s easy to come to the wrong conclusion. You need to understand their weekly rates, fueling charges, one-way car rentals — and know how your travelers will use them.”
Simply going for the lowest daily rate is no guarantee. That choice can easily be pushed below the “best value” mark by city surcharges and your own travel patterns.
It’s just as important to understand your travelers’ patterns: where they go, how often they go, which days of the week ... the relevant data’s out there with your travel management company, your car rental partners, the corporate card and expense management systems.
Amenities
Cars equipped with navigational systems and transponders for toll collections have great potential for value, says Schnur. GPS-less travelers who get lost on their way to a meeting are losing productivity as well. Transponders are “a great thing” — they reduce the traveler’s environmental impact and maximize his time by preventing his waiting in long lines. Avis Budget Group’s recent announcement that it is equipping all of its cars with eZGo Anywhere wireless transponders even make knowing your traveler patterns a less-than-crucial detail. The transponders are said to integrate with 95 percent of the toll collection systems being used.
But don’t take it for granted that the value exists — for the company or for your travelers.
Look at collected data to see how often they’ve been renting the GPS devices — or simply survey your travelers for their input. Schnur says he’s had great personal success with his own GPS device. But not everyone has. Based on their own experiences, your road warriors may have some strongly-held opinions on the relative value of different mapping services. Ask before you negotiate a service that they could have told you has not been up-to-date about new roads, closed roads and better routes in the areas where they regularly drive.
Environmental decisions can be tricky as well, especially as fuel prices fluctuate. Low-carbon choices are often more economical too but that could change with the availability of the fuel of choice, whether it’s petroleum-based, biofuel or a hybrid.
Nevertheless, reaping savings from environmental programs presented a new possibility this winter when San Francisco International Airport (SFO) launched its “Green Rental Car” program. Customers who rent hybrid cars with an EPA rating of 18 or higher — models like the Honda Civic Hybrid, Nissan Altima Hybrid and the Toyota Prius — receive a $15 discount at the rental counter.
Plus, the airport is offering qualified car rental companies a 20 percent reduction of their airport rental fees if they can push their rentals of EPA-rated cars of 17 or higher to 15 percent of their transactions. That can add Toyota Camry, Honda Accord and Ford Focus to your preferred list. And it can help your rental car company save on its airport rental fees at SFO, which are a large cost of doing business there — as well as any other airport.
Look At What’s Possible
Often, flexibility is the key to a mutually profitable relationship, especially when it comes to where the car is picked up.
It’s well-known that there’s money to be saved if a traveler can get his rental car downtown near his hotel rather than at the airport. And rental companies that need to compete with taxis and car services are likely to be more flexible about dropping a rental off at the hotel, says Schnur: “Enterprise has been delivering cars to renters in the leisure space for a long time, and it’s been successful.”
Take a look at how that might work in your corporate setting and understand the ground travel patterns that are involved. Can a rental car be delivered at corporate headquarters, frequently-visited branch offices, etc.? And will the delivering driver require he be taken back to his own office?
Those same travel patterns might be equally-well served by the Connect by Hertz car sharing “club” just launched in London, New York and Paris. Cars in the programs are parked in specific neighborhoods for use by local residents, who make their reservations online and then receive an e-mailed confirmation giving them their car’s license number and location. They use a smart chip-enabled card, issued on enrollment, to gain access. When they’re through, users return the car to a parking place in the same neighborhood, ready for the next motorist. Hertz plans to expand the programs to more cities, as well as universities, this year; membership will be reciprocal between the various locations.
Check out other company programs not necessarily part of the corporate side to see if you can add legitimate value to what’s available to your company and your travelers.
• At least some Enterprise locations offered lower-than-market fuel prices last fall as holiday travelers took off on Thanksgiving trips.
• Avis offers snow tires on the cars it rents in Quebec. It’s required by law there but would probably be welcomed by drivers in many North American locations this winter. The prices being quoted across Canada are $10 a day; $60 a week.
Consolidating Programs
The idea of developing a comprehensive program that consolidates all ground transportation modes is not unthinkable — “after all, we call ours the ground transportation practice,” notes Schnur. “Certainly companies have increased their use of trains, and we’ve seen some use of bus and Limoliner-like services but not a lot yet.
“We have a handful of clients who are doing some great stuff,” he adds. To be a success, such programs must provide well thought-out guidelines so travelers know what alternatives are available and when they should be chosen.
Of course, if any of the mergers that are being whispered actually come to pass, another kind of consolidation comes into play. But that’s not necessarily a bad thing. Typically it leads to increased competition, says Schnur. “As long as you have a couple of big guys slugging it out, we’ll have a good [chance].”