Let me make one thing clear: I am not a good driver.
Not so bad that I’m a menace on the road and that pedestrians cower in fear when they spot my car. But backed-up traffic or unexpected construction? Music off, hands gripping the wheel – it’s not pretty. On familiar roads with lower speed limits, I’m fine. But among friends I’m the last picked to drive on a road trip. I’m never listed as the driver on a rental car. If I were to drive a rental car in a new city, I would miss enough turns, be too panicked to merge and drive aimlessly looking for parking spots long enough that the only sights we would see in that city would be from the road.
So while I am neither a Nascar driver or an expert on piloting rental cars, I do know a lot about the world of competitive pricing in rental cars. Among all travel verticals, from airline ticket prices to hotel room reservations, the rental car space is the most competitive. It is a hyper regional playing field, with multinational OTAs, rental agencies and local experts all locked in a pricing duel.
The regional element of this duel means that experts in the rental car pricing practices of South America would be completely perplexed by the nuances of the competitive landscape in Europe. Consider the battleground of Brazil, where local agencies like Miles Car Rental are given set prices by agency suppliers, like Sixt, and have little leverage to change the price for their customers unless they want to shave off their precious commission. The result of these immutable rates means that online agencies monitor their competitor prices to make sure they are not offering substantially better deals – which would be an indicator that a supplier is not treating all their customers equally.
Compare that to the pricing dynamics in Europe, where car rental OTAs have significantly more control over pricing, acting less like wholesalers than their Latin counterparts. They typically receive net car rates from their suppliers and then go to market at whatever competitive rate makes sense for their strategy. If they detect cheaper rates from a rival OTA, they don’t ask the supplier for a better rate first, they update their own price to be competitive.The competitive battle in European markets then becomes car rental OTA vs OTA fighting for the cheapest rate that a customer will buy, while also trying to keep as much margin on that rental as possible.
The common theme in both of these regional car rental examples is that each player involved needs competitive data to even participate. In the Brazil example, if an agency like Discover Cars doesn’t check the price that Miles Car Rental is getting from Budget, they won’t know to call up Budget in cases where they aren’t getting equal treatment. In Europe, if RentaCar isn’t aware of the Booking.com price in the Paris market, they won’t know to drop their rates if their prices are getting beaten.
By utilizing a data vendor that not only provides market data but also acts as an expert advisor, car rental companies around the globe can optimize their pricing strategies for success. QL2 is one such premier data vendor. QL2 has 20 years of experience working in this space, capturing essential data points from rental websites, such as price, SIPP, ACRISS and insurance information. Visit our website to get an idea of some of the leading car rental players that trust our data to win their regional battles.
While you would be hard pressed to get me behind the wheel of a rental car (for your own safety), I love talking about the competitive pricing landscape associated with rental cars. Shoot me an email at cschneider@ql2.com to start a conversation!
