U.S. Rent-A-Car market, a club for the select few
Over the last 20 years, the Rent-A-Car market in the United States has been slowly becoming an exclusive club for the select few.
While the top three players in 1998 (Enterprise, Hertz, and Avis) possessed 50% of the 1.64 million cars and made 51% of the US$17.2 billion in revenue that year, the top three (Enterprise, Hertz, and National/Alamo) in 2008 represented 65% of the 1.81 million cars and 66% of the US$21.9 billion brought in 10 years later.
Then, in 2018, the Big Three possessed an imppressive 94% of the country’s 2.21 million cars and brought home 95% of the US$30 billion in Rent-A-Car revenue.
In the pole position last year was Enterprise Holdings, which includes Alamo, National, and Enterprise. It had an average fleet of 1.2 million cars at its 6,400 locations and its revenue rose 4.3% to US$16.9 billion.
Meanwhile, Hertz, which includes Dollar, Thrifty, and Firefly, had 506,200 cars at its 4,200 locations, and its revenue increased 7.3% to US$6.43 billion. Finally, the Avis Budget group which includes Payless had
365,000 cars at its 3,000 locations and its revenue rose 4% to US$5.2 billion.
Source: Bobit Business Media
In the end, what can smaller players and independent companies do to achieve success?
For one, they can create a market niche and know their niche better than any of the majors all while providing a highly specialized level of customer service. They should not compete on price and really understand fleet management.
Moreover, according to Auto Rental News executive editor Chris Brown, independents should use affiliate networks and brokers to augment reservations opportunistically.
Of the 19,191 Rent-A-Car agencies in the United States, 13,600 belong to the Big Three, 591 to non-major brands, and approximately 5,000 are independents.