Technological disruption is shifting the ground beneath their feet. App-based operators have already put technology at the center of the car-rental industry and increased the competition drastically. Now analytics is in the process of upending the market. Today, data holds the key to higher revenue and lower cost in car rental. Moreover, data can mitigate risks and drive customer satisfaction.
Thanks to the boom in the number of connected vehicles, Internet of Things (IoT), and other digital tools that log transactions, there is no dearth of data related to car rental. This means that companies must rely on analytics not just for business growth but for survival.
In this time of churn, the companies have to choose the right analytics tool to reduce doubt and forecast the future. Knowing the whereabouts and status of their vehicles is no longer enough. Opportunities to make operations efficient, save costs and maximize revenue are far more important for car rentals.
What drives profit
The following factors can affect the bottomline of car-rental companies:
- Economic performance
- Number of car rental days
- Rental rate
- Volume of rental transactions
- Utilization of the rental fleet
The volume of rental transactions is determined by corporate and leisure travel. These can be linked to the volume of air travel.
Depending on the performance of the economy, these volumes and rates might go up or down, but the competitive pricing pressures will remain a permanent feature of the industry.
A slowdown in the economy at home or abroad can affect the revenue flow of a car-rental company. These fluctuations make it imperative for companies to optimize operations and rental rates to cope with pressure from competitors.
In an industry with many variables — managing inventory, tracking fleet, keeping a tab on customers, and so on — optimization of rates and operations depends on optimization of data. This is where analytics can generate tremendous value.
More and more automotive businesses have started using analytics along with cloud computing to derive a range of benefits, from making operations more efficient to identifying the right collaborators. Hertz, for example, has automated data gathering and analysis across the world to improve customer satisfaction and retention. Avis uses data to understand the customer better and come up with customized strategies.
What can analytics do
The right analytics solution must provide car-rental companies meaningful insights in a simple and intuitive manner so that they can boost their pricing and planning capabilities. The solution should help companies deal with dynamic changes easily. Accurate transaction tracking can help car rentals simplify operations and identify problem areas. The end goal is to enhance productivity and customer satisfaction, and maximize revenue.
Our product, CarGain, makes accurate forecasts after analyzing all possible rental transaction data, using the power of next-generation technology like machine learning and Artificial Intelligence (AI). It tracks bookings multiple times a day and comes up with the reasons behind every spike, and provides insights on transactions triggered by events, weather, holidays and airline capacity. The results are presented through an easy-to-use dashboard that helps car rental managers and revenue analysts track every transaction easily.
We have incorporated customer feedback into CarGain to provide more control to the user, and transparency to set up reports, map locations as well as get a better view of daily statistics.
In a market where multiple companies have the same set of cars to offer on rent, how many, at what price and when could be the difference between success and failure. Harnessing machine learning and AI, data analytics can provide price intelligence that is simple, efficient and streamlined. It is the ignition that starts your company’s journey to the future.
About the Author
Associate Vice President – Product Management, RateGain
Leading Product Management Group and driving Engineering/DevOps team with a vision of creating most innovative price intelligence and revenue management products in travel technology.