Car rental suppliers are reporting a sharp drop in bookings in the months ahead, though most are continuing operations amid the Covid-19 outbreak.
Within the US, domestic car rentals have fallen between 50 per cent and 80 per cent month over month from February into March, according to the American Car Rental Association. Earlier this week, Avis Budget Group said that while it had started the year with strong revenue growth, reservations began to fall off in March. In April and beyond, reservations are down 60 per cent and appear likely to decline further.
As such, Avis Budget Group is looking to cut more than US$400 million in costs, including cutting vehicles and staffing levels to match demand, pausing capital spending and possibly cutting compensation for senior employees. The company has also withdrawn its financial outlook for the year.
Still, business continues. Enterprise Holdings, for example, said that "a large network of branch locations" are still running, though some rental locations are closed. Sixt also said most of its locations "are generally open and following their regular business hours" although there are restrictions in highly affected areas such as Spain, Italy and Austria. The companies also report stepped-up cleaning procedures for vehicles and branch locations to prevent the spread of the coronavirus.
While car rental cancellation policies are generally less restrictive than other travel categories, the suppliers are relaxing those as well. Enterprise, for example, has extended its no-fee cancellation policy to include pre-paid rentals booked directly, and Hertz has done the same for affected areas. Hertz lowered its renter age from 20 to 18 to help students who unexpectedly must return home. Avis has waived its fee for drivers between 21 and 24 in age.
Dealing with a suddenly parked fleet has been another challenge for the industry, according to the American Car Rental Association, which some suppliers have turned into an opportunity to help with relief efforts. In an interview with The Wall Street Journal, Hertz CEO Kathryn Marinello said the company is using its idle fleet to offer free rentals to health care workers.