Business Travel News - October 26, 2009 - (Page 18)

CAR & GROUND Most Refuel Rental Cars, But Some Negotiating Cost BY MICHAEL B. BAKER UNDER THE HOOD CAR RENTAL COMPANIES MIGHT PUSH FOR RATE INCREASES Negotiated car rental rates are unlikely to drop into 2010, and few corporate travel buyers will look to change preferred vendors as they enter the new year, according to car rental consultant Neil Abrams, president of Abrams Consulting Group. Unlike in previous economic downturns, corporate car rental rates largely have remained steady this year, due primarily to cost trimming and improved fleet management by the major car rental companies, he said. “Usually, when demand drops, prices come crashing down, but we’re not seeing that,” Abrams said. “There’s much more rationality in fleet planning, some of it brought on by the situation with manufacturers, and they’ve realized that the only beneficiary with irrational pricing is the customer.” With pricing stability, most corporate buyers will have little incentive to explore vendor changes, he said. Abrams said if corporate demand begins to pick up into the next year, car rental companies could begin to push for negotiated rate increases. “They’ve held the line for the last year or two,” he said. “Rental companies will not lose money on an account anymore. They’d rather let the account walk.” duff said Hertz Rent-A-Car last year Most corporate travel buyers have temporarily relaxed its refueling policies requiring travelers to refu- penalties (BTNonline, July 1, 2008). el rental cars prior to their return, Both Kilduff and Abrams said buyand consultants said buyers are ne- ers should have policies in place that gotiating discounts off refueling require refueling. “Rental compacharges in other instances. nies charge what they can,” Abrams About two-thirds of 200 corporate said. “People don’t like it, but it’s fultravel buyers surveyed by BTN said ly disclosed.” their travelers must refuel rental Kilduff said tighter travel budgets cars prior to their return so that high have prompted many buyers who gas prices levied by rental car com- have not enacted policies around repanies can be avoided. Thirty per- fueling to look at doing so. “It’s an cent, however, said they either re- area that was overlooked quite a bit imburse travelers the inflated in the past,” he said. refueling cost charged by vendors Buyers with significant car rental volume also should consider negotiating with vendors to reduce the refueling price, Kilduff said. There are times when refueling is not an option: when stopping Must refuel prior to return for fuel would mean miss67% ing a flight, or when traveling late at night in a dangerReimburses ous area. No policy charges 12.5% 17.5% The three most common negotiated fueling charges Other 3% are a flat rate or dynamic Source: A BTN survey of 200 corporate travel buyers rates based on either the local pump price or the naor have not established a policy tionwide average along with a set around refueling, which car rental surcharge, usually about 75 cents, consultant Neil Abrams, president he said. of Abrams Consulting Group, said “We can actually calculate the could significantly impact budgets. number of gallons a year and nego“You have to hold your travelers tiate a difference,” Kilduff said. accountable,” Abrams said. “If you “You’ll get pushback from car rental do 100,000 rentals a year, and you’re vendors, but they will negotiate it if allowing a third of your travelers to you have the volume.” have their fuel put in by a rental Kilduff said buyers should comcompany, you could be talking about municate the option of prepaying hundreds of thousands of dollars.” for fuel upon rental, particularly Refueling charges vary by rental when they know refueling will be company, but all are significantly difficult. In those cases, Abrams said above prices at the pump. The more buyers should make travelers aware modest, applied by National Car of how much they’ll be traveling and Rental and Enterprise Rent-A-Car, the fuel efficiency of the vehicle. If run about one-third of the cost they have to travel only a few hunabove the current fuel price, Abrams dred miles in a compact car, he said, said. Others charge as much as twice they could end up prepaying for a the current fuel price, he said. CWT full tank of gas and using less than Solutions Group managing director half during their trip. of ground transportation Dave Kil■ mbaker@btnonline.com ■ Most Have Corporate Policy On Refueling Rental Cars DOLLAR THRIFTY TRIMS STORE PORTFOLIO Dollar Thrifty Automotive Group in the past year has closed about 115 corporate-owned locations under the Dollar Rent A Car and Thrifty Car Rental flags in the United States and Canada, the rental car company announced in September. The firm plans to close about 10 more during the rest of 2009 as their leases expire. Dollar Thrifty has more than 700 locations in North America, and those closing are “underperformSCOTT THOMPSON ing and nonprofitable,” said CEO Scott Thompson. “I am glad to report based on current economic conditions that we do not anticipate any significant additional closures in future periods,” Thompson said. BOSTONCOACH ADDS LOW-EMISSIONS MERCEDES LIMO Chauffeured transportation supplier BostonCoach has added the low-emissions Mercedes-Benz R320 to its fleet in Boston, New York, Philadelphia and other cities, the company said this month. The R320's diesel-powered BlueTec engine meets stringent emissions standards, BostonCoach said, and joins an assortment of hybrid vehicles available in some markets. “We strive to achieve safety and comfort with the additional requirement of doing so in a way that does not negatively impact the environment,” said BostonCoach COO Mark Munoz. SIXT EXPANDS INTO MEXICO European car rental and car hire company Sixt AG in recent months opened 15 locations targeting Mexico’s financial and tourist centers as part of a Latin American expansion plan. They include several locations in Mexico City, including the different terminals of Benito Juarez International Airport, and locations in Monterrey and Guadalajara. The new rental facilities also offer local drivers for hire with the cars. —Michael B. Baker & Chris Davis Monday, October 26, 2009 www.BTNonline.com Business Travel News http://www.BTNonline.com

Table of Contents for the Digital Edition of Business Travel News - October 26, 2009

Business Travel News - October 26, 2009
Contents
Inside Track: NBTA forecasts price declines
Washington Wire: UAL, US Airways face safety fines
Profiles In Travel Mgmt.: Nokia changes behavior
Forum: Will Tate: Category management rocks
EuroBTN: One-on-one with Sabre’s Tom Klein
Car & Ground: Buyers adjust refueling policy
Destinations: Beijing Convention Center to open

Business Travel News - October 26, 2009