Auto Rental News has completed its yearly chore of collecting the data and adding up the numbers. When 2011 is in the books, the U.S. car rental industry will have collected $22.4 billion in revenues. That’s an all-time record, and it comes on the heels of the public car rental companies recording record profits in the third quarter.
Of course, the bottom-line will always be a moving target. But for now, achieving $22.4 billion in sales just two years out from the Great Recession is a remarkable feat.
Certainly, the majors are leading the charge in pushing revenues to record territory. But the midsized independents on our chart are holding their own: Out of seven listed, revenues are down slightly on one, flat on two and up on four.
You might think the auto rental industry is just riding the wave of an economic recovery. Well, that’s not the case next door in the airline industry. Just look at American Airline’s bankruptcy filing this week.
Further, the International Air Transport Association had downgraded the overall profit for the industry for 2011, which will amount to a 78% drop in net profit from the $18 billion recorded in 2010. Airlines are getting killed on costs, particularly fuel. Aren’t you glad you’re not worrying about the price of Brent Crude on a daily basis? So much for building on a recovery!
That’s not to say that the auto rental industry isn’t dealing with its fair share of turmoil. While the disaster in Japan drove record used car prices, those same supply disruptions caused over-fleeting that kept rates lower than anticipated in the prime earning season. New car prices aren’t going down, and manufacturers are celebrating their curtailment of sales to rental fleets. Any company tied up with Europe has to be a bit anxious.
Digging deeper, this record revenue was achieved on 1.76 million average cars in service in 2011, which surpasses last year’s average by 7.5%. And yet, total U.S. rental fleet sales will actually come in at 1.32 million units this year, falling from 1.41 million last year. It’s easy to extrapolate that America’s rental cars are doing longer lengths of service, and car rental companies are achieving higher utilization.
The last time the industry had a similar fleet size was in 2006. That year, total revenues equaled $20.41 billion, which translated to $962 per car, per month. Looking back, it’s hard to think the U.S. auto rental industry could’ve squeezed more juice from the orange — yet today, per-unit revenue is $1,060, another record.
Now here’s the kicker: customer satisfaction, as measured by J.D. Power’s annual study, is actually on the rise. Overall satisfaction in 2011 averages 758 on a 1,000-point scale, driven by increases in satisfaction across all six factors compared to last year. The last time the overall score was higher was in 2006.
The unending quest for any company in any industry is to hunt for new revenue opportunities while streamlining operations and cutting costs. The U.S. car rental industry has achieved this while raising the bar of customer service.
That’s reason to celebrate. Let’s take that for now, and get back to work. There is still room for improvement.
Click here to see the overall U.S. car rental market statistics for 2011.