Tips to Increase Revenue of a Car Rental Business
The rental car industry has seen significant growth in past years due to travel and tourism across the globe. In 2022, the market reached over $82 billion. By 2029, this number is expected to reach upwards of $137 billion. This forecasted period between 2022 and 2029 presents a compound annual growth rate of 7.5%, which is a strong sign for car rental facilities.
Despite this projected growth, it's important for businesses to learn new ways of attracting customers and expanding into new markets. In this guide, we'll discuss how to increase car rental revenue with a few tips on building a customer base and improving the overall business by protecting the fleet and keeping the vehicles in top condition.
How to Expand the Target Market
The first step to building more revenue in a car rental business is expanding the target market and customer base. To do this, businesses need to understand their fleet and customers. It helps to analyze what demographics could benefit from the vehicles in the fleet and target those personas. For instance, car rental businesses may want to target the following groups of people who are likely to need car rental services:
- Business people
- Short-term renters
- Long-term renters
- Travel enthusiasts
- Newlywed couples
If the primary goal of a car rental business is to attract and retain more customers, they need to expand outside of the usual target market and even the local area. For example, businesses can consider families that may be traveling to the area that need to rent a car for their vacation, not just the people who live in the city or state. Though it can be challenging to reach a new market at first, it can help increase profits.
To make this process easier, car rental businesses can create a marketing plan that maps where they want their business to be and how they're going to get there.
Ways to Increase the Number of Rentals the Business Provides
When trying to produce more revenue, there are endless ways that car rental businesses can attract customers both in the local area and beyond. From improving the vehicles in their fleet to offering promotions to drivers, companies can get creative to target a new market and retain existing customers simultaneously. Here are the top ways car rental companies can attract more customers and increase rentals.
1. Expand the Facility
One of the first things car rental facilities can consider when trying to reach new target markets and increase revenue is the facility itself. Ultimately, the location of the business will determine the number of fleet vehicles a car rental company can have, so it's important to look into some ways to expand and accommodate more rental cars.
While expanding a car rental facility may require new amenities for customers and additional storage space, it will allow companies to fit many more rental cars on-site. If possible, businesses can also purchase an additional location, which can also help attract new customers to the area.
2. Enhance the Existing Fleet of Vehicles
When customers come to a car rental facility, they want to make sure they're getting their money's worth. Providing customers with outdated, damaged, or worn-down vehicles will likely make them look somewhere else for their rental car needs. Car rental businesses should inspect their fleet regularly, keep all vehicles professionally cleaned, and schedule regular maintenance.
Even if a vehicle is not due for a particular service, it's important to practice preventive maintenance to keep the fleet as efficient as possible. Having a reliable and clean vehicle is one of the top things customers expect from car rental companies.
3. Use Ceramic Coatings on Vehicles
To help preserve the look and condition of the fleet, it's just as important to take care of the outside of the vehicles as the inside. By using waxes and ceramic coatings on the rental vehicles, customers will receive rentals that look freshly cleaned every time and have a better driving experience.
In addition to helping with the aesthetic of the vehicles, adding ceramic coatings can also help preserve the value of the cars and keep paint from chipping. Over time, some vehicles will be exposed to a lot of debris on their journeys, such as water and dirt, which can get trapped on the car's surface and lead to damage. Ceramic coatings help keep car rentals looking brand-new and appealing to renters.
4. Hire Additional Staff Members
If it's possible to expand, hiring new staff members can help car rental companies provide exceptional service, reduce long wait times, and keep customer satisfaction ratings high. Having more skilled, trained staff on hand can allow facilities to provide more rentals and improve cash flow to the business.
5. Provide Additional Training to Current Staff
If a company does not yet have the resources to hire new staff, another way to improve revenue is by providing additional training to existing staff members. Training current employees so they know how to confidently complete their duties and keep customers happy can make it easier to attract new markets and maintain a strong reputation in the car rental business.
6. Develop Industry Partnerships
One of the most effective ways to help bring in more business to the car rental facility is to develop connections with other businesses in the area. Convention centers, airports, train stations, and many other public service providers may value a partnership with a car rental facility. Partnering allows various companies to recommend specific car rental businesses to their customers and helps increase cash flow for car renters.
How to Attract More Business
While increasing the number of rentals at a car rental facility is an effective way to attract customers, there are plenty of other ways businesses can improve the overall service they provide. Here are a few tips on how businesses can enhance existing processes to increase revenue.
One effective way car rental companies can attract business is by offering promotions to customers. As with any business, customers are more likely to be loyal and return to the facility if their support is rewarded. There are endless ways car rental facilities can promote their services, such as:
- Discounts for first-time customers
- Holiday season promotions
- Discounts for customers who rent long-term
- Promotional rates for a limited time
- Loyalty reward programs for long-time customers
In addition to these promotions, car rental facilities can also offer other services, such as car washes, detailing, and complimentary road trip items that can help make their drive smoother and more enjoyable. With these options, car rental companies provide an incentive for customers to rent from their business every time they need a vehicle.
When it comes to competing with other car rental businesses, it's critical to stand out by offering lower rates. Coupling the best rates with vehicles in top condition is the perfect mix to help attract more customers to the business.
Be Transparent With Customers
Customer service is one of the most important elements of any business. Car rental facilities can uphold strong customer relationships by being transparent with clients and communicating insurance and liability policies. Though many companies already have rental contracts for renters to sign, businesses can regularly review these contracts to ensure they meet customer expectations and clearly articulate the risks and costs involved.
Companies with extremely strict rental agreements may lose some business compared to those that have more lenient policies. However, very flexible and lenient policies can also lead to more risks and expenses if the vehicle becomes damaged, which is another element to consider. By ensuring the rental contract protects both the business and renters, rental car companies can build trust and confidence with their clients.
To promote transparency with customers, car rental businesses can:
- Explain the insurance provided
- Digitize the inventory to have clear, regularly updated damage lists
- Define legal responsibilities for both parties in the event of an accident
- Have procedures in place in case of damage or any contract infringements
As with any contract or legal agreement, car rental companies should be as clear as possible to ensure the customer is fully aware of their responsibilities.
Maintain a Quality Facility
Businesses that cannot keep their car rental facility clean will likely turn customers away. The experience customers receive when they arrive at the car rental facility will often let them know whether they want to rent a car from that business or if they will go to the competitor across the street. For this reason, it's important for facilities to make a good first impression and ensure customers are happy with their experience before they even get into the rental vehicle.
Car rental businesses can improve overall quality by training employees to be friendly and helpful, providing a comfortable waiting area, offering valet service, and ensuring the facility is clean, well-designed and well-maintained.
Use Social Media to Build an Online Presence
Nowadays, it's critical for all businesses to get on board with modern marketing tactics and trends, including social media. While having a car rental company website is a strong start, using social media allows businesses to reach new, larger target markets and get their name on the map. Millions of people are active on social media every day, making it the ideal place to platform a car rental business and engage with customers on a personal level.
Having a strong web presence extends a car rental business's reach beyond the market in the vicinity. In addition, social media pages, such as Facebook, Twitter, and Instagram, make it easier for customers to access the business and find out more, including:
- Current specials
- Comments and reviews from other renters about their experience
- Questions and concerns
- Areas to provide feedback
- Images of the rental vehicles
- Renter FAQs
This method is quick and affordable, making it one of the most effective tips for car rental companies looking to attract more business and grow their customer base. It can also help companies build brand awareness, so when customers see their logo and company name, they'll be more likely to remember it when the time comes to rent a vehicle.
It's useful to have a social media manager or management team who's responsible for responding to comments and direct messages across accounts. Having an account won't be as beneficial if no one is providing answers to visitors' questions or if no one is posting any content.
By establishing a strong online presence through social media channels or creating custom mobile apps, car rental companies can make it easy for customers all across the nation to find out more about their services through a few simple clicks. This can boost the brand power of the business and lead to an increase in cash flow.
Provide Flexible Options
With so many businesses competing for customers' attention, car rental companies can get on board with modern offerings to help drive revenue.
For starters, it's important to have a wide range of car options for customers. Providing only a few different models can exclude many customers and their travel needs. Some solo travelers may need a smaller car, while families or businesspeople may need larger vehicles, so businesses can make the effort to meet those needs. Car rental facilities can also consider offering a wider range of vehicles that fit various budgets to help appeal to new target markets.
Providing flexible scheduling and payment options can also help attract customers and retain more business. Having more lenient scheduling policies can prompt customers to choose one rental company over their competitor. This flexibility gives clients more freedom to modify their trips according to their needs without having to worry about cancellation fees or strict policies.
Offering better payment options can also be a huge deciding factor for many customers. Rental car companies can start by expanding the types of debit and credit cards they accept, offering financing or payment plans, and implementing contactless pay for a more modern experience. The more options a facility can provide when it comes to payment, the easier it is for customers to get their rental vehicle without all the hassle.
Seek and Implement Feedback
It's beneficial for all businesses to implement customer and employee feedback, and car rental facilities are no exception. Companies can ask for ratings, reviews, and general feedback on their website and social media pages. Customers can also offer feedback simply by letting employees know how their experience was. This information helps companies determine what they're doing right and where they need to improve.
While constructive feedback is critical, it's just as important that real action follows it.
Car rental businesses should assess their contracts, procedures, vehicles, and customer service processes regularly to ensure they're meeting expectations. By actively seeking and implementing feedback, rental facilities show customers how valuable their opinions are, which can help build trust and drive revenue.
Protect Vehicles With Car Parking Structures
To help bring in more business and protect the car rental fleet, companies can install car parking structures. These features can help keep the vehicles in top condition, prevent damage, and enhance the overall look of the car rental facility. Let's dive into the primary benefits of these structures.
Protection Against Hail
There are thousands of hail storms every year, resulting in an average of $8 to $14 billion in damage and losses. Permanent hail solutions that cover car rental parking areas can help car rental facilities:
- Protect inventory from hail damage
- Prevent business interruptions
- Avoid costly expenses associated with repairs
While some car facilities may not receive many hail storms due to their location, even one hail storm is enough to damage the entire fleet. Hail can range from the size of a pea to the size of a grapefruit or larger, which can cause significant damage to the exterior or the vehicle, such as broken glass, chipped paint, and large dents.
In particularly strong storms, hail can deliver the same impact as a sledgehammer. In the event of a hailstorm, rental companies may lose business while evaluating and repairing damage and lose funds in the process.
For car rental facilities located in areas where hailstorms occur even a few times a year, it's beneficial to shield the fleet from damage with parking structures. Structures from VPS are designed with custom steel and fabric configurations to help prevent damage to rental cars and help rental facilities avoid higher insurance premiums due to repairs.
Shielding Vehicles From the Sun
As excessive exposure to heat and UV rays is damaging to humans, it is just as damaging to vehicles. Car rental facility shade structures help protect fleets from the sun's harmful rays. During the summer months, the brightest and hottest days can ruin the exterior paint on vehicles and lead to fading, peeling, and oxidization. UV light can also damage other parts of the vehicle, such as plastic, vinyl, and rubber components.
This damage can cause vehicles to look extremely worn, even if they're in top condition. Parking protection structures help make it easier to block harmful rays, keep vehicles from overheating, and prevent paint damage.
Consider a customer's experience when arriving at the car rental facility. If they're looking to test drive their rental vehicle on a hot summer day, it can be uncomfortable for them to get in a car that's sweltering and takes forever to cool off. Under shade structures, fleet vehicles are out of the direct sun and heat, providing a better experience for customers.
Vehicle parking structures may also help preserve the appearance of the vehicles, lower maintenance costs, and uphold their resale value, which is extremely useful in the rental industry.
Adding Visual Appeal to the Car Rental Facility
When it comes to the looks and aesthetics of a car rental business, parking structures are one of the first things customers will see. When coming to the car rental facility, customers will make note of the shade and parking structures that help prevent weather damage to the vehicles.
These features will let customers know that the car rental business goes the extra mile to ensure the fleet is protected and well-maintained for drivers. Parking structures can also help boost the property value and curb appeal, helping attract more customers and drive more business to the location.
Commercial car parking structures come in a wide range of colors, designs, and styles to meet the needs of the car rental facility and offer a professional, quality look. Vehicle parking and shade structures even allow businesses to do additional upgrades to further enhance facilities, such as installing surveillance for protection, lighting elements for improved vision at night, or solar panels for energy generation.
Help Boost Car Rental Facility Revenue With Parking Protection Structures From VPS
There are many ways car rental companies can attract customers and bring in more revenue to the business. Adding parking facility structures can protect the fleet by helping prevent damage, fading, or chipping. Parking and shade structures can also help preserve the resale value of the vehicles, which in turn helps boost revenue.
For quality products that provide both functionality and visual appeal, choose parking protection structures from VPS. As an industry leader in vehicle protection systems, it's our goal to help commercial car rental facilities get the most value out of their fleet. Contact us today to view our products and solutions.