National Retains Undefeated No. 1 Status Amid Deflated Scores

National Car Rental came out on top once again in BTN's 2022 Car Rental Survey, maintaining its undefeated record for all seven years of the survey. Its sister brand Enterprise reclaimed the second-place position, which it has held every year except for 2019, but was behind first place by a mere three-hundredths of a point. The remainder of the five qualifying brands were in the same order as in 2020: Avis, its sister brand Budget, followed by Hertz.

The survey, which gauges the segment's standing with travel buyers, was not conducted in 2021 because of limited business travel usage during the pandemic.

Total average scores, based on buyers' ratings of their car rental suppliers across 12 criteria, plummeted across the board for all brands compared with 2020 scores. Only National and Enterprise had a total average above a four on a five-point scale and scored above a four for all 12 criteria. Further, every brand scored lower for each of the 11 criteria measured in prior surveys.

"National and Enterprise at No. 1 and No. 2—they have the same leadership team and are such a successful company," said founder and president of Abrams Consulting Group Neil Abrams. "With their fleet deals, marketing and used-car presence, it gives them leverage that the other companies don’t have. It doesn't surprise me."

Total average scores, based on buyers' ratings of their car rental suppliers across 12 criteria, plummeted across the board for all brands compared with 2020 scores. Only National and Enterprise had a total average above a four on a five-point scale and scored above a four for all 12 criteria. Further, every brand scored lower for each of the 11 criteria measured in prior surveys.

"National and Enterprise at No. 1 and No. 2—they have the same leadership team and are such a successful company," said founder and president of Abrams Consulting Group Neil Abrams. "With their fleet deals, marketing and used-car presence, it gives them leverage that the other companies don’t have. It doesn't surprise me."

Abrams also was not surprised by Hertz coming in fifth place. "They emerged from bankruptcy one year ago, [and] Hertz had problems well before the pandemic," he said. "But it's miraculous how quickly they were able to return to a modicum of financial stability and operational consistency. But they are still playing catch-up. The pandemic could have been a fatal blow, but it wasn't. Hertz is a blue-chip global brand with tens of millions of customers. I never felt that the company was going to go out of business."

What did surprise Abrams was that the scores were as high as they were given the challenges hitting the car rental industry—car shortages, a lack of demand, a stronger return of demand than anticipated, staff shortages and uncertainty as to the return of business travel.

Criteria Performance

National and Enterprise took the top two spots for 11 of the 12 criteria. Only Avis managed to come in second for one category: upgrades and service for VIP travelers. It also was a close third for mobile app functionality.

The criterium with the highest score was a new category added this year: availability and ease of booking. Other categories with the highest scores were upgrades and service for VIP travelers, relationships with account managers and sales reps, and overall value. Areas where suppliers scored the lowest overall include productivity of rental, communication with buyers about changes, complaint resolution, and quality of data and reporting.

Abrams also was not surprised by Hertz coming in fifth place. "They emerged from bankruptcy one year ago, [and] Hertz had problems well before the pandemic," he said. "But it's miraculous how quickly they were able to return to a modicum of financial stability and operational consistency. But they are still playing catch-up. The pandemic could have been a fatal blow, but it wasn't. Hertz is a blue-chip global brand with tens of millions of customers. I never felt that the company was going to go out of business."

What did surprise Abrams was that the scores were as high as they were given the challenges hitting the car rental industry—car shortages, a lack of demand, a stronger return of demand than anticipated, staff shortages and uncertainty as to the return of business travel.

Criteria Performance

National and Enterprise took the top two spots for 11 of the 12 criteria. Only Avis managed to come in second for one category: upgrades and service for VIP travelers. It also was a close third for mobile app functionality.

The criterium with the highest score was a new category added this year: availability and ease of booking. Other categories with the highest scores were upgrades and service for VIP travelers, relationships with account managers and sales reps, and overall value. Areas where suppliers scored the lowest overall include productivity of rental, communication with buyers about changes, complaint resolution, and quality data and reporting.

"National and Enterprise at No. 1 and No. 2—they have the same leadership team and are such a successful company. With their fleet deals, marketing and used-car presence, it gives them leverage that the other companies don’t have. It doesn't surprise me."

– Abrams Consulting’s Neil Abrams

Don Moore, SVP of business rental sales and global corporate accounts for Enterprise Holdings, credited his sales team for the "thrilling" results. He also noted the company's individualized approach to clients, along with continued communications with corporate buyers during the pandemic.

"We have great salespeople in account management," Moore said. "It's what really gave us the edge every year but especially this year during Covid." He added that employees are usually promoted from within and often brought in from operations, "where they've seen how the customer wants to be treated and understand that from working in a rental branch. That's very good for me."

Moore also noted that during Covid some clients were not traveling, while others were traveling more or differently if they didn't want to fly. "We made sure we kept in contact with corporate travelers and customers as they went through downsizing, as we did as well," he said. "However, one area we did not downsize is the account management team. We needed to be there to talk to customers."

Still, National's lowest score was on communication with buyers about changes, and that category was also one of the lowest rated criteria for Enterprise, even though both outscored the competition. "It could have been a situation where the customer had not rented for a long time, the company had shut down, gone virtual, then when they came back, maybe the systems were a little different because we changed some things," Moore offered, explaining that for a year, the company mostly transacted business outside of branches. "If they weren't renting constantly, that may have affected [that category]. We're proud of our customer communication, but we can improve. It gives us the opportunity to improve."

For Avis Budget Group, the company "strives for the ultimate customer experience," and if it falls short, there's a process in place to review, remedy and recover, said Avis Budget Group SVP of sales Beth Kinerk. "The review phase is important. We want to find out the origin then [provide] a preventative solution so it doesn't happen again. Whether it's information from this survey or [customer] conversations, it's transparent and important. We take that information and improve, whatever the category."

Avis scored best for its VIP service, and Kinerk said the company works closely with corporate travel managers to identify VIP travelers and flag them in the system. Then, there's a process in place to make sure those customers are taken care of. "That's pretty strong in terms of what the logistics are, the offering, what's covered in the features and benefits of that status," she added.

Don Moore, SVP of business rental sales and global corporate accounts for Enterprise Holdings, credited his sales team for the "thrilling" results. He also noted the company's individualized approach to clients, along with continued communications with corporate buyers during the pandemic.

"We have great salespeople in account management," Moore said. "It's what really gave us the edge every year but especially this year during Covid." He added that employees are usually promoted from within and often brought in from operations, "where they've seen how the customer wants to be treated and understand that from working in a rental branch. That's very good for me."

Moore also noted that during Covid some [clients] were not traveling, while others were traveling more or differently if they didn't want to fly. "We made sure we kept in contact with corporate travelers and customers as they went through downsizing, as we did as well," he said. "However, one area we did not downsize is the account management team. We needed to be there to talk to customers."

Still, National's lowest score was on communication with buyers about changes, and that category was also one of the lowest rated criteria for Enterprise, even though both outscored the competition. "It could have been a situation where the customer had not rented for a long time, the company had shut down, gone virtual, then when they came back, maybe the systems were a little different because we changed some things," Moore offered, explaining that for a year, the company mostly transacted business outside of branches. "If they weren't renting constantly, that may have affected [that category]. We're proud of our customer communication, but we can improve. It gives us the opportunity to improve."

For Avis Budget Group, the company "strives for the ultimate customer experience," and if it falls short, there's a process in place to review, remedy and recover, said Avis Budget Group SVP of sales Beth Kinerk. "The review phase is important. We want to find out the origin then [provide] a preventative solution so it doesn't happen again. Whether it's information from this survey or [customer] conversations, it's transparent and important. We take that information and improve, whatever the category."

Avis scored best for its VIP service, and Kinerk said the company works closely with corporate travel managers to identify VIP travelers and flag them in the system. Then, there's a process in place to make sure those customers are taken care of. "That's pretty strong in terms of what the logistics are, the offering, what's covered in the features and benefits of that status," she added.

"The industry [has] emerged smarter and stronger. In general, the industry has learned how to make more money with less cars."

– Abrams Consulting’s Neil Abrams

The mobile app also was a top category for Avis, and Kinerk said that the Split My Bill function remained popular, but the company also is encouraging users to sign up for Avis QuickPass, essentially its touchless functionality that uses QR codes for customers to book, pick up and return vehicles without needing to talk to an Avis employee.

"But we're there if they want to talk to us." Kinerk said, adding that users also can store multiple credit cards and discount codes. "It's in 40 airports right now, and there are plans to expand it by the end of the year."

Moore agreed that customers have wanted more touchless service and the company is developing a "frictionless" process where they too can use QR codes. The company has been rolling it out for National and Enterprise at airports and home city locations with plans to expand to all branches in 2023, he said.

_{Fleet Availability, Pricing}

The new criterium added to the survey this year on availability and ease of booking was the only category where all five major suppliers scored above a four, which was surprising given how much attention there has been on vehicle shortages.

As the market started to recover, there were not nearly enough cars, Abrams said. But as corporate travel returns, the supply chain is "not as bad as it was, and there are more cars entering rental fleets," he added, explaining that manufacturers have been "in a quandary" about how to allocate their fleets—what percentage to dealerships versus [rental] fleets, which are less profitable but higher volume. "More [cars] are filtering in," he said.

Moore acknowledged that manufacturers have been "tight" with vehicles, so the rental fleet is older than it used to be, and rental companies are keeping cars longer in order to have them available for customers. But "it's getting better," he agreed.

Still, at one point, there were more than 2 million domestic cars in rental fleets, Abrams said. "Today, there is maybe 20 percent less than that."

The initial surplus of demand over supply also meant rates skyrocketed, though "they have been suppressed somewhat recently," said Abrams, adding that after each downturn he's seen "the industry emerge smarter and stronger. In general, the industry has learned how to make more money with less cars.

That's been apparent based on earnings results, with Hertz reporting record full-year adjusted corporate earnings before interest, taxes, depreciation and amortization of $2.1 billion in 2021, and Avis Budget's 2021 EBITDA at $2.4 billion, also a new full-year record for the company.

_{Usage Trends}

Compared with 2019 behaviors, corporate customers have been keeping cars "a lot longer," Avis Budget's Kinerk said. "We're also seeing more one-ways. More importantly, top cities have changed. Those typical business markets are looking a little different. Think Chicago O'Hare, San Francisco, Newark, LAX. They're not typical now with corporate customers."

Kinerk thinks one reason for the shifts could be more people working from home and companies having more hybrid and remote employees. Enterprise's Moore said his company also has a large commute business, with vans in big cities taking customers to work every day. In addition, its home city locations are "huge for us," and means renters don't have to go to an airport to pick up their cars.

The interest in sustainability and electric vehicles remains a growing trend. Hertz has been accelerating the addition of EVs to its fleet, and CEO Mark Fields said on a first-quarter earnings call that EVs have "great appeal" to corporate clients.

The most popular report for Avis Budget corporate clients is the environmental sustainability report, the CO2 report, Kinerk said.

Moore said that North America was catching up to Europe when it comes to sustainability.

"We've taken electric vehicles on board, all different sizes," he said, adding that employees in corporate offices are driving electric vehicles now. "But we have to make sure the infrastructure is built, the manufacturer shares the vehicles and the customers want to rent them. You also have to be careful, because you can overwhelm an area of business if you're charging all the vehicles at the same time. We've hired a consultant to help us."