If you’re in a car rental business in this pandemic, here’s some good news for you. Not even SARS-COV-2 can knock the industry out.
According to ResearchAndMarket.com, the market will only increase in size, achieving a compound annual growth rate (CAGR) of over 3% from 2019 to 2024. Operators can also count on the online market to help boost sales. In 2019, online revenues soared by at least 50%.
But there’s still room for improvement. Reports also show that the growth is still nowhere near what the industry achieved before 2019. Car rental companies also face intense competition with car-sharing apps like Uber and Lyft.
How can a car rental business thrive and attract customers in the middle of a pandemic? Here are x ideas:
1. Focus on Protection
For people dealing with the pandemic, nothing matters other than their health and safety when they’re outdoors. Car rentals can capitalize on that by shifting their marketing message to protection:
- Buy an acrylic shield for a car, which helps promote social distancing in a small space.
- Disinfect every nook and cranny of the vehicles before and after they are being used.
- Invest in regular COVID tests for staff and drivers.
- Provide a disinfection or hygiene kit inside the vehicle. These may include a bottle of alcohol, hand sanitizer, and tissues.
- Promote advanced booking and cashless payments.
Tell your target market what you have been doing to safeguard their well-being. Take videos of your disinfection process, post photos of the acrylic shield, and educate your customers on how to do cashless transactions. Maximize your social media accounts for these promotions.
2. Offer More Rental Options
Usually, car rentals earn a lot of money from transfers and pickups, as well as day trips. The journey is short, the mileage used is small, while the customers pay for limited hours.
The pandemic, though, drove car rental prices down by as much as 40%. How can you improve your revenues? One strategy is to offer more rental options.
- Provide long-term car rentals at a discount. Instead of limiting car rentals by 30 days, encourage clients to book theirs for three to even six months. To sweeten the pot, the longer they lease the vehicle, the bigger the discount they can enjoy. This method provides the business with a more stable or predictable income.
- Let clients self-drive. Self-driving is also one of the best ways to protect the health of the users. It also decreases the company’s liability in case one of the passengers is diagnosed with the infection.
- Focus on corporate rentals. Corporate vehicle lease is one of the fast-growing segments of the industry. According to Mordor Intelligence, its CAGR from 2018 to 2026 could reach over 7%. It’s an excellent market to focus on as well since more people are returning to work but are apprehensive of getting the disease. This market can offset the possible revenue loss the business will incur due to fewer people traveling for leisure.
3. Partner with Shops, Tourist Sites, and Accommodations
Tourism is one of the badly hit industries in the Philippines in this pandemic. In a survey by PricewaterhouseCoopers, almost 90% of the respondents said they expect to have incurred over 50% of revenue losses in 2020.
The good news is both car rentals and these destinations can work together to promote each other’s businesses. They can draft an exclusive day trip for friends and family who belong to the same bubble.
Accommodation options like small hotels may offer vehicle leases to their guests. Car lease companies can also partner with shops, creating a loyalty program for repeat customers.
Because many lost their jobs during the pandemic, others have decided to become small-scale entrepreneurs. The problem is they struggle with logistics.
Although companies like Grab already increased their delivery drivers, business owners need more. This is where car rental companies can come in.
Car lessors can pivot and participate in the logistics programs of big e-commerce hubs like Shopee or Lazada. They may also offer corporate rates for growing small enterprises that need logistics support for bulk deliveries.
Marketing a business in this pandemic is difficult. People may not want to separate from their hard-earned money. Others may be apprehensive about going out, let alone use other people’s vehicles.
But the health crisis also creates an opportunity for companies like car rentals to be more creative with their marketing approaches. In fact, they may identify new niches or explore existing ones they’ve been avoiding for a while.
These four ideas may eventually help car rentals thrive and even grow in the middle of the pandemic.