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Car Rental Sales Deserve More AttentionSeptember 22, 2009 By: George Dooley
Can travel agents sell more car rentals? The short answer is yes. Car rentals represent a sales opportunity for travel agents. Incremental revenues to be sure, but an essential revenue stream for agents.
ASTA, for example, has launched a study in cooperation with several Allied car rental firms to identify how agents can increase the share of the car rental market. Currently, agents share of car rental sales is estimated by ASTA to represent about 25 percent of the total. A total ASTA’s president and chairman Chris Russo believes should be higher.
Russo isn’t alone. Car rental firms, travel agents, agency associations, host agency managers and consortia leaders agree that agents can and should sell more car rentals. The consensus is that it makes solid business sense for agents to make car rentals part of their services.
The overwhelming reason is that travelers – business and leisure – want their agents to be full service – including car rentals. That includes stand-alone car rental sales as well as packaged car rentals as part of a pre or post cruise package or a tour.
Another reason is that car rentals can be profitable. Commissions vary from a low of 5 percent to 10 percent and up to 18 percent. This represents a proven revenue stream that agents need if they are to be profitable. But obviously agents get frustrated when they have to chase the commission payments or lose out with booking changes.
A third reason is that the car rental firms make great partners. The major firms such as Hertz, Enterprise, Alamo, Budget, National, Thrifty, Avis, Auto Europe – to name a few - are eager to work with productive agents and their consortia. They have stand-alone agency programs and web sites that provide information and incentives for agents.
Still another reason is technology that is making car rental bookings easier, faster and cheaper. Including better transaction tracking. One indication of this is a recent study by Amadeus that Amadeus Cars technology saves agents time and money. True, Amadeus may be a little biased about their own system. And the study focused on European agents. But the results are evocative. It raises questions about what new technology agents can use and the role of service fees.
The study showed that Amadeus Cars was the most effective solution of the three options - car rental websites, call centers and Amadeus Car -when travel agents book car rental for their clients. “When comparing the results, Amadeus Cars is, on average, 01:12 minutes (46%) faster than microsites, and 01:47 minutes (59%) faster than call centers. In terms of annual cost savings, this equates to €35,000 ($50,700) - €98,000 ($142,000) for large travel agencies and €7,000 ($10,000) - €19,000 ($27,500) for smaller agencies,” Amadeus concluded.
“With travel agencies needing to find ways to improve productivity, reduce costs, and increase revenue, we can now demonstrate with hard facts and figures that by using Amadeus Cars, we can help agents achieve these goals,” comments Jérôme Vanazzi, director of Amadeus Cars.
Lets be honest. Car rentals are a very, very competitive part of the industry and as Amadeus notes subject to changes in air travel demand. “Online travel agents, airline web sites and even hotel chains’ web sites are part of the mix," as Amadeus notes. “The major players can offer third parties a direct link to their inventory systems, allowing intermediaries to take their car bookings either on a standalone basis or as part of a dynamic opportunity.”
While the Amadeus study is provocative and it will be interesting to see what recommendation ASTA comes up with, there is no doubt that car rental firms want more business from travel agents – including home based independents. The major car rental firms are high integrity performers, with tremendous promotions, great product and the ability to reward agency performers. Including training programs that may be needed.
What to do? Talk with your host or agency consortium and see if they have suggestions on how to improve your car rental sales. And speak with the car rental firms. Also, Amadeus’ White paper is worth a read. Value added services ( and service fees) may be essential to generate additional revenue streams agents and agencies need. And let us know if you have any constructive ideas.
Amadeus White Paper: “Measuring How Travel Agents Can Profit from Car Booking Solutions.” Download at www.amadeus.com/showmethevalue.