Hotwire and Carrentals.com Driving Rental Car Success

Car Key

Image from: Car Keys Image / Shutterstock

One of the cheapest ways to travel remains renting a car and driving to your destination – be it a friend’s house, grandma’s or a cheap hotel you found online. Compete investigated the dynamic rental car industry to see who was winning and losing.

Market Revving Up

The market is healthy; so far in 2012, more people shopped and booked rental cars than last year.  Roughly 7.1 million people shopped for a rental car in January 2012 with about 1.4 million booking, which means roughly 1 in 5 shoppers book (or 20%).  The chart below shows that overall rental car demand was up 16% y/y with bookers up 15% y/y (Jan ’12 vs. Jan ’11).

Number of unique rental car shoppers and bookers

Leading the Race

Enterprise leads the set, attracting nearly 1 in 4 rental car shoppers (24.4%).  Enterprise’s business model is different than other rental car companies, in that their primary focus is on rentals in local markets to people who need a replacement vehicle rather than travelers on the go…. According to Enterprise’s website, “there is an Enterprise branch within 15 miles of 90% of the U.S. population.”

Hertz and Budget capture the #2 and #3 positions at just over 10% of total rental car traffic each.  As a side note, Budget demand is 26% higher y/y (Jan ’12 vs. Jan ’11) coincident with a new ad campaign introduced this summer featuring Wendie Malick and cars from $17/day.

However share of traffic isn’t the entire story; knowing which brands these consumers ultimately book with is equally, if not more, important.  Enterprise dominates the set, capturing 18.9% of all rental car bookings, followed by Hertz (also #2 in share of traffic.); but it’s Hotwire, not Budget, that’s #3. Carrentals.com also sneaks into a top 5 spot driving Avis and Dollar further down the list.

Top 10 share of rental car shoppers and booker events occuring with each brand

Driving Success with Lost Bookings

Hotwire and Carentals.com both capture a significant share of ‘lost bookings’ from other brands.  Lost bookings are counted when a shoppers searches on one site, but books on another.

The chart below shows that in January among people who searched for a car on Expedia and booked anywhere during the month, 15% of those bookings occurred with Hotwire.  Both Hotwire and Carrentals.com are owned by Expedia, so sharing of shoppers or bookers is a win-win for Expedia Inc, but the three brands together capture 23.6% of total rental car bookings. This is significant because, based on traffic, other brands are paying to acquire these shoppers while Hotwire and Carrentals.com are reaping the benefits of the bookings.

Lost bookings to hotwire by brand

Next Steps:

Understanding where you rank in traffic and bookings is key to identifying where you stand against the competition. However, knowing which brand your lost bookings are going to and, in turn, which brands you are capturing lost bookings from will allow you to create and leverage more successful conquesting opportunities.

All rental car providers should:

  • Understand where these bookers start in the process.  Are they shopping for rental cars only or are they adding cars on to pre-existing reservations like hotel or air? If so, what sites did they start on and where did your site fall in the process?

Hotwire and Carrentals.com competitors should:

  • Investigate traffic acquisition strategies for both brands. Both sites are successfully driving traffic, even more so than some suppliers.
  • Learn from their success and study their points of differentiation.  Is it price, site design, marketing? Any of these are potential drivers for stronger booking funnels and results on either site.
About JackieODowd:
Jackie is a marketing consultant for Compete with over 10 years client service and consulting experience in automotive, travel and youth marketing. Jackie holds a Master’s from Northwestern University in Integrated Marketing Communications and has been part of the Compete team for longer than she can remember. When she isn’t writing for Compete, Jackie spends her time running around after her kids, sampling organic wines and pondering life’s questions like…’can I throw this away without anyone noticing?’ You can connect with Jackie on LinkedIn or Twitter.