Motoring on

Sam Eltibi, regional director, Dollar Thrifty:

Trends: Most inbound sales are made when customers arrive and many people like to hire a car and driver. They like to shop around at the airport or they go to the hotel. Customers are sharp; they often book with me and three other people and they arrive and shop around. At hotels, if you book and don't turn up there is a no-show fee, but car rental companies have no cancellation charge.

Agents: In this region people still like paper rates and they still like to visit the travel agent. They like to go away with a voucher in their hand, even though we have an online booking facility. However, third party internet aggregators and corporate web sites are offering the customer an attractive alternative, which means business once channelled through agents is now booked online, through Expedia, Travelocity or Thrifty.com for example. We are the last of the food chain where they can make commission.

Industry evolution: Our services are becoming increasingly sophisticated. This is a service region and no matter what fees we ask, people will keep renting. Many people say the Metro will take away business from taxis, but I don't think it will. We are in a growing city and everyone will have his share of the transportation pie.

Regional expansion: The Thrifty business has grown and established itself and we are now trying to grow Dollar Rent A Car to a more sizeable organisation. In the UAE, new Dollar outlets are set to open in the new Four Points Sheraton in Bur Dubai and in the Arenco Tower on Sheikh Zayed Road. Dollar also intends to appoint new franchises in Qatar, Kuwait, Oman, Saudi Arabia, Lebanon and Jordan in before the end of the year.

Hertz UAE

Hertz UAE tends to focus on the top end of the market but remains a universal brand with something for everyone in its fleet of more than 6000 vehicles. The company reported 23% year-on-year revenue growth in 2006 and recently opened its 13th UAE outlet in the Radisson SAS Hotel in Dubai Media City. Regionally the company has 11 Hertz franchises: Bahrain, Egypt, Qatar, Kuwait, Oman, Saudi Arabia, Lebanon, Jordan, Syria, Yemen and the UAE.

Bob Farrow, general manager, Hertz UAE:

Inbound trends: The UAE the car rental industry is very much led by leasing with the ex-pat population renting cars. Short-term holiday leasing is a tiny portion of our business.

Outbound trends: Germany is growing significantly and Switzerland, Austria, the UK, and Australia are popular. We don't get much business to Asia because people don't tend to self drive there; they want chauffeur drive.

Agents: About 60% of all our bookings out of the UAE are direct because we've pushed direct sales. But Hertz UAE has just taken over the responsibility of outbound travel trade sales from its GSA in Bahrain and we will push agent sales now. Around 30% of business is travel trade and 10% internet.

Industry evolution: In the next five years we expect more short-term tourism rental. There will be a reason and a need for people to rent cars. If you are going to go out to Dubailand or Al Bawadi, you are not going to get taxis to do that. This place could get like Florida. It will happen in other countries following the same growth pattern, like Qatar and Oman.

I think the trend will shift from 4WD to saloon vehicles. It's going to be a question of cost and there are already signs of the green lobby beginning to take hold here.

Regional expansion: Hertz plans to open new branches in Dubai Marina, Dubai Festival City, Sheikh Zayed Road and the new Terminal 3 at Dubai International Airport by the end of the year. An additional branch is planned for Dubai Investment Park in 2008.

National Alamo

National Car Rental and Alamo Car Rental are well-defined brands, with Alamo focused on leisure sales National Rent A Car focusing on corporate business. The latter handles Alamo's outbound requests in countries where it not have a presence, although National's strength is within the region. The company reported 480% revenue growth in 2006 over 2005.

Peter Blott, managing director, Vanguard Marketing Services Middle East Ltd. for National Car Rental and Alamo Rent A Car:

Inbound trends: UAE laws dictating that all visitors must carry an international driving licence are impacting all self-drive rentals for visitors at airport point-of-sale, but local domestic business continues to develop. Self-drive restrictions are due in part to an attempt to alleviate general traffic congestion and to improve road safety. Direct self-drive development continues apace in other GCC territories where these restrictions are not imposed though. There is also a growing market for ‘car and driver' transactions. Most self-drive rentals are to regional business travellers who have consistent transient travel patterns in the region.

Outbound trends: Perceived price problems where the final bill is more than the original quote, as well as reticence in driving in foreign environments [might put people off]. With the advance of technology and the willingness of the car rental industry to make rental pricing and processes easy to use, the result is far more ‘car rental pro rata' than five years ago.

Agents: Travel agents still view car rental as a ‘necessary evil' and a secondary service for customers. They need to consider it a significant revenue earning opportunity, particularly when their core business channel of airline ticketing is shrinking and their margins are being accordingly squeezed.

Tips:

• Most agents accept car rental bookings from customers based on the customer asking for a particular vehicle. More attention should be paid to establishing the customer's needs and then making a recommendation. For example, it is no good accepting a booking for a small car when the family has far more luggage than a small car can handle.

• Agents always ask for the cheapest price with no real regard for standard of service that will be provided to their customers. The cheapest price will also give them the lowest commission yield.

• All that is required is training at counter level and companies such as Alamo Rent A Car provide this service to agents across the Middle East, free of charge.

Regional expansion plans: Alamo currently operates out of the UAE and Jordan in the Middle East, but plans to open offices in Bahrain, Egypt, Kuwait, Lebanon, Libya, Oman, Qatar and Saudi Arabia by the end of the year.

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