The rental car companies are in a big hurry to start
charging you for no shows. The no show rate on rental cars is now approaching 25 percent. We have heard of travelers that make several car reservations with several different car companies and then rent from the company that has the first shuttle bus to appear.
While this practice saves time it makes the car companies crazy. Our guess is a no show fee will appear sometime this year and it looks like the opening no show charge will be between $5 and $15.
We need to cancel rental car reservations when we don't need them. It's been a chronic problem in the car industry for years now, with average no-show rates of 9 percent to 14 percent, depending on the channel. But it's a larger issue recently for car rental companies, which are squeezed between higher car acqusition costs and customer demand for more fuel-efficient cars.
The result is that more customers are forced to wait for smaller cars, or face 'upgrades' to SUVs or larger vehicles, or don't get the cars they want. The basic problem is this: Nothing bad happens when you don't cancel your car. With hotels and airlines, no-show travelers stand a good chance of losing some money, either through fare restrictions or guaranteed-room programs. With car rentals, when you no-show, nothing happens. The only apparent loser is the car rental company. In a lower no-show environment, car rental chains can predict real demand better and match car pick-ups to arrivals more effectively. In any case, the issue is becoming painful enough that I predict we'll see some steps on the part of some companies to reward and penalize travelers who do and don't cancel.
Sabre's internal studies indicate that capacity cuts alone are not likely to provide enough for airlines to break even, and the result is likely to be increased fares, which typically results in reduced volumes of bookings. We believe international routes will be largely unaffected due to their greater profitability. Capacity cuts will have significant impact on hotel bookings--and in fact, we are compiling updated info for July that shows that corporations are already starting significant cutbacks, even ahead of the capacity cuts becoming effective (i.e., July decrease in bookings would not be result of airline capacity cuts, since those will mostly become effective starting in September; therefore, decrease in hotel nights booked is the result of corporations scaling back).
