November 05, 2009 - Global distribution system operators are preparing by December to take credit card information for bookings with Avis Budget Group in the event the car rental firm decides to apply a new policy for no-show fees. The rental company has not said when or where it might create the new restriction on the traditionally carefree booking of cars,
The Beat reported.
"We want to be able to turn on [no-show] fees uniformly across all booking channels and all partners," according to an Avis Budget letter sent to the GDS firms in August. "The 'no show' fee will give Avis and Budget the ability to require a credit card or other acceptable forms of payment to make a reservation for a given location and given period of time. So, while for some locations and time periods we may choose to impose a no-show fee, for others we may choose not to. Our new capability will align the car rental industry with similar approaches in use by airlines, hotels and cruise lines. It is a long-overdue change."
According to Avis Budget, for circumstances where a no-show fee is applied, "if the renter's plans change, they can cancel the reservation at least 24 hours in advance without any charge. However, if the renter fails to cancel 24 hours in advance and fails to complete the rental, we will charge a no-show fee to the credit card used to make the reservation."
Travelers are accustomed to committing to travel plans when they book nonrefundable airline tickets and providing credit card numbers to hotels to guarantee reservations. In such cases, they typically are on the hook for the nightly rate or a penalty fee if they don't cancel far enough in advance. But if car renters don't show to pick up their reserved cars, they generally face no consequences.
"I do expect that, at some point in time, our industry will continue moving in the direction of catching up to the rest of the travel industry," said an Avis Budget spokesman. "We don't have a timetable for implementing a credit card requirement, let alone the kinds of things that could go with it, like a no-show fee. In order to be able to even explore the possibilities of doing that more broadly, you have to work out some of the systems issues."
Representatives from Amadeus, Sabre and Travelport said their companies' systems would be ready by December--as requested by Avis Budget--to record payment information.
Why Not?
Ground transportation experts said car rental no-show fees are appropriate. "Why not charge for that?" asked Dave Kilduff, managing director of the CWT Solutions Group ground transportation practice. "Some charges like that occur outside the United States and now are coming to the U.S."
According to its Web site, Avis Europe (a separate company affiliated with Avis Budget Group) this year said that "to improve customer service vehicle availability" it became "the first car rental company to progressively implement standard travel industry procedure with respect to no-show customers in 2009. Customers who do not cancel prior to the allocated rental pick-up time, or do not turn up 24 hours thereafter, will be charged €40 (US$59)."
Citing no-show rates as high as 30 percent, Neil Abrams of car rental specialist Abrams Consulting Group strongly favored policies that require rental customers to commit. "You're planning your fleet around peak periods," he said. "You run the risk of not renting all the cars you should have, or you overbook and leave customers stranded at a cost to the company. It's a tactical issue." He referenced a similar Budget Rent a Car effort several years ago that failed to stick. Some no-show fees are levied on specialty vehicle rentals or monthly rentals, and bookings through car rental companies' Web sites often require a card number.
Abrams said "the tide has turned on this subject. Managements are more focused on turning a profit on fewer cars than they ever bought before. They are buying 25 percent to 50 percent fewer cars than 10 years ago. Demand forecasting is an inexact science. The consumer will fall in line."
If implemented, the Avis Budget policy would be applied for certain reservations made in North America, South America, Australia and New Zealand. The no-show fee "will either be a flat fee or 'the average daily rate,' plus all taxes and surcharges that are applicable. The fee will be indicated at the time of reservation," according to company documentation, which also said that within the United States if a flight is canceled or delayed, the traveler would not be charged an otherwise applicable no-show fee as long as the flight number had been entered into the reservation.
An Enterprise Rent-a-Car spokeswoman said the company (including the National and Alamo brands) had no plans to impose no-show fees. Representatives at Hertz and Dollar Thrifty Automotive Group did not return calls seeking information.
~ David Jonas contributed to this report
