EXPECT the downward
economic trend to continue
for a while still, says Lance
Smith, Avis’s executive
director of sales, who
shared trends in the carrental
market with TNW in a
recent exclusive interview.
These trends served as
an accurate forecast for
future developments in the
economy as a whole, Lance
said.
The car-rental market
has slowed down over the
past 18 months, largely as
a result of the corporate
market, which is down by
double digits.
“Corporates are continuing
to tighten their belts. The
major mining houses in
particular have cut back on
spend,” he said.
Corporates were continuing
to rent cars, Lance said, but
there had been a marked
reduction in the number of
cars they were renting, the
length of their business
stays as well as greater
restrictions on the class of
vehicle being booked.
Interestingly, the domestic
leisure market had bucked
the downward trend and had
seen growth, Lance said,
adding that this was largely
because of the weakening
rand, which had made it
much cheaper and easier to
travel locally.
Also, locals were
encouraged to use rewards
from loyalty programmes
such as Discovery Vitality
and FNB eBucks to travel,
he said. “The numberone
benefit most often
redeemed from these
programmes is travel. As
such, they have driven
significant additional
demand.”
He added that the
launch of several new
low-cost airlines had also
encouraged a general
increase in car-rental spend.
In light of the current
challenge within the
corporate space, Lance said
it was imperative for car-hire
companies to look to other
markets for growth.
“South Africa is a self-drive
country, making it ideal for
car rental. Once tourists
have visited the country two
or three times, they will opt
to make their next trip selfdrive.
“However, we need to
resolve the visa regulations
– those have been a
dampener.”
To take advantage of
new opportunities, Lance
said it was imperative for
rental companies to set
themselves apart through
spectacular service, which
was a critical differentiator.
“Why would someone
choose to come to Avis?
I believe it would be the
expectation of better
service.
