CarTrawler on loyalty, fintech and growing interest in environmentally friendly travel

The car rental sector has boomed in the past year, driven in part by pandemic-induced trends such as more domestic travel and consumers’ desire for private rather than mass transportation.

According to Phocuswright’s US Car Rental Market Report 2021-2025, gross bookings in the US increased by 37% in 2021 compared to 2020 to $17.7 billion.

At the same time, major car rental companies have struggled to have enough vehicles to meet demand due to production backups and a global shortage of microchips.

In an interview in the PhocusWire Studio at Phocuswright Europe, CarTrawler CEO Cormac Barry said fleet sizes are down between 30 and 50%, driving prices two to three times higher than in 2019 and creating a significant impact on conversions.

“The industry has backed itself into a corner where it has set high prices and now does not want to lower them for fear that customers will cancel and re-book at the lower prices, so I think we will see sustained high prices through the summer, Barry said.

But along with challenges, Barry said he sees accelerated innovation from suppliers — including the scaling of “direct-to-car” options and greater adoption of electric vehicles.

“It’s really about teaching the customer about the use case, getting over range anxiety; with that said many people will try an electric car for the first time through rental. … I think that will be a very big trend now over the next few years,” he said.

Joining Barry for the interview was CarTrawler Chief Operating Officer Peter O’Donovan who explained the work the company is doing to help partners grow their loyalty programs.

“Airlines typically want to increase the number of interactions they have with their customers, add value to their loyalty programs, and they see car rental as a very important use case to expand their offering,” O’Donovan said.

The two executives also discuss CarTrawler’s current priorities, including developments related to revenue management, payments and fintech, where Barry said they see opportunities for products related to price freezes, upgrades and cancellation capabilities.

“We have our data scientists… working on algorithms at the moment, so we’re looking forward to rolling out products in that area in the second half of the year,” he said.

Watch the full interview with PhocusWire’s Mitra Sorrells below.