Challenges and Solutions in a Dynamic Marketplace
by MarginFuel, on Jun 11, 2019 10:02:00 AM
MarginFuel was asked to be a keynote presenter at the 2019 International Car Rental Show (ICRS), recently held in Las Vegas. It’s the annual event where the car rental industry connects, learns what’s happening today in the vehicle rental industry, and gets actionable intelligence on the latest trends.
Experts from around the world gave presentations on strategies to face rising fleet costs, employee relations, sales and marketing, legal and legislative information, business expansion ideas and more.
As a recognised leader in pricing and demand solutions for the car rental market in Asia Pacific, MarginFuel was asked to represent the Asia-Pacific region in a key note panel presentation. Our CEO, Andrew Pascoe, joined fellow presenters:
- Leo Cai (executive VP at E-Hi, China’s second-largest car rental operator and listed on the Nasdaq
- Richard Lowden (CEO of GreenMotion – global franchise operator)
- Paulo Gaba (CEO EuropCar Brazil)
Andrew’s presentation was aimed at illustrating some of the key challenges and solutions in the Asia-Pacific (APAC) car rental market over the past few years and into the future. He offered insights into the dynamics of the industry in the region, particularly the rapidly accelerating adoption of AI-driven pricing technology.
His presentation was broken down into five key areas which we highlight here:
- A dynamic marketplace
Frequent pricing changes are a key feature of the current APAC marketplace. This will continue to become even more dynamic into the future. To keep up with the dynamic nature of pricing in the region, business owners need to harness and adapt technology in order to optimise price at scale.
The industry is growing rapidly, due to low entry barriers leading to an increase in commoditisation. For example, the New Zealand market is made up of 49% independent operators, which is twice as high as North America. What this means is that business owners need to find ways of differentiating themselves while staying on top of market movements, and matching price to value.
- Many sales channels
An increasing number of sales channels are being utilised by operators in the APAC region. Since 2014, there have been double the number of bookings coming through OTAs when compared to the US and Europe. For operators to thrive in this market, they need to be offering the right channel, the right amount of inventory, at the right price at the right time. Dynamic Channel Price management is coming to the market and will be a key tool in the future.
- Morphing markets - the rise of ride-share
There’s a morphing of the car rental, ride hailing and ride sharing sectors. Customers in APAC are starting to use these services interchangeably and operators need to have the multi-level service platforms and strategic partnerships to take advantage of such new developments.
- Fleet management - one way rentals
Managing one way rentals is also an important trend in the APAC market. Operators are missing out on revenue if cars in their fleet are not in the right location to meet customer demand. Not only that, but they’re spending money they shouldn’t have to by relocating their fleet. The solution is for operators to have effective and accurate demand forecast models that predict where fleet needs to be, and then having the ability to price at a directional level to maximise revenue and minimise relocation costs.
The APAC marketplace is fast-growing and increasingly dynamic. The challenges presented by this growth mean that operators can’t afford to fall behind when it comes to technology and finding new ways to meet customer demand.
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