Rental Cars: No-show fees are in the works

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With hotels and flights, travelers are charged when they fail to show up on the date of a reservation. With car rentals, there's usually no fee for no-shows. But that may soon change.

Auto Rental News reports that the very real possibility of instituting no-show fees dominated a recent car rental convention panel. "We are the only segment of the travel industry that does not have a fee for no shows or a system to guarantee a reservation," said Bob Barton, president of the American Car Rental Association (ACRA) and the panel's lead moderator.

The ACRA says that the no-show rate on car rentals runs as high as 30 percent in some locations, and in the age when most rental lots have much smaller fleets than in the past, it is increasingly difficult for agencies to manage inventories. (Granted, at the same time, agencies have more than doubled the cost of rental rates, which certainly helps their bottom lines.) Car rental insiders swear that no-show fees aren't at all about the money such fees would generate. Instead, per the ARN story:

The panel stressed that the industry is not looking for a revenue grab, similar to airline baggage fees, but a way to better manage utilization.

"I don't care if I ever take a dollar from a customer for a no show," said Craig Parmerlee of Ace, who is working to formulate no-show fee guidelines for Open Travel Alliance. "I just want my customer to show up for the rental so I can plan my fleet better."

The latest speculation is that such fees will become a reality soon—perhaps in 2011, perhaps with Avis Budget taking the first step. At the end of the discussion, the panel moderator requested a show of hands of those who want to see the advent of car rental no-show fees. Nearly everyone there raised their hands.

It's not clear whether all of those people who want to institute a no-show fee would also agree to the flip side of the issue—you know, the one that would actually benefit travelers. We all know that when you make a car rental reservation, there's a chance that by the time you arrive at the rental counter the agency might not have the type of car you reserved. It might not have any car available at all, for that matter. Agencies have always partly blamed this unfortunate scenario on the high no-show rate.

But if travelers face the prospect of no-show fees, the no-show rate will surely drop dramatically, and the agency has no excuse for renting out a car that someone else reserved.

If a car rental agency implements a fee to guarantee travelers will show up for their reservations, the agency should at least guarantee that they are going to honor those reservations. It's only fair.


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