Reader C.B. asks,
I’ve always wondered why car rental agencies haven’t taken a page from the airline playbook (no cancellations without penalty)[…?]
Car rental companies have tried to move to a prepaid model, and there are some prepaid rates out there now even apart from opaque booking sites like Priceline and Hotwire.
But for the industry as a whole, for this to become the norm, it only works if everyone does it. Everyone can be prepaid and non-refundable, or with cancellation fees. Or for the most part no one will, unless they’re offering substantially greater value or lower prices than other players in the industry.
It’s an interesting question why airlines were able to move to that model for the most part while car rentals haven’t been able to make that transition.
Hotels meanwhile have done something different entirely… full forfeiture most of the time on prepaid non-cancellable rates but most rates remain cancellable. Rental cars do the same thing, there ar some prepaid rates which offer savings, but they haven’t been as widely adopted as prepaid hotel rates have been — perhaps because a percent off of a car is usually a smaller amount than off of a hotel stay, so not enough to induce consumers to trade off convenience for savings.
Still, even hotels haven’t managed to follow the airline model where the vast majority of the time tickets are non-refundable with a stiff and ever-increasing cancellation fee. They have, however, managed to uniformly push cancellation deadlines out to a day prior to check-in rather than a day-of deadline which was standard until recently on most non-prepaid rates.
I am not sure I can explain these nuanced differences actually. Why do you think rental cars haven’t gone more prepaid and non-cancellable, while other forms of travel have made greater strides in that direction?
Clearly they would benefit from reduced breakage, or at least revenue from breakage.