Economics of the Travel Industry and High Fuel Prices

Many have not considered fully the costs on our over all economy on high fuel prices? One obvious sector is the travel industry as automobiles, airlines and such are deeply impacted and costs go way up whether you are a family going on vacation or deciding to travel to see relatives via an airliner. But we must also consider the Hotel Industry as well and well what about Rental Car Agencies too?.When the fuel prices went up in 2001 there were a few major Rent-A-Car companies file Chapter 13 bankruptcy.

Amongst them were several large companies including Resorts Rent-A-Car. Both Alamo and National Rent-A-Car whose parent company is ACR Rental are seeing their 90% airport driven business through air travel decrease substantially causing them to cut their fleets by 35% at a time when used car sales are at a peek low. Air travel although picking up again by Mid 2003 to only 15% less than pre 9-11 was not at a high enough traffic count to help them get though the incredible loss in sales.

They were no match for companies who were diversified such as Budget, Avis and Hertz or embedded in local communities like Enterprise Rent-A-Car who immediately stole their market share upon the announcement of the bankruptcy filing. Enterprise Rent-A-Car under the control of Jack Taylor approved the picking up of customers at their homes, offices and repair shops delivering the customers to the Rent-A-Car agency. This was started decades ago by an area manager in Orlando for Enterprise Rent-A-Car worked across the nation and soon catapulted Enterprise Rent-A-Car to number one in their neighborhood markets.Now with high-fuel prices again, who will be the survivors and which rental car corporations will fail to meet the challenge of these higher fuel prices? Consider all this in 2006.

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By: Lance Winslow


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