Ties up with new partners and expands operations in region
Strengthening its position in the region, Budget Rent-a-Car, one of the Middle East's largest car rental operators, has in the past three years achieved growth of between 40 and 50 per cent across the region. The year 2008 has seen Budget opening new headquarters in Bahrain, Qatar and Oman.
Currently, the rent a car company operates in 125 locations in the Middle East in Bahrain, Egypt, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia and the UAE. "We are growing consistently and very rapidly in the region well above the market rate. If you look at the three years individually, in 2005 we grew by 36 per cent, in 2006 by 26 per cent and last year by 17 per cent. These are enormous double digit growth rates which we have been able to achieve," Jill Grinsted, director (sales and marketing), Budget Rent-a-Car, told The Business Weekly.
New partnership
With a view to further consolidate its position in the regional corporate market, Budget has added to new exciting partnerships with companies like Etihad Airways and Gulf Air.
These new airlines add to Budget's existing partnerships with Emirates airline, Oman Air, Saudi Arabian Airlines and Qatar Airways. The rent-a-car company has also strengthened its business by starting new operations in countries like Yemen and Syria. "The Middle East's economic growth and increasing tourism in recent years has had a flow on effect for Budget Rent-a-Car, and our latest results show 2007 was a record year for our Middle Eastern operations. For 2008, our plan is to increase focus on the regional corporate market where we have already experienced considerable success this year, signing partnerships with key airlines including Etihad and Gulf Air," Grinsted said.
"It is important for us to maintain and enhance current and future relationships with our Middle Eastern partners and customers," she said.
Budget is the market leader in Saudi Arabia and one of the top five rent-a-car companies in the UAE. It has set up ambitious plans in the region and in order to achieve the targets, is in the process of signing up a number of new partnership relations with corporate companies in the region.
Budget today is one of the top three global car and van rental systems, and operates in over 3,400 locations, within 128 countries worldwide, including over 800 airports.
Major challenges
Grinsted said that major car rental companies throughout the world are facing the same challenge of increasing costs to maintain their fleet. "Increasing fleet costs is the single biggest challenge.
It makes up for a very large proportion of the cost of the car rental companies. This is not just a challenge the region alone is facing, it is a global phenomenon and will continue to be one for car rental firms," she added.
"Also, the rising prices of petrol are posing a major challenge to rent-a-car companies. Compared to other parts of the world, the Middle East is still very economic in terms of petrol costs but this will continue to affect individuals' appetite for using cars," she said.
At the recent Arabian Travel Market, Budget highlighted its range of products including 1-2-3, Fastbreak, International Partnerships and Go Budget Middle East - a leisure rate programme exclusive to the Middle East.
"Arabian Travel Market therefore provides us with an excellent networking opportunity and chance to further build on our strong operations in the region. It is important for us to maintain and enhance current and future relationships with our Middle Eastern partners and customers" Grinsted explained.
Innovative products
Budget Rent-a-Car rewards agents for booking with Budget instantly and helps them maximize opportunities to cross-sell to clients. 1-2-3 offers travel agents competitive commission rates on all rentals made via its new dedicated agent website.
Grinsted said that Budget's Fastbreak is a priority service for frequent renters that entitles customers to fast-track at the rental desk, which means less queuing and no lengthy paperwork to complete. This service is ideal for the international corporate customer, by taking the hassle out of business travel. "Customers who have rented from Budget at least three times can enrol onto the Fastbreak service by completing an online application form at its website," she added.
Car leasing, according to Grinsted, is one of the biggest source of income for car rental firms in the region and a large number of the organisations opt for car rentals for their needs. "A substantial growth for the company comes from long-term car rental lease for the company and we have drawn up a strategy to boost the number of corporate clients that we have," she added.
Online car renting has become a very big business and a new cost-effective business model for the company. "We are doing a lot more business than before through online services as the Internet offers customers an easy solution and it is simple, clear can be taken up 24 hours a day," she added.
By Vinod Kumar PK
© The Business Weekly 2008
