Measuring the performance impact is a permanent goal for the company’s bottom line when car rental yield management software techniques are implemented.

Like Nessie of Loch Ness in the Scottish Highlands, some said that they saw it, but nobody can prove it. Fortunately, it is easier to show the great benefit of the Yield Management implementation on your bottom line than to take a picture of the world-famous monster.

On this first example, I have decided to focus on market segmentation. In a commodity market like the Car Rental industry and especially in a leisure destination, it is not a secret to say that most of the volume is generated by the brokers. But this channel is pretty expensive when we combine the commission paid on the retail price paid by the customer to the various fees to be add-up: reservation fee, central billing, airport tax, etc. For our example, we are taking the following assumptions (all based on a total booking estimate excluding vat and airport tax) :

So now, let’s imagine that the market segmentation for a whole of 100,000 rental days is split as follow before the implementation of a proper Yield Management:

In the above example, the following decision has already been taken:
Push Direct business first
Then, make sure the right amount on the local website is just a bit cheaper than on the .com site managed by the Franchisor
Last but not least, the rate parity is applied through all other channels (Network and Brokers on retail)
There is no direct contract with any Broker yet
So now, based on these results, it is clear that a new distribution channel tactic needs to be decided to push more Direct sales, ideally Local and then via the Network. So after having organized the data to make sure we get the correct picture of the current situation and that we will be able to track the results of the action,