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While Everyone Watched Airlines, Rental Car Companies Have Been On A Consolidation Binge

Everyone knows there’s been a wave of consolidation in the airline industry, particularly as of late:

  • In 2005, US Air merged with America West
  • In 2008, Delta merged with Northwest
  • In 2010, Southwest bought AirTran
  • In 2012, United merged with Continental
  • And as soon as the dust settles, American will have merged with US Air

What you may not have noticed is how much consolidation there’s been in the rental car business. To illustrate this fact, here are a 10 popular rental car companies you may or may not be familiar with:

  • Hertz
  • Avis
  • Budget
  • National
  • Dollar
  • Enterprise
  • Thrifty
  • Payless
  • Alamo
  • Zipcar

How many different companies do you think there are represented in that list? Given the headline of this post, it should be pretty clear that it’s not 10. So maybe 6? 5?

The correct answer is 3.

The most recent acquisition comes courtesy of Avis, or rather Avis Budget Group (because those two were already connected). They recently acquired Payless in a deal worth $50M.


With that acquisition, Avis Budget Group (the smallest of the three big players) now owns Avis, Budget, Payless, and relatively young upstart Zipcar.

Hertz Global Holdings owns: Hertz (duh), Dollar and Thrifty (after the relatively recent acquisition of Dollar Thrifty Automotive Group).

Enterprise Holdings, one of the largest privately-owned companies in the world, owns the Enterprise brand, as well as National and Alamo.

I knew about some of these mergers and acquisitions, but I had no idea of how widespread consolidation has been in this part of the travel industry. It’s interesting to see the differences in how consolidation has played out for airlines vs. hotels vs. car rental companies. Airlines eventually operate under a single name – usually that of the acquiree or the larger of two merger partners. Hotels maintain distinct brands under the umbrella, but there is a link between those brands as far as the loyalty program is concerned. Car rental companies maintain distinct brands, and they might as well be completely independent companies as far consumers are concerned.

I get that there is value in maintaining a handful of distinct brands within a holding company, but it’d be really nice if there were more cross-brand loyalty perks within the holding company (to the extent there are any in rental cars). In the same way that different hotel chains might work for different types of trips, I could easily envision the same being the case for rental cars. A┬árecent Hilton commercial illustrates that quite nicely actually:

For example, maybe I want Avis for my business trips because of how quickly I can get to the car, but I’d prefer Payless for a vacation to save money. I live in New York, so maybe Zipcar would be best for short, local trips. If I were running a rental car holding company, I’d want to keep all those types of trips “within the family” – and a connected loyalty program seems like a smart way to do that.

What do you think? Loyalty programs aren’t a big part of the rental car experience right now – but could / should they become one in the near future? How much influence would that have on your rental habits and preferences?

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