Hotel and Rental car ReservationsReservations of hotels and rental cars
What is the reason why there are usually free cancellations at car rental companies, but not at the hotel?
That is an interesting issue, and I would say it has to do with capacity utilization (how many rooms are used, or how many automobiles are off). More specifically, what counts is the room/car rental rates and not the room/car rental rates. In addition to this capacity utilization, price structuring is also a complicated area.
Maximising revenues is a challenge all carriers, hotel chain and car rental firms are working on. Car rental prices are particularly complicated, so this can go beyond the usual level. Let's take 3 sectors: Hotel, car rental and aircraft. Aeronautics is the benchmark for maximising capacity utilisation.
Utilization is one of the most important measures of an airline's efficiency. High capacity utilization of the carriers means higher revenue, but above all no losses due to an empty passenger compartment. This is an industrial sector where a passenger is charged, regardless of whether the passenger is crewed or not, especially with regard to petrol, but also because the flight of an aircraft causes firm expenses, such as for example airfields (landing, boarding,...).
In this sector, it is sometimes more important to resell a property at any cost than to keep it empty. As far as cancellations are concerned, the companies would at the last moment loose the offer of free cancellations. Usually the detail of the annulment fee is a question of the right fare, but one gets the idea: a passenger who cancels a ticket must find a new client, so a annulment should be made.
In the second sector, the hotel sector, capacity utilisation is also the key benchmark for this. A vacant room is not as expensive as an empty aircraft cabin, but for a hotel in the town, due to the property charges, a hotel would still be inclined to maximize its use.
Also, the hotel is very dependent on the activities of the town and therefore has high and lowseason. If so, this would account for why the reversal is not always free. Please be aware that usually a hotel offers a free cancelation up to 1, 2 or 7 nights before the booking date or charges less than the room-rate.
If, in the high seasons, a cancellation in a full hotel means that another client may have reserved it, this is a forfeit. There are three major expenses for rental cars: the cost of maintaining the car, the cost of depreciation and park. Car rental firms try to optimise when they are selling their used vehicles, and the annual average life of a used car rental is higher than the remainder of the car deal.
There are then car park charges, and usually car rental companies try to work where properties cost less (such as near airports). All in all, the cost for rental car companies usually depends on the distance driven, i.e. on the use of the vehicle. This means that if the car is not hired, the cost is low.
That' s why landlords are not interested in maximising the utilisation of a car, but in maximising turnover per kilometre or per daily. Your prices are relatively unclear (they often provide unrestricted miles), but what is important to them is that you give them a lot of cash when you are driving their car, not that you keep it for long.
Keep in mind that to reduce the cost of park, some introduce a charge if you give your car back more than 24 hrs in advance. Please check with your car dealer. But as a person-to-person I was amazed when I phoned the rental firm to tell them that I would bring a car back a few later. So, I assume their workload is particularly low, they might not be used to have all their automobiles out (and given the greatness of some airports rental car companies, I'm sure they always have one if you show up unexpectedly).
Ultimately, price determination is a complicated process, so there can be many causes for price cancellations. However, my assumption is that workload is the most important element in this case. Car rentals have low expenses if they are not hired, so the agencys expenses are not high, unlike airline companies or hotel companies.