On the Road Again

SIXT Shares Car Rental Industry Trends

While SIXT rent a car may be a less familiar name for some US travelers, the company is one of the first-ever car rental companies. Founded in Germany in 1912, the global mobility provider which began with a modest fleet of three cars can now be found in approximately 115 markets worldwide. The company expanded its footprint into America in 2011. Today, SIXT locations can be found across the country.

Beyond the company’s impressive longevity and location network, SIXT has often been at the forefront of industry trends. In fact, it was the first car rental company with a website and the first to accept mobile reservations. To learn more about the company and hear what’s next for the broader industry, DTJ spoke to Tom Kennedy, President, SIXT USA & Canada.

DTJ: What major trends do you see shaping business operations within SIXT and the overall car rental industry?

Tom Kennedy: The macroeconomic outlook has brightened despite a challenging economic environment marked by high energy prices and rising inflation and interest rates. Gas prices are coming down and, though cost-conscious, people are ready to get out for new experiences. Summer travel bookings are up more than 40%, and airlines are increasing transatlantic capacity for Summer 2023. The desire to travel continues unabated. We expect demand to continue to approach pre-Covid levels.

With this, having onsite branches at the nation’s largest airports is a cornerstone of SIXT’s continued expansion and growth in North America. Our recent branch opening at DCA [Ronald Reagan National Airport] is a perfect example. Opened April 1, the SIXT DCA branch is a coveted on-airport location and is now one of the largest SIXT air- port branches in the US. As a major hub for government, commercial, and leisure travel, DCA is a valuable location for us and we are confident we will quickly become the car rental provider of choice for the US Government and other business and leisure travelers who value a premium experience and excellent customer service at an affordable price.

We are also thrilled to have opened a new SIXT branch at Joint Base Pearl HarborHickam in Honolulu, Hawaii. For many years, SIXT has had an excellent relationship with the Army Airforce Exchange Service (AAFES) by providing mobility service on military bases in Germany and we are excited to extend this relationship to the United States with this new branch.

While the majority of our business used to be leisure/inbound business, we are facing a tremendous increase in business rentals, including government business— which is one of the most relevant revenue streams for us. SIXT expects high demand in all markets for the traditionally strong third quarter, as the mobility needs of all customer groups are high after the end of the COVID restrictions.

After years of lockdowns, people are looking to book getaways and feeling the need to make the most out of their experiences. At the same time, post-COVID business travel continues to be on the rise. With SIXT now serving 40 of the most important airports in the US including our new DCA branch, we are more than well-positioned to meet that demand, particularly for the federal government.

DTJ: During the pandemic, rental car companies sold off large portions of their fleets. Once recovery began, shortages made replacing those vehicles very difficult. Where does your fleet recovery stand?

Tom Kennedy: Despite tight supply chains and a semiconductor crisis, we were able to increase our fleet last year and we’re proud to say we have the youngest fleet in the industry with an average mileage of 19,000 miles across our fleet.

We are currently observing that the ability of manufacturers to ship products is improving. SIXT is planning another substantial expansion of its fleet for 2023. The premium share of our fleet was 57% in 2022, a constant level compared to 2021 and 7 percentage points higher than in 2019. Today, as in the future, we rely primarily on vehicles from European and American manufacturers. With new partners, we take great care to ensure that our strict standards for risk diversification and quality are being met.

DTJ: How have customer expectations and behaviors changed in recent years and what are steps you are taking to meet these changes?

Tom Kennedy: Customers today expect greater customization. They want a wider range of mobility options to meet their diverse needs. We meet these requirements through our array of products that keep mobility simple and flexible for our customers. Of course, this includes our traditional rental car services. Plus, SIXT Ride which offers one of the world’s largest networks of cab, limousine, and ride services all over the world. Then there’s SIXT+, which is a flexible alternative to buying or leasing a vehicle that allows customers to book a car subscription online, receive their vehicle within a few days, and return it just as easily.

To remain in front of customer expectations, SIXT also has plans to make major investments across our global network. The company is putting more than EUR 100 million into our service excellence, modernization of existing branches, construction of new branches, and the further digitalization and automation of our services. Our goal is always to exceed our customers’ expectations for better, more convenient, sustainable, and exciting mobility.

DTJ: What other trends or future predictions do you have for the car rental industry?

Tom Kennedy: I believe corporate social responsibility [CSR] has and will continue to hold a greater significance. Sustainability is one specific example. Across the mobility spectrum companies are investing in electric vehicles.

Having a people-centric mindset is another major facet of CSR. People are at the center of everything we do in the travel industry. We are a people business, and our customers and SIXT team members are the most important foundation of our success. That’s where the industry is going and we are prepared to lead the way. DTJ