The conservative approach for August proved to be the right approach. Universal maintained profitability as well as 100% rental capacity while entering its seasonal lull. On an interesting note Universal's competitor has not seemed to adjust its pricing for the slow season. This competitor has shown a track record of being a conservative pricing copy cat for the past twelve months. Universal's competitor seems to be much more of a follower than a leader.
This past year has proved to be a successful year for Universal with cumulative profits tipping $143 million.
These profits validate the strategy of maximizing sales as the main focus for the Florida market.
Orlando was a particularly good region for Universal as we were able to focus on profitable rate increases due to the high overall traffic of travelers in the region.
Through out the course of the year I found my self to be personally focused on the Miami region as I continually worked to make sure the Miami fleet was utilized at 100% capacity. I found the break-even calculator to be a very useful tool in maximizing Miami weekend rentals. It was also important for me to understand the difference between the Orlando and Miami markets to structure pricing that would ensure 100% fleet utilization.
Overall this was a good year for Universal!
Friday, November 5, 2010
August 2012
The success of the past ten months have been good for Universal. July's rate increase was a success. Universals fleet has bee utilized at full capacity for six months straight.
Market forecasts and sale history are indicating that Universal is starting to enter its seasonal lull. With the exception of Tampa, car rental demand has plateaued in Florida.
In light of the current market outlook, it would be prudent to approach the slow season with caution. I have decided that it would be wise to throttle back the Miami weekend rental rate by $0.50 and hold the remaining pricing steady with no rate increases for the month.
Market forecasts and sale history are indicating that Universal is starting to enter its seasonal lull. With the exception of Tampa, car rental demand has plateaued in Florida.
In light of the current market outlook, it would be prudent to approach the slow season with caution. I have decided that it would be wise to throttle back the Miami weekend rental rate by $0.50 and hold the remaining pricing steady with no rate increases for the month.
July 2012
As similar to June, July has proved to be yet another successful month for Universal. The rate increase has proved to be successful while maintaining rental capacity at 100%.
July has shown a good increase in demand in the Miami region for weekday and weekend rentals. Fortunately, this demand will allow for a larger rate increase for Miami weekend rentals.
With this new increase in demand I decided to structure another round of rate increases across the board for Florida.
July has shown a good increase in demand in the Miami region for weekday and weekend rentals. Fortunately, this demand will allow for a larger rate increase for Miami weekend rentals.
With this new increase in demand I decided to structure another round of rate increases across the board for Florida.
June 2012
So far the past eight months have proved to be a good time to be in business. The May rate increase allowed continual profits for Universal. Universal has also continued to maintain its Florida rentals at 100% capacity for the last four months.
Universal's competition is still mirroring our rate increases.
As demand has been increasing it would be practical to increase rates for the upcoming month of July.
Universal's competition is still mirroring our rate increases.
As demand has been increasing it would be practical to increase rates for the upcoming month of July.
May 2012
The rate increase for April showed to be successful while still maintaining 100% capacity for fleet rental. Universal's market share has remained steady in all regions. Demand has also increased in all regions as well. Demand increase seems to indicated that there is still untapped value in Universals fleet. I decided to again increase rental rates in all regions to capitalize on current demand. The most aggressive rate increases will take place in Orland where demand is the strongest.
April 2012
Sale strategy is continuing to prove successful as last months rate increase continued to profit Universal.
Demand in Orlando and Tampa has shown to be steadily increasing. Weekend demand in Miami has leveled out slightly.
With general demand still up it seems logical to try to find the threshold of the maximum car rental rate.
I decided to again raise rental rates across the board in all regions, weekday and weekend alike. However this time the rate increase would be more conservative.
In tracking Florida market metrics, we have found that Orlando continues to be split for business and leisure travel. Miami and Tampa show to be areas that travelers frequent more for business.
Demand in Orlando and Tampa has shown to be steadily increasing. Weekend demand in Miami has leveled out slightly.
With general demand still up it seems logical to try to find the threshold of the maximum car rental rate.
I decided to again raise rental rates across the board in all regions, weekday and weekend alike. However this time the rate increase would be more conservative.
In tracking Florida market metrics, we have found that Orlando continues to be split for business and leisure travel. Miami and Tampa show to be areas that travelers frequent more for business.
March 2012
Last months rate increase was very successful. The rate increase allowed Universal to continue to profit while maintaining 100% utilization of fleet capacity in all Florida regions for weekday and weekend rentals.
Universal's competition has continued to mirror pricing adjustments with the exception of the weekend Miami rates. Our competition has held steady on their Miami weekend rate of $33 for several months now.
As we have continued to increase our prices to meet demand we have been targeting our most aggressive price increases in Orlando where demand is the highest.
As demand continues to increase in all regions, I have decided that it would be wise to increase rates again for the upcoming month.
Universal's competition has continued to mirror pricing adjustments with the exception of the weekend Miami rates. Our competition has held steady on their Miami weekend rate of $33 for several months now.
As we have continued to increase our prices to meet demand we have been targeting our most aggressive price increases in Orlando where demand is the highest.
As demand continues to increase in all regions, I have decided that it would be wise to increase rates again for the upcoming month.
February 2012
Holding on weekend pricing for Miami proved to be the right thing to do. Miami weekend rentals are now at 100% capacity.
Market forecasts continue to predict decline in demand even though the number of unfilled car rentals (demand) continually increases.
On a side note, Universal's Miami market share dropped from 55% to 54% for the month. However market share has held steady in the other regions of Florida.
I decided to increase pricing again but this time across the board. I raised pricing according to demand in each region for weekday and weekend rates.
Market forecasts continue to predict decline in demand even though the number of unfilled car rentals (demand) continually increases.
On a side note, Universal's Miami market share dropped from 55% to 54% for the month. However market share has held steady in the other regions of Florida.
I decided to increase pricing again but this time across the board. I raised pricing according to demand in each region for weekday and weekend rates.
January 2012
Again, the pricing strategy is paying off! The biggest success is in Miami where weekend capacity has risen to 95%.
Our competitor has shown to continually mirror our pricing strategy with a safe margin of caution.
With demand still increasing, I decided to increase rates again in Orlando and Tampa. I also increased rates for weekday rentals Miami as well.
I decided to hold the Miami weekend pricing with the anticipation that increased demand would bump the weekend fleet capacity to 100% utilization.
Our competitor has shown to continually mirror our pricing strategy with a safe margin of caution.
With demand still increasing, I decided to increase rates again in Orlando and Tampa. I also increased rates for weekday rentals Miami as well.
I decided to hold the Miami weekend pricing with the anticipation that increased demand would bump the weekend fleet capacity to 100% utilization.
December 2011
The previous months strategy proved to be successful. Weekend utilization improved to 100% for Tampa and 83% for Miami.
Demand has continued to increase on the weekday in Tampa and Miami. Demand has also shown an increase in Orlando. With so many unfilled orders it seemed logical to increase pricing where demand was high.
In order to maximize the weekend fleet capacity in Miami, I utilized m break-even calculator to help me predict the an optimal rental rate.
Demand has continued to increase on the weekday in Tampa and Miami. Demand has also shown an increase in Orlando. With so many unfilled orders it seemed logical to increase pricing where demand was high.
In order to maximize the weekend fleet capacity in Miami, I utilized m break-even calculator to help me predict the an optimal rental rate.
November 2011
As the Florida Chief Sales Strategist for Universal I have been charged with the responsibility of making sure that Universal's sales are as profitable as possible. While there are many potential strategies to grow Universal, my strategy is to maximize sales. Universal already has the majority market share as a car rental agency in the state of Florida, so market share will not be a main focal point in strategy. One of the areas of concern that I noticed upon entering this new position was the current under utilization of Universal's fleet for weekend rentals in the Tampa and Miami regions. Also, Universal's pricing was lower, by a few dollars, than our main competitor.
In order to eliminate fleet surplus, I decided to lower the weekend rates in Tampa and Miami to encourage surplus utilization. To offset the weekend price reduction, I increased pricing for the weekly rates in Tampa and Miami. This was acceptable due to the fact that weekday demand was greater than what Universal has been able to supply.
This tactic proved to be effective as the utilization of fleet capacity increased to 75% from 62% in Miami and 99% from 77% in Tampa.
I decided to drop the weekend rates again for December in both the Tampa and Miami regions to maximize fleet usage. Demand showed to be increasing for the weekdays in Tampa and Miami and generally in Orlando.
In order to eliminate fleet surplus, I decided to lower the weekend rates in Tampa and Miami to encourage surplus utilization. To offset the weekend price reduction, I increased pricing for the weekly rates in Tampa and Miami. This was acceptable due to the fact that weekday demand was greater than what Universal has been able to supply.
This tactic proved to be effective as the utilization of fleet capacity increased to 75% from 62% in Miami and 99% from 77% in Tampa.
I decided to drop the weekend rates again for December in both the Tampa and Miami regions to maximize fleet usage. Demand showed to be increasing for the weekdays in Tampa and Miami and generally in Orlando.
Wednesday, November 3, 2010
Pricing Strategy for Universal Car Rental
My name is Jim Jackson and I have recently been promoted as the Florida Chief Sales Strategist for Universal Car Rental. My main responsibility with this new promotion is to maximize the sales revenue for Universal through careful and continual sales strategy. I have decided to keep a blog to document and report the sales activities with in Universal. I will continue this blog on a monthly basis, starting in October, 2011, and continuing for the course for the next twelve months.
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