Jon Michaeli’s Blog

Hertz’s Loyalty Disincentive

Disclaimer: It is likely the commentary below applies to a broader set of rental car agencies, but as I have been tracking the Hertz website over time, my complaint is directed at this one company.

As a Hertz Club Gold member, I book with the company on a regular basis. And each and every time, I am amazed at how they try to take advantage of their best, and presumably most loyal and lucrative, customer segment. If your sole aim is to book as quickly as possible, or price isn’t a primary concern, you can easily pay 50% more than a typical visitor to the website.

For a recent one-day reservation in Las Vegas, I compared three different rates for a daily rental: 1) the standard rate (i.e. no discount code), 2) the “exclusive” Gold rate, which requires log in, and 3) the AAA-promotional rate. For a midsize “Madza 6 or similar” rental, the rates were $45, $65 and $19 respectively. That’s right, the “loyalty” rate was $20 higher per day than the rack rate and $46 higher than the AAA rate (which did not even require validation). Fortunately, you can still book the lower promotional rates while you’re logged into your account; you’ll just need to know (or learn) your way around the site and be willing to spend more of your precious time.

Yes, I am quite familiar with the business rationale behind price discrimination, but these rates were available on the same website at the same exact time, and none of the rates required manual entry of a coupon code. It seems to me like Hertz feels entitled to collect a huge premium in exchange for the convenience of having a car waiting when you arrive at the airport, the one real perk of a Club Gold membership. No wonder why it’s so easy to have the $50 initiation fee waived.

There’s always the chance, however slight, that Hertz has done thorough pricing analysis, and from a pure revenue optimization standpoint, this has proven the optimal result during the testing period. Still, I imagine that many other frequent travelers have had the revelation that Hertz considers gouging its premier customers as sound business practice, which no doubt has led to negative sentiment towards the brand. I’m relatively certain Hertz has no clue what that bad will translates to in terms of lost revenue in the medium to longer term.


One Response to 'Hertz’s Loyalty Disincentive'

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  1. LnddMiles said,

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