Los Angeles Hotels Blog

June 8, 2010

Car Rentals in Las Vegas Were not Always Significant

I did not know anything about car rentals in Las Vegas when I was driving through on my way to Los Angeles in 1957. But I did learn something about Roulette. Black can come up, and it did, 8 times in a row. However I was betting on red. That was unfortunate. But I had stopped betting on red after the fourth time. Now that was fortunate.

I did learn about car rentals in Vegas about 1980. I was with Alamo Rent A Car and dealing with a Milwaukee tour operator who was including an Alamo car in their Orlando charter package, The package included air travel, hotel and a car rental. I don’t usually mention names but because these people were the most professional that I dealt with over the years I feel compelled. Those days their name was Funway Holidays which was changed to Funjet Holidays in the 90s. They also had a few charter flights into Las Vegas and that is when I learned about car rentals.

Those days charter operators didn’t rent cars and Funway was a large mover of people as well as smaller operators into Vegas. I have no idea of the percentage of tourists that the operators brought into the area compared to the total number of visitors. But the number had to be significant. I would also suspect that people who visited Vegas on their own did not rent cars en mass since they were bent on gambling. Can I assume that car rentals in Vegas at that time was not a big deal?

The charter operators had to get people to their hotels so usually their charter package price included air travel, hotel stay and bus transfers. Typically advertised prices were per person, double occupancy. The net cost to the charter operator for the round trip transfers was about $16 for the two people.

Here was an opportunity to offer a car rental in lieu of the round trip transfers. The offer to Funway was a net rate of $10 for the first day, day of arrival. This could be offered to their clients as an option. If the client accepted the car rental Funway would immediately see $6 drop to their bottom line. This was the difference between their net rate of $16 for the transfers and the $10 Alamo charged for the first day.

How did this option affect the players? When the client accepted the car rental he found out right away that one, there were no parking charges where ever he went and two, he avoided cab fares if he wanted to visit other hotels for gambling or restaurants. He could also visit Hoover Dam, a likely must especially for first time visitors.

He rented the car on the day of arrival and he could extend the rental for the additional two or three days of his package. Package tours were offered for three or four days. The additional daily charge was a competitive $19, about $5 or $6 less than the local advertised car rental rate. If he wished to return the car after the first day he was faced with a cab ride back to the hotel and then a cab ride back to the airport for his departure. The renters, almost 100%, retained the car for their entire stay.

And how did Funjet fare? As mentioned the car rental option dropped $6 to their bottom line. They also received a commission on the $19 per day rate that the client paid when he extended his rental for two or three days. Certainly not a huge sum per client but it all added up. Especially if there were 30 or 40 car rentals on each charter flight.

How about Alamo? I never heard a complaint. The program was initially offered to Funjet but there were other players. Smaller operators who purchased 10 or 20 airline seats at a discount so they could offer a competitive Vegas tour package. Car rental business in Vegas became significant. Even our competitors got into the act with the first day $10 car rental offer. This business got very competitive to the point where the cost to the operator for the first day was zip, zilch, nada, zero. Even then the business was profitable.

How is the Vegas car rental business today? I don’t have the vaguest idea. I have not handle this type of business for the last 20 years. But I’ll bet if I watch long enough black will come up 8 times in a row at the Roulette table.

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