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 The Brancatelli File

joe MILES AREN'T FREE

BY JOE BRANCATELLI

October 2, 1995 -- Salespeople may have to start glancing at the odometer again because the days of renting cars with unlimited free miles could be numbered. Hard-pressed by rising costs, the nation's major car-rental firms may soon be charging you a fee for every mile you drive.

"Travelers don't want to look at the odometer," admits Fred Fleischner, a vice president at Dollar Rent a Car. "It makes them resent the car-rental company, but our costs are skyrocketing and eventually we may have no option" but to limit the number of free miles included with daily and weekly rental rates.

Thanks to pitched competition, car-rental rates have long defied the nation's inflationary spiral. In 1974, for example, Dollar charged $64 a week to rent a subcompact car in Florida. Twenty-one years later, its rate in the Sunshine State is $99 a week, an increase of a just a buck-fifty per year. And Hertz says its price to rent a mid-sized Ford in Orlando is $124.99 a week, about $25 less than it charged in 1990.

Not surprisingly, however, car-rental firms are wilting under the burden of price increases imposed on them by the world's car manufacturers. Hertz says its fleet costs have increased more than 100 percent since 1992. John Power, a vice president at Budget, agrees. He says Budget's costs for new cars--and the interest on the money it borrows to finance them--has jumped 25 percent a year in each of the last four years.

To offset their runaway costs, several car-rental firms began experimenting with mileage "caps" earlier this year. Rather than offering business travelers unlimited miles as part of the rental fee, daily rates included just 100 free miles and weekly rates included only 700 free miles. Additional miles cost about 20 cents each.

But Hertz, the nation's largest rental firm, stunned the car-rental industry in late June by switching gears and returning to unlimited-mileage rates for all rentals. However, not everyone followed the leader back to unlimited miles. At least two firms--Budget and Alamo--adopted a two-tier approach: customers can now choose a rate that includes 100 free miles a day, or pay about $5 more a day for a rate that includes unlimited mileage.

For the moment, most renters will save a few dollars--and buy a little peace of mind--if they stick with unlimited-mileage rates. But beware: the price of unlimited-mileage rates could increase precipitously if all the industry's leading companies adopt a two-tier system. Whenever you're offered a choice of rates for a car rental, make sure you do the math. Annoying as it may be, it might soon be cheaper to pay for your rental by the mile.

THIS MONTH'S ANSWERS…
Q: My company has asked me to cut our airline costs by flying connecting flights through a hub city rather than flying nonstop to my destination. Are they crazy?
A: Unfortunately, it's a matter of finances, not mental stability. Fewer and fewer nonstop routes enjoy competitive service from several airlines. As a result, nonstop airline fares are skyrocketing. Connecting flights--which can be routed through any of the 14 large hub airports in the United States--have much more competition, and thus the fares are dramatically lower. Here's a tip to make connecting life a little easier: on certain fares, carriers such as Northwest, America West and TWA allow travelers to upgrade to first class whenever they fly through one of their hub cities.

Q: I'm considering the purchase of a compact cellular phone, but I wonder whether I can justify the high costs. Any opinions?
A: Cellular phones are increasingly crucial in day-to-day business life, and also can be a valuable tool on even the most mundane business trip. Many frequent travelers use the phones exclusively when on the road. This allows them to bypass the hotel front desk and ensure they never lose a message to an incompetent hotel operator. Cell phones are also useful in emergency situations such as delayed or canceled flights. And cell phones also cost no more per call than some of the charges the alternate-operator service (AOS) companies impose on credit-card calls made from public pay telephones.

Q: I carry a large load of sample cases when I travel and I find the trunks of most rental cars insufficient. Do any of the major agencies rent minivans or pick-up trucks?
A: All the major rental firms offer minivans and sport-utility vehicles on both a daily and weekly basis. They tend to rent quickly--especially near the weekend and around holiday periods--so reserve as early as possible. Several of the larger firms are now renting pick-up trucks as well. Hertz, for example, recently added Ford Ranger pick-ups to its rental fleet in 20 major markets in the South and West.

Q: I don't fly overseas frequently, but the trips are always at the last minute, and the airlines always demand I pay the inflated full-coach fares. Is there any way to cut the price of international flights?
A: Ask your travel agent about "consolidator" tickets. Consolidators are the functional equivalent of factory outlet stores: airlines with excess seats wholesale the inventory to the consolidators at distress prices and the consolidators resell the seats to travel agents and consumers. Travelers buying consolidator tickets can save thousands of dollars, especially on long-haul flights to Pacific Rim destinations. Naturally, however, travelers must make some concessions: consolidator tickets often do not earn frequent-flyer miles, may only be valid on specific airlines, and advance-seat selection is not always available.

Q: Is it my imagination, or have the airlines raised the price they charge for making changes to tickets and flight itineraries?
A: You're not imagining things. Most major carriers now charge at least $50--instead of $35--for discretionary changes to nonrefundable or other restricted airfares. But even $50 is reasonable compared to the cost of the unrestricted fares that allow unlimited itinerary changes and full ticket refunds. If you are intent on changing your plans and don't want to pay the fee, however, consider flying "standby." Most airlines will allow you to board virtually any flight without paying a penalty if you are willing to wait at the gate for an empty seat. Since the average flight on the average day is only about two-thirds full, there's always a good chance of snaring a standby seat.

Q: Is there any way to get a list of hotels that are available in the cities I plan to visit?
A: There are several sources. If you have a favorite hotel chain, call its toll-free reservation number and request the accommodations guide. It will give details about all of the chain's hotels around the country. If you want a guide to hotels in a particular destination, call the city's convention and visitors bureau (CVB). The CVB is sure to have some type of directory. If you need a nationwide guide, consider the new Zagat hotel survey. The 584-page guide rates more than 4,000 hotels in the United States, costs $19.95, and is available by calling 800-333-3421.

This column originally appeared in Selling magazine.

Copyright © 1993-2008 by Joe Brancatelli. All rights reserved.