Another freebie is about to become a memory. Hertz, the world's largest car-rental company, has started charging car rental customers who want to collect frequent-flyer miles and other major companies are about to do the same.
The rental car business is in only slightly better condition that the big airlines, thanks to the slumping economy and the aftermath of 9/11. Hertz' fee, 50 cents a day, is an effort to close the profit gap without raising rates across the board.
No. 2 Avis says it will follow suit, as will co-owned Budget, though the amount of the fee has not yet been decided. ANC Rental, which owns National Car Rental and Alamo Rent a Car, says it may go a step further and pull out of the airline programs altogether, The New York Times reported.
Dollar Thrifty Automotive Group, which operates Dollar and Thrifty, says it doesn't have any plans to impose a fee, at least for now.
Travelers may regard the frequent-flyer miles as free -- but they cost the rental companies about two cents per mile. With the average rental car being driven 50 miles a day, that's $1 per day. Multiple that times millions of rentals per year and it's enough to catch a budget-cruncher's eye.
Hotels may be next to pull out of the programs or they may follow Hertz' lead and tack on another fee.
The frequent-flyer programs were once the golden children of travel marketing. But with travel in a prolonged slump and travelers increasingly turning to low-cost airlines, frequent flyer miles are being seen as a significant drain on profits.