Car-Rental Firms Punish No-Shows

Your flight is canceled and the next one isn’t until tomorrow. Better call the hotel and cancel the room -- and don’t forget the rental-car counter. Some 20% to 30% of people who reserve a car with a rental agency never pick up the keys. But travelers who are accustomed to getting a free pass when they fail to claim their rental may soon be hit with a fee. “These no-show fees are not a matter of if but when,” says rental-car industry consultant Neil Abrams. Such charges already exist in other countries, and in some cases you’ll pay a no-show fee in the U.S. for a hybrid or other specialty car, for a long-term rental, or for renting at peak times.

With demand down and operating costs rising as Detroit funnels fewer cars into rental fleets, rental companies are looking for income. Over the past year, Avis has begun retooling technology to allow the company to process credit-card numbers at the time of reservation, giving the company the ability to, among other things, penalize no-shows. There’s no rollout timetable yet, but an Avis spokesperson says the process will be moving ahead in the next few months -- and not just at Avis, but likely industrywide. In the U.K., Avis gives no-shows a 24-hour grace period to cancel the reservation or pick up the car; after that the company charges a fee of 40 euros (about $57).

For Patty Hsu, a consultant from Cerritos, Cal., who rents cars for business travel, a fee for a missed reservation could be an expensive speed bump but not a surprising one. “It sounds like the same concept as hotel-cancellation policies,” says Hsu.