College of Hospitality and Tourism Management

TPC1 – Transportation Management

First Semester | AY 2020-2021

Module in Transportation Management

A. Module No – Title : TPC1 M6 –Land Transportation Industry: Car Rental industry

B. Time Frame : 1 week – 3 hrs

1. Overview
This module discusses Car Rental Industry, its operations and services. It
explains the history and different types of vehicle used in the industry. It discusses
the requirements needed to avail their services. It also includes topics on the
relationship of car rental industry to tourism.

2. Desired Learning Outcomes

1. Explain the concept of car rental by explaining the operations and services
offered.
2. Discuss the history and development of car rental industry in international
setting.
3. Identify the different types of vehicles used by car rental companies according to
their sizes.
4. Discuss the process and requirements in availing the services of a car rental
company by interviewing service providers.
5. Project professionalism and ethical behavior.

6. Content/Discussion

Topic Outline: Car Rental Industry

Definition
History
Types of Operations
Rental Process
Classes of Service
Car Rental and Tourism
Car Rental in the Philippines

Car Rental Industry

Car Rental is used primarily for intra city travel and for shuttling between a
transportation terminal and hotel. It is a relatively expensive form of transportation.

A car rental, hire car, or car hire agency is a company that rents automobiles for

short periods of time, generally ranging from a few hours to a few weeks. It is often
organized with numerous local branches (which allow a user to return a vehicle to a
different location), and primarily located near airports or busy city areas and often
complemented by a website allowing online reservations.

Faculty: ALIA AMOR D. UY Page 1 of 7

 College of Hospitality and Tourism Management
TPC1 – Transportation Management
First Semester | AY 2020-2021

Car rental agencies primarily serve people who require a temporary vehicle, for
example, those who do not own their own car, travelers who are out of town, or
owners of damaged or destroyed vehicles who are awaiting repair
or insurance compensation. Car rental agencies may also serve the self-moving
industry needs, by renting vans or trucks, and in certain markets, other types of
vehicles such as motorcycles or scooters may also be offered.
Alongside the basic rental of a vehicle, car rental agencies typically also offer extra
products such as insurance, global positioning system (GPS) navigation systems,
entertainment systems, mobile phones, and portable WiFi and child safety seats.

History of Railway System

Car rental began back in 1916 when the Saunders brothers in Ohama, Nebraska
borrowed a car when their own car broke down.

Joe Saunders of  started with only one borrowed Model T Ford  but by 1917, his
Ford Livery Company was renting out 18 Model Ts at 10 cents per mile. The
company name became Saunders Drive-It-Yourself System and then Saunders System.
By 1926, Saunders had expanded to 56 cities. Saunders' company was bought
by Avis in 1955.

The Saunders family around the Moline

Dreadnaught, the car that is given credit
for launching the rent-a-car business.
Pictured are, left to right, Harris
Saunders, Warwick Saunders and Joe
Saunders.
An early competitor to Saunders
was Walter L. Jacobs, whose

Faculty: ALIA AMOR D. UY Page 2 of 7

 College of Hospitality and Tourism Management
TPC1 – Transportation Management
First Semester | AY 2020-2021

Chicago-based Rent-a-Car opened in 1918 with twelve Ford Model Ts. The company

was bought in 1923 by John Hertz.

In Britain, car rental started with Godfrey Davis, established in 1920, and bought
by Europcar in 1981.
The sector expanded rapidly in the US; in 1926, the American Driveurself
Association assembled over 1200 delegates in Chicago.
The growth in travel after World War II led to the establishment of several well-
known international companies, including National Car
Rental (1947), Europcar (1949), Enterprise Rent-A-Car (1957), Thrifty Rent A
Car (1958), and Budget Rent a Car (1958).
Today the largest car rental company in the world is the Enterprise Holdings Inc.

2 Main Types of Operation of Car Rental Companies

1. Corporate - most of the larger firms like, hertz, avis and national have mostly
corporate operations.
 Purchase the cars and rent them to consumers.
 After cars have been used for a long time, this are sold at used-car prices to
used car dealers or directly to consumers
2. Licensee - are usually part of chain operation
 Often lease the car to larger companies rather than purchase and resell
them.
 “Buyback” programs - the use car revert to the original car manufacturer
instead of being resold.

The Rental Process

The following are the standard requirements in renting a car. Some companies may
have additional requirements or process:

1. Valid driving license- most country requires international travel /driving license
especially for tourist
2. Be of certain age- every country has an age requirement for securing license.
Like US-25 yrs old, PH- 16 years old
3. Have a major credit card-if traveler do not have credit cards, they must be cash
qualified. Cash deposit is needed.
4. Be personally responsible client must have verification of address and
employment.
Basic Classes of Rental Cars
The following are the types of vehicles according to their sizes:
1. SUB COMPACT- small cars
Examples: Nissan Sentra, Ford Escort, Dodge Shadow

Faculty: ALIA AMOR D. UY Page 3 of 7

 College of Hospitality and Tourism Management
TPC1 – Transportation Management
First Semester | AY 2020-2021

2. Compact - average sized car

Examples: Chevrolet, Cavalier, Ford Tempo,
Toyota Corolla

3. Standard - a full-size car

Examples: Ford Thunderbird, Chrysler
Le Baron, Subaru Legacy

4. De Luxe - a large luxury car that is usually equipped with extra

Examples: Lincoln town car, Cadillac sedan de Ville, Buick century

Car Rental and Tourism Industry

Faculty: ALIA AMOR D. UY Page 4 of 7

 College of Hospitality and Tourism Management
TPC1 – Transportation Management
First Semester | AY 2020-2021

The Tourism Vehicle Rental Market is Segmented by Vehicle Type (Economy and
Luxury/Premium), Booking Mode (Online and Offline), End User (Self Driven and
Rental Agencies), and by Geography.

Over the decades, tourism has been rapidly growing, while experiencing
deepening diversification and becoming one of the fastest growing economic
sectors in the world. Modern tourism is closely linked to development and
encompasses growing number of new destinations. These dynamics have turned
tourism into a key driver for socio-economic progress. As tourism is a huge
market, the demand for vehicle rentals is growing around the world.

Tourism Car rental companies are developing strategic partnerships with

corporates, airlines, insurance companies and universities to reduce the
percentage of single occupancy vehicles while touring.

Increased concern and awareness of lower emissions have primarily led to an

increase in car rental options. Additionally, vehicle rental also provides the option
of increased mobility, without the concern of paying the costs associated with car
ownership. These services are offered via websites and through other online
platforms, which has helped the growth of the tourism vehicle rental market.

Car Rental in the Philippines

 Rental cars may be hired for a specific of time-minimum of 5hrs- 24hrs

 Rates vary according to the type of car, length of the rental and if the customer
will the drive his/her own car or will be needing a driver
 Gas is not usually included in the rate

7. Progress Check
Self-Assessment Question/ Activity
1. Explain the Car Rental Industry.
2. Discuss the history of car rental industry.
3. What are the different types of vehicles use by car rental companies?
4. What is the relationship of car rental and tourism industry?

8. Evaluation

Faculty: ALIA AMOR D. UY Page 5 of 7

 College of Hospitality and Tourism Management
TPC1 – Transportation Management
First Semester | AY 2020-2021

Individual Activity

Look for a car rental company in Pampanga and ask their requirements and process
in renting a car. Ask for their rate using the following specifications:
Destination: Baguio City
Date: December 4-6, 2020

Provide other details that the company is asking. Use the following word format:

Name: Car Rental Activity

Section:

Company 1
Address
Requirements:
1. Afkjkhfjgakf
2. Jkjkasfjkakf
3. Jkhfjkhafbdagweuhro
Process:
1. Jdskfahfrjwe
2. Iurtiaetiofghasdjn
3. Kfdvgbfbjh
Rate:
Destination: Baguio City
Date: December 4 – 6, 2020

Company 2
Address

Requirements:
4. Afkjkhfjgakf
5. Jkjkasfjkakf
6. Jkhfjkhafbdagweuhro
Process:
4. Jdskfahfrjwe
5. Iurtiaetiofghasdjn
6. Kfdvgbfbjh
Rate:
Destination: Baguio City
Date: December 4 – 6, 2020

Company 3
Address

Faculty: ALIA AMOR D. UY Page 6 of 7

 College of Hospitality and Tourism Management
TPC1 – Transportation Management
First Semester | AY 2020-2021

Requirements:
7. Afkjkhfjgakf
8. Jkjkasfjkakf
9. Jkhfjkhafbdagweuhro
Process:
7. Jdskfahfrjwe
8. Iurtiaetiofghasdjn
9. Kfdvgbfbjh
Rate:
Destination: Baguio City
Date: December 4 – 6, 2020

Send a word output on or before (date to be announced) __________ to

aliaamor.uy@ua.edu.ph.

C. References

Dileep, M. (2019). Tourism, Transport and Travel Management. New York, NY:
Routledge.

Salamanca, M. & Roces, C. (2016). Travel Services. Philippines: JFS Publishing Services.

Santos, B. & Manzano, R. (2014). Principle of Tourism 1. Philippines: MaxCor Publising

House Inc.

Santos, B. & Manzano, R. (2014). Principle of Tourism II. Philippines: MaxCor Publising
House Inc.

Zenaida L. Cruz. (2013). Principles of Tourism Part II. Philippines: Rex Bookstore Inc.

Tourism vehicle rental market. (2020). Retrieved

https://www.mordorintelligence.com/industry-reports/tourism-vehicle-rental-market

Faculty: ALIA AMOR D. UY Page 7 of 7