Dynamic pricing

Dynamic pricing is a common strategy in the car rental industry, where rates adjust in real-time based on market conditions. It is a standard approach for companies looking to remain competitive and make the most of their fleet. Today’s rental firms rely on advanced software and machine learning to manage these price changes. Behind the scenes, these systems process a wide range of real time data, including fleet availability, travel patterns, local events and holidays, weather forecasts, competitor pricing, and historical booking trends. Algorithm-based models then use this information to set prices that reflect current demand, customer behaviour, and broader market conditions.

When to book?

For consumers, rental prices can vary quite a bit depending on when and where you book, how long you need the vehicle, and what is happening in the local market. Prices often rise during busy periods such as holidays, major events, or peak tourist seasons, especially when vehicles are in short supply. Airport branches usually charge more than city centre locations due to their convenience and higher demand. Booking in advance is one of the best ways to secure a lower rate, while leaving it until the last minute can end up costing significantly more. A one-day rental may even be more expensive per day than a longer booking, depending on demand. Rental companies also monitor competitors closely and frequently adjust their pricing to remain attractive.

Similar principles apply to ride-hailing services. For example, if a large concert has just ended and hundreds of people nearby request rides, fares may increase automatically, sometimes quite significantly. Passengers are often willing to pay more to secure a car, which encourages more drivers to head to the area. On the other hand, if it is early afternoon and demand is low, you might see lower fares or promotional discounts for the same journey. The same applies to airline tickets and hotel rooms, which may cost more during holidays or peak travel times, and less during quieter, off-peak hours.

For customers, dynamic pricing can be a mixed bag. It feels rewarding when you catch a good deal, but frustrating when prices unexpectedly increase. However, for car rental companies, the goal is to keep cars on the road and make the most of the limited number of vehicles available on a given day.