[Melbourne, Thursday 3 October 2024, 10AM AEST] – Travel Engine, an innovator in vehicle rental technology, is thrilled to announce the successful testing of their cutting-edge optimisation algorithm, designed specifically for vehicle rental businesses.

The new algorithm is the culmination of 18 months of intense research and marks a significant milestone for the industry, offering a revolutionary approach to fleet management and optimisation. By determining the best positioning of fleet vehicles across a network of rental depots, the algorithm aims to maximize fleet returns while minimizing operational costs.

What sets this algorithm apart is its unparalleled speed – many times faster than current algorithms, such as those used in BIAS Optimizerⁱ and DVASSⁱⁱ. This remarkable efficiency in producing optimal solutions, has the potential to transform rental business processes worldwide.

Initial testing, with a primary focus on RV rentals, has yielded exciting results. Modelling indicates that integrating the algorithm into reservations and operations functions has the potential to boost return on investment (ROI) by as much as 40%.

Co-founder of Travel Engine, Phil Degenhardt, expressed his passion for the innovation, stating: “The algorithm is incredibly exciting because it provides a fresh approach to solving a number of difficult problems that have challenged vehicle rental businesses for decades.”

“We knew from many years of experience in the industry, that even the biggest and most successful players were not considering ROI at the individual booking level. However, for capital intensive businesses like vehicle rental, the main game is ROI, not revenue.”

“Maximising ROI requires smart decisions at every step of the revenue generation process. Many vehicle rental businesses have tried yield management techniques pioneered by airlines and hotels, but they often fall short of producing significant improvements.”

“One fundamental challenge is that it is relatively easy to move capacity around the network, compared with hotels or even airlines. In fact, in vehicle rental, customers will often do that for you by returning vehicles to a different location. This means that for successful yield management, you must deal with the reality that the price problem and the logistics problem are interwoven. Our new approach, brings the price problem and the logistics problem closer together.” Degenhardt said.

Travel Engine is due to release an exciting new product, Knapzack Logistics, incorporating this new algorithm. The tool will allow rental businesses to identify optimal decisions around positioning, relocations, downtime and retirements. It will be possible to evaluate policy and marketing settings under different demand scenarios, offering unparalleled insights.

Travel Engine also has Knapzack Inventory in the pipeline, which will bring the new algorithm into inventory control and reservations applications to support dynamic pricing, specials harvesting and other powerful marketing innovations, promising enhanced efficiency and profitability for rental businesses.