Car Rental

What the learners should know:

Tourism Car rental:
Sectors • Introduction to the car rental industry in South Africa (use major car
rental companies in South Africa)
• Conditions for renting a vehicle (age, driver’s licence, creditworthy,
signing of contract)
• Different rental packages/options
• Insurances: CDW, TLW v/s SCDW, STLW and PAI
• Additional costs and charges: tourism levy, fuel deposits and
charges, airport surcharges, additional driver charges, contract fee,
delivery and collection charges, cross-border fees, optional
equipment
• Incidental costs: administration fee for accidents, traffic fines

Assessed in the Exam: Section D and Section A Introduction to

the car rental industry in South Africa

Renting a car provides a flexible means of transport to tourists, because

tourists can drive themselves to where they need to be, instead of having to
rely on public transport.

Tourists must make sure that the rental car is big enough for their
luggage.

Major car rental companies in South Africa

• Major car rental companies in South Africa are Avis, Budget, Europcar,
Hertz, Tempest and Thrifty.
• The bigger car rental companies have offices at all the major airports in
South Africa as well as additional offices in the main cities and towns in
South Africa and the smaller companies operate in a particular region
or province only.
• The Southern African Vehicle Rental and Leasing Association
(SAVRALA) is the industry association for the car rental industry
Conditions for renting a vehicle

• There are some conditions for renting a car, the most

important of these conditions is that the renter must have
a valid driver’s licence.
• Most car rental companies require that the renter be
above a certain age between 21 and 23 depending on
the company.
• The renter must have a credit card with enough funds
available to cover the costs of the rental as well as any
insurance amounts that the insurance on the car does
not cover, this also indicates that the person is
creditworthy.
• All car rental companies require renters to sign a rental
contract or rental agreement which outlines the
conditions of the rental.

Rental packages and options

• Car rental companies give better rates for longer rentals.

• Offer special rates over weekends to encourage leisure tourists to
rent a car
• Car rental companies offer cars from small to minibuses for rental,
the more features the car has, the higher the rental rates.
• The rental rate includes a certain travel distance per day.
• For every kilometre that the renter travels in addition to this
allowance, there is a fee per kilometre.
• When the renter returns the car to the car rental company, a
company official checks the number of kilometres that the car has
travelled during the rental period.

Insurances

• There are different types of insurance that renter can take out
when they rent a car, to help reduce the impact of different risks.
• CDW (collision damage waiver) cover for accident or collision, it
reduces the renter’s liability if the vehicle suffers damage in an
accident.
• TLW (theft loss waiver) covers the theft of the vehicle, if someone
steals the car, the renter must pay a set amount only.
• In both CDW and TLW the amount that the insurance does not
cover is the excess.
• To pay less excess, the renter can choose a higher car rental rate
that includes super collision damage waiver.
• SCDW (super collision damage waiver)
• STLW (super theft loss waiver)
 • PAI (personal accident insurance) compensate the renter in case
of injury in an accident and to cover the cost of medical treatment
of these injuries

Types of insurances Advantages Disadvantages

CDW Cover the cost when Renter pays excess

involved in an accident

SCDW Renter does not pay any It cost more/ it is

cost expensive

TLW Pays for most of the value The driver pays excess
of the car

STLW Covers the entire cost It is expensive

PAI Covers death and It does not guarantee

disability resulting from an medical and hospital
accident in a renter car expenses

Additional costs and charges:

As with any contract, there are additional costs, some of which are
included in the rental fees and some of which are not included.
Costs that are included in the rental fees:
Tourism levy – 1% levy, additional driver charges, contract fee, delivery
and collection charges, cross-border fees, optional equipment such as
GPS and child seats.
Costs that are charged at the end:
Fuel deposits and charges, airport surcharges

Incidental costs:
Administration fee for accidents and traffic fines.
 Activity 1

Activity 2

1.1 If the renter of the vehicle collects the Eco Sport at 09:00 on
21 March, at what time should the vehicle be returned on
24 March to avoid incurring additional costs? (1)
1.2 Explain the following car rental terms:
 (a) CDW (2)
(b) Airport surcharge (2)
(c) PAI (2)
(d) Rental contract fee (2)

Activity2

Study the diagram below and answer the questions that follow :

2.1 .1 Give the time that the vehicle should be dropped off at Cape Town

International Airport if the renter does not want to incur additional

costs. (1)

2.1.2 Explain the meaning of the following:

(a) Airport surcharge (2)

 (b) Collision damage waiver (2)

2.1.3 Calculate the total amount of the rental should the renter travel

500 km during the rental period.

NOTE: Show ALL steps of your calculation. (2)

2.2 Consider tourist bus transport and tourist rail transport available
between cities in South Africa and write a short paragraph in which you
compare these types of transport with regard to:

 Cost and
 Frequency (2 x 2) (4)
ENTREPRENEURIAL OPPORTUNITIES IN THE TOURISM INDUSTRY

Key concepts

What learners should know

● Definition of an entrepreneur ● An entrepreneur is someone who

takes the risk to open a new business
venture with the hope to make a profit.

● Characteristics of an entrepreneur ● Creativity

● Resourceful
● Hard-working
● Risk-taker
● Self-confident
● Good judgement
● Flexible
● Honesty and integrity
● Ability to identify a niche market

● Skills required to become an ● Communication skills

entrepreneur ● Human relation skills
● Problem solving skills
● Basic business skills
● Leadership skills

● Identifying products or services ● Based on new or old ideas

suitable for entrepreneurial ● Big or small businesses
opportunities ● Entrepreneurial businesses must
meet and exceed tourist expectations
Skills required to become an entrepreneur

[Link] skills : The ability to

read, write and speak in a professional
manner

2. Human Relation skills (people

skills) : The ability to build and maintain
healthy working relationships

3. Problem solving skills: The ability to

tackle and overcome challenges

4 Basic Business Skills: The ability to

identify opportunities and turn ideas
into profits

5. Leadership skills: The ability to give

direction and mentor others
• Identifying products or services suitable for entrepreneurial opportunities
✔ Entrepreneurial opportunities can be based on new or old ideas
✔ Entrepreneurial opportunities can be big or small businesses
✔ All businesses must meet the needs and expectations of the tourists
✔ Starting your own tourism business means you are your own boss and you choose the type
of work you want to do.
✔ Tourism businesses can be very profitable and contribute a lot of money to the economy.
✔ Entrepreneurs need identify tourism businesses that are a demand, that will be able to
compete in the market and that can be easily financed.

Possible entrepreneurship opportunities in the tourism industry

Accommodation Transportation travel agency

(air BnBs)
Uber owner

Guided tours

Souvenir Restaurants and Bars

shops

1ACTIVITY
1. List TWO entrepreneurial skills required to be a successful

tourism entrepreneur. (2 x 1)

2. Suggest TWO personality qualities (characteristics) that an

employee in the hospitality industry requires. (2 x 1)

3. Mention ONE challenge that a tourism entrepreneur could be

faced with, other than those mentioned in the extract.

Marking guideline
Activity 1

1.1 The vehicle should be returned at 09:00 on 24 March. (1)

1.2 Collision Damage Waiver is an insurance to cover the renter if the vehicle is involved in an
accident while the renter is driving. (2)

(b) Airport surcharge is a charge that applies to every rented vehicle collected from an
airport depot. (2)

(c) Personal Accident Insurance is an insurance option that covers the renter of the vehicle
in their personal capacity during the period of the rental for death benefit, medical
expenses and support required in the event of an accident. (2)

(d) An amount added to the rental fee of the vehicle. The amount covers the administration
costs of the rental. (2)

Activity 2

2.1.1 Identity document  Driver’s license (Any ONE) (1)

2.1.2  Budget airlines provide flights at a lower cost.

 Passengers have fewer comforts.

 A lower level of service is provided on a budget airline.

 Refreshments are usually not included in the ticket price and have to be purchased on
board budget airlines.

 Newspapers are usually not included in the ticket price and have to be purchased on board
budget airlines.

 Tickets are not usually assigned specific seats on budget airlines.

 Only one class of service, economy class, is available on budget airlines. (Any 2 x 2) (4)

2.1.3 (a) 07:25 or earlier. (1)

(b) He must check in at least one hour prior to departure in order to complete the check in
procedures. (2)

2.1.4 Narrow body aircraft Motivation: In South Africa domestic flights are short haul flights and
therefore only narrow body aircraft are used.

 Wide body aircraft are used on long haul, international flights. (3)

2.1.5 He must store his carry-on luggage in the overhead storage compartments on the aircraft
(1)

2.1.6  At the check-in counter he must produce valid identification.

 The assistant will verify his details on the computer system.

 His check in luggage will be weighed and a luggage tag will be placed on it to indicate his
destination.
  The assistant will print a boarding pass with the information for his flight and attach his
luggage tickets.

NOTE: The steps must be given in the correct order. Do not award marks if the steps are mixed up.
Candidates should write in a paragraph. Bullets have been provided in the memo for ease of
marking.

Entrepreneurial memo

1. Motivation Commitment
  Able to work independently

 Willingness to take risks

 Creativity

 Ability to recognise and take an opportunity NOTE:

Accept any relevant entrepreneurial skills. (2 x 1) (2)

2 Positive attitude A good team player

 Politeness

 Enthusiasm

 Respect

 Patience

NOTE: Accept any relevant personality qualities. (2 x 1) (2)

3. Suitable infrastructure

 Competition

 Lack of knowledge about available technology

 Governmental regulations

 Changes in the market (2)