Why Hotel and Rental Car CEOs Are Some of the Dumbest in Business

By: Donovan R. Martin Sr. – Editor in Chief

In a world where market disruption is often lauded and consumer-centric innovation drives value, two industries have bafflingly resisted even the most basic evolution. The hotel and rental car industries—two pillars of traditional travel—remain tethered to outdated, exclusionary policies that scream one thing: greed over growth. And if you’re an investor looking at long-term viability, that should be your red flag.

Let’s call it like it is. The CEOs of these companies either don’t get it or refuse to, or are just really dumb. They’ve had decades to fix a simple, stupid policy that alienates a huge chunk of potential customers: the requirement of a major credit card, not just for booking, but for massive security holds—anywhere from $300 to $1,000. Worse, those funds often take days to return. In some ridiculous cases, customers are mailed paper checks weeks later. Why? “Damage deposits.” But let’s not pretend this is about protecting property anymore.

The frequency of significant hotel room or rental car damage is minimal compared to the millions of transactions that take place annually. It’s not about risk mitigation—it’s about free-floating cash. When a customer’s funds are held, even temporarily, that money earns interest in the company’s bank accounts. Multiply that by millions of customers across the globe, and you’ve got a shadow business model that’s been enriching these companies for years while pretending it’s all for the customer’s benefit.

Insurance? Another sham. Rental car companies push extra insurance packages on top of the full coverage customers already carry through their personal policies or credit cards. They insist on charging for coverage that—if you scratch the surface—is already baked into the vehicle’s legal operating status. And speeding tickets? That’s a legal matter between the driver and the authorities. These companies claim they need a credit card for “traffic infractions,” but in reality, if a ticket is issued, it gets sent to the car company, who are obligated by law to forward it to the renter. The rental agency isn’t just quietly paying it off and moving on. That’s nonsense.

Now let’s talk accessibility. Millions of people—particularly younger adults, lower-income individuals, and international travelers—don’t have credit cards. Many rely on debit, prepaid cards, or direct bank payments. So why, in 2025, can’t these companies accept Visa or Mastercard debit cards without slapping on extra holds or outright denying service? Because their leadership refuses to budge. That is not just tone-deaf; it’s economic malpractice.

Meanwhile, Airbnb and VRBO have eaten the hotel industry’s lunch. Why? Because they make booking easier, cheaper, and more flexible. And rental car alternatives like Turo and TapCar are surging ahead for the same reason—they understand modern consumers. TapCar, for example, lets customers pay with debit, direct bank transfers, or even mobile wallets, and doesn’t tie up hundreds in arbitrary security deposits. It’s frictionless and forward-thinking, two qualities the traditional rental industry seems allergic to.

Here’s the bottom line: if a company’s business model is dependent on predatory holds, misinformation about insurance, and policies designed to exclude, then what you’re really looking at is a house of cards. Investors need to stop pretending these industries are too big to fail. The writing is on the wall. The hotel and rental car giants have been leaving billions on the table by clinging to outdated rules and alienating potential customers. And they’re not showing any signs of changing course.

Why would anyone invest in companies that seem hell-bent on alienating their own customers? If the goal is to make money, backing businesses built on stubbornness and short-sighted greed doesn’t exactly scream genius.