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table of contents November / December 2011 • Volume 24, No. 7
18 AVERAGE NUMBER OF PRODUCTS OFFERED CUSTOMER 18%
ASSOCIATE
25%
18%
13% 26%
14
■0 ■1 ■2
30%
■3 ■ 4 OR MORE
21%
24%
8% 17%
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FEATURES 14 Payless Turns 40 The car rental and sales company has managed to keep the same logo for 40 years, but has adapted to online reservation systems and other innovations that have affected the industry.
DEPARTMENTS 4
We’re all going global...
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20 Associate/Customer Perception Gap Revealed in Survey Are your associates’ perceptions aligned with the customer experience? A first-of-its-kind survey gives you exclusive data that can help you with your bottom line.
24 On-Campus Car Sharing Growing In a survey of 35 college transportation directors and administrators, Northcoast Research Partners estimates that the car sharing market could reach $1.6 billion.
ACRA: A History The association has been revised throughout its course, but continues to advocate for auto rental industry.
18 Ad-Wrapped Vehicles Hit the Road Wrap Media Group offers integrated advertisments, while rental agencies get secured rental periods, allowing deep discounts to customers.
Editor’s Corner
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Industry News Avis Budget Group realigns, Graves Law challenged again
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Car Rental Q&A Harnessing Social Media
28 30 31 32
Product and Vendor News Used Car Prices Ad Index RentAlert DTAG takes company off market
AUTO RENTAL NEWS (ISSN 1075-9409) (USPS 011-305) (CDN IPM# 40013413) is published bimonthly with additional issues in February and December, by Bobit Business Media, 3520 Challenger Street,Torrance, California 90503-1640. PERIODICALS POSTAGE PAID at Torrance, California 90503-9998 and additional mailing offices. POSTMASTER: Send address changes to Auto Rental News, P.O. Box 1068, Skokie, IL 60076-8068. Please allow 6 to 8 weeks for address changes to take effect. Subscription Prices - United States $25 per year; Canada $30 per year; Foreign $75 per year. Single copy price - $10; Fact Book - $30. Please allow 6 to 8 weeks to receive your first issue. Bobit Business Media reserves the right to refuse non-qualified subscriptions. Please address Editorial and Advertising correspondence to the Executive Offices at 3520 Challenger Street, Torrance, California 90503-1640.The contents of this publication may not be reproduced either in whole or in part without consent of Bobit Business Media. All statements made, although based on information believed to be reliable and accurate, cannot be guaranteed and no fault or liability can be accepted for error or omission. Printed in USA
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editor’s corner What We Can Learn from the Global Auto Rental Marketplace The growth in the industry is happening overseas, and if you’re not yet in the global mindset, you should know that the rest of the auto rental world is already there.
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just flew in from Ireland, and boy is my brain tired. The occasion was CarTrawler’s Car Rental Awards, the perfect venue to take stock of the auto rental scene outside of North America. On the plane ride home my mind was swimming with the notion that we must view auto rental in the context of the global marketplace. The intelligence gathered at the event ranged from talk of global business in general to auto rental specifically. I was schooled on the paternalistic phrase “emerging markets” — you can call them growth markets, but they’re no longer “emerging.” Markets such as China and India have, frankly, already arrived. The auto rental industry is now more global than ever. Avis Budget Group and Avis Europe are a single entity once again. European premium brand Sixt now has a foothold in America. Enterprise is growing its U.K. business. Larger independents such as Fox are expanding their affiliate base overseas. Vendors serving these markets are no longer tethered by country borders. While the rest of the world looks to North America as the epicenter of car rental — indeed, generating more than $20 billion in revenue in a $33 billion global market — we have no choice but to look abroad for growth. In many regions of the world, car rental was specific to inbound tourism; now, the idea of neighborhood car rental is just taking hold. AVASA, Hertz’s largest franchisee in Mexico, has a deal with WalMart to advertise in-store to rent cars from mobile units stationed in the parking lots. Often, it’s the independents generating that growth. In Poland, the largest car rental brand isn’t Europcar or Avis; it’s Express, an independent with a fleet of 4,000 vehicles and growing. In Croatia, Last Min-
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BY CHRIS BROWN
ute Rent a Car grew a fleet of 40 cars to 700 in only a few years. We can also look to those independents for innovation. Companies such as Guerin Car Rental in Portugal are leveling the playing field without cumbersome legacy IT systems but instead with cleaner XML messaging to connect with travel portals. U.K.-based Green Motion is using London’s congestion charging to its advantage by renting hybrids and saving their customers on the fees to enter the city. A holistic offering of transportation solutions is thriving “out there,” with companies such as Maggiore in Italy, which offers traditional rentals, commercial leases, long-term rentals and chauffeur services under one roof. We must increasingly look to those markets as they look to ours for cues on best practices and gamechanging trends. And so we launch Global Reporter, our new enewsletter that speaks to — and takes direction from — the global auto rental market. Global Reporter is a resource for international auto rental news and information as well as market intelligence and how-to articles from our neck of the woods. By extension, Global Reporter is transforming Auto Rental News into a global information resource. Some aspects of car rental operations, such as fleet buying and selling, insurance and regulatory issues, will always be local. The global car rental industry may not be on your radar on a daily basis, as you’re all busy renting to local customers, working local deals and selling at the auction down the street. To borrow a phrase, “think global, act local.” Expand your resource center, and bring what you need back into your operations. If you’re not yet thinking globally, the rest of the auto rental world already is.
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PATS ON THE BACK, HANDSHAKES, HIGH-FIVES. STANDARD WHEN YOU CHOOSE THE REINVENTED
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AS YOUR FLEET VEHICLE. 1
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With a history of low cost of ownership and high retained value, the Toyota Camry is the best long-term value for your fleet vehicle. There are many reasons why Camry has been the best-selling car in America for 13 2
of the last 14 years.3 And now, the new Camry comes with safety innovations like never before. Including ten standard airbags and available blind spot monitoring.4,5 If you want to get praised for choosing the right fleet vehicle, look no further than the reinvented 2012 Toyota Camry. Call 1-800 -732-2798 or visit fleet.toyota.com
Options shown. 1 2011 IntelliChoice, www.IntelliChoice.com; based on hybrid and 4-cyl. models. 2 Based on Vincentric’s 2011 Best Fleet Value in America analysis, mid-size sedan segment. MotorIntelligence.com, CY 1997-2010 sales. 4 Do not rely exclusively on the Blind Spot Monitor to determine if a lane change is safe. Always look over your shoulder and use your turn signal before changing lanes. There are several limitations to the function, detection, range and clarity of the monitor. For a complete list of limitations and directions regarding use of the monitor, please see the Owner’s Manual. 5 Available on XLE and Hybrid XLE models only. ©2011 Toyota Motor Sales, U.S.A., Inc.
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From Conversation to National Association: ACRA Celebrates Successes Through its various incarnations, the American Car Rental Association has continuously advocated for major car rental companies, franchise owners and large and small independents.Today, the association is stronger than ever.
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t is widely accepted that the car rental industry was born in Chicago in 1918 with a dozen Model T Fords. Thirty-seven years later, in 1955, the Car and Truck Renting and Leasing Association (CATRALA) was organized “to promote sound public policy with respect to the leasing and renting of motor vehicles without drivers.” At the same time, the American Automotive Leasing Association (AALA) was established to address a ruling that the IRS had made regarding capital gain treatments on the sale of used leased vehicles. The two organizations worked together and met to discuss mutual problems and planned ways to solve legislative concerns. Howard Smith, executive secretary of CATRALA, said in 1962, “CATRALA was designed to avoid being an ordinary trade association. It has one prime goal: legislative concerns.” In 1978, CATRALA dissolved and the American Car Rental Association (ACRA) and the Truck Renting and Leasing Association (TRALA) were formed while AALA continued to represent the automotive leasing companies. According to Ken Elder, a retired Dollar Thrifty franchise owner in Washington, D.C. who had always been politically involved, the major car rental companies and a number of larger independents and franchise operators began sharing lunches and opinions about legislative issues that were affecting the industry in the late ’70s. From those casual meetings, the attendees recognized a need for a national association that would share a unified voice.
ACRA was growing but still needed some assistance to organize more effectively. In the early ’80s, Mike and Mary Payne, who ran a public relations firm, assisted Tennant with a Holiday Rent a Car convention and were subsequently hired to give ACRA the boost it needed. In 1988 Jan Armstrong, from Merchants Associates, became executive director of ACRA. She remained with the association until it was disbanded in 1998. Avis, National, Budget, Alamo, Dollar, Thrifty and Enterprise were corporate members of the association beginning in the ’80s. Frank Olsen, CEO of Hertz from 19771999, chose to pursue legislative concerns in-house and did not join ACRA. Jim Shapiro, formerly the owner of the American International Rent a Car franchise system, recalls that from 1985, the association alternated the position of president every year between a corporate employee and a franchisee. Shapiro was president from 1992-1993. Many CEOs and senior corporate executives steered ACRA through the ’90s, assuring that ACRA was a moving force in Congress; they included Don Himelfarb of Thrifty Car Rental, Gary Paxton of Dollar Rent a Car, Phil Schailer of Alamo Car Rental, Charles Bovino of Avis Rent a Car, and Sandy Miller, Roger Gelder and Bob Aprati of Budget Car Rental, as well as Wayne Kauffman from Enterprise.
Independents, Franchises Splinter Off ACRA Builds its Base Jim Tennant, currently principal of the Tennant Group, was asked to join the newly formed ACRA in 1980. At the time, Tennant was president of Holiday Rent a Car International Inc., a car rental franchisor based in Florida. It was the association’s goal to represent as many operators as possible, so the association welcomed the smaller systems, companies and independents to join.
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According to Frank Colonna of Triangle Rent a Car, it was determined by a few that the interests of the major players may vary from those of the independents and franchisees. The idea was that two organizations would make a better structure, and in 1996, the independent car rental companies decided to start their own association called the Association for Car and Truck Rental Independents and Franchises (ACTIF).
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Having two associations was not as successful as planned and the decision was made to disband ACRA in 1998, leaving ACTIF as the sole represention of the industry. The late Russell S. Bruno was executive director of ACTIF from 1996-2003. The first president of ACTIF was Sherb Brown of Bobit Business Media, publisher of Auto Rental News. This new association was dependent on vendors as well as members to be financially solvent. During this time, the Car Rental Show — formerly known as the American Car Rental Convention and a product of ACRA — became a joint venture with ACTIF and Auto Rental News. Other presidents of ACTIF included industry consultant James Schalberg in 2000, Shapiro in 2001, Dana Clay (originally with TSD) from 1997 to 1999 and several additional vendor presidents. In 2003, it was determined that the national association should include all car rental companies. From that time until 2005, the association was known as ACTRA, or American Car and Truck Rental Association. ACTRA was run by the Harrington Association, a management firm, with Maggie Tatton as the associate director. Kevin Miles of Budget Car Rental in Columbus, Ohio was president in 2004-2005.
An Industry Re-unifies Further restructuring of the association came in 2006 when the acronym ACRA was resurrected and the current association was formed, replacing both ACTIF and ACTRA. Neil Abrams of Abrams Consulting became the interim executive director and Dick Radzis from ACE Rent a Car was elected president. Once again, Shapiro was instrumental in assisting the association with its formation. Sean Busking served as executive director until 2010, when he joined Fox Rent a Car and Sharon Faulkner moved from board member to director. Faulkner had served on the ACTIF and ACTRA boards as well as on legislative committees of all the national associations. In 2008, Bob Barton of U-Save Auto Rental and Franchise Services of North America became president of ACRA. Today, under his leadership, ACRA has become an influential voice for the car rental industry, along with fellow board members: Robert Muhs, Avis/Budget Corp.; Dick Radzis, ACE Rent a Car; Rick Stevens, Payless; Gil Cygler, Allcar Rent a Car; Gordon Reel, Enterprise Holdings; Robert Klyce, Avis Franchisee; Frank Colonna, Triangle Rent a Car; and Joe Knight, Fox Rent a Car.
ACRA in the 21st Century For the last several years, ACRA has emerged as the industry voice on public policy issues facing the car rental industry. ACRA successfully held off efforts of state and local governments to add discriminatory taxes onto car rental customers in Arizona and Florida. For the first time in recent memory, the industry witnessed
the end of the 2 percent rental tax in the state of Washington that was established in 1996 to build Safeco Field. The tax was scheduled to end when the bonds from the stadium were to be paid off on Oct. 1, 2011. Despite numerous attempts by state and local leaders to continue the tax and divert the revenues for other projects, ACRA held firm and prevailed. To prevent this ongoing state-by-state, city-by-city approach of fighting these taxes, ACRA is pursuing federal legislation, H.R. 2469, with the help of Rep. Steve Cohen, D-Tenn., and Rep. Sam Graves, R-Mo., that would prohibit future taxes imposed on car rental. ACRA is gaining traction on this issue, particularly in the House of Representatives. In Florida, for example, ACRA dissuaded the Legislature from imposing a cap on administrative fees for toll violations. ACRA has also worked on the modification of recall legislation at the state and federal levels to assure the safety and repair of rental vehicles in a timely manner.
Meeting the Challenges Over the years, the car rental conventions’ show programs had a consistent message: 1996: “The car and truck rental industry is facing great challenges.” 1995: “The past few years have been among the most challenging in our industry, and there are no easy answers for the years ahead.” 1993: “Our industry has come through another turbulent year of additional bank failures and staggering airline losses.” Some 18 years later the industry faces new challenges, and ACRA is still here, better than ever, making a difference. ACRA has become a recognized, strategic industry organization that speaks with a unified voice and a consistent message. With the exception of Hertz, ACRA has obtained the support of all the majors: Enterprise Holdings (including National and Alamo), Avis Budget Group and Dollar Thrifty Automotive Group; most of the large, midsize and small rent-a-car businesses; and the many vendors that provide services to the auto rental industry. Every successful industry has a national trade association that works on behalf of its members. ACRA is no different. But the association can only be as strong as its members allow it to be. History proves that together we can accomplish so much more. ACRA asks that all car rental businesses of all sizes and vendors join ACRA to help promote sensible legislation that will help the industry grow strong. The first ACRA was founded to proactively monitor and document legal, public policy and legislative issues affecting the car rental industry. Today, ACRA carries on that tradition and is bigger, stronger and even more committed to making its members successful in a challenging industry.
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industry news Avis Budget Group Realigns on Completion of Avis Europe Avis Budget Group Inc. announced that it has completed its acquisition of Avis Europe PLC, according to an Oct. 3 press release. Prior to the completion of the acquisition, Avis Europe had been an independently owned licensee of Avis Budget Group, operating the Avis brand in Europe, the Middle East, Africa and Asia. Since the merger, Avis Budget Group created three new operating regions — the Middle East and Africa (EMEA), North America, and Latin America and Australasia — that became effective on Oct. 3. The move follows an announcement from the company on Sept. 14 that it would drop its bid for Dollar Thrifty Automotive Group. The combined company of Avis Budget now has branded rental locations in approximately 175 countries. “This transaction positions us well to capture incremental growth in global travel and will enable us to more effectively serve our cus-
Boston Measure Would Require RACs to Report Renters to RMV Boston City Councilman Rob Consalvo hopes to get auto rental companies involved in fighting crime, according to the council’s August meeting minutes and a separate document filed by Consalvo Aug. 24. Consalvo is pushing forward a measure that would require car rental agencies to report their customers’ names to the city’s Registry of Motor Vehicles (RMV) database each time they rent a car for more than 30 days. The law would allow police officers to quickly obtain license plate and driver information when a rented vehicle is involved. The order document from Consalvo cites that criminals use rental cars, “in part because the name of the renter of the vehicle is hard to trace quickly.” Currently in Boston, once police obtain the license plate information of a rental vehicle involved in a crime, only the name of the rental company is immediately available. “Police officers should have the information on who rented the vehicle in real time to ensure the quickest investigation possible,” the order contends, adding that through RMV, police would be able to access the information electronically, whereas current law only requires a written record which must be obtained through contact with the rental agency. The Boston Herald reports that the city has a long history of rental cars used in crimes, such as a shooting that seriously injured a man in early September. Consalvo’s order has been referred to the city’s committee on public safety, and as of press time, a hearing had been scheduled for Sept. 26 but was subsequently postponed with a new date yet to be announced.
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tomers worldwide,” said Ronald L. Nelson, Avis Budget Group chairman and CEO. The company has also filled three new positions to oversee each division. Larry D. De Shon was appointed president, EMEA; Thomas M. Gartland has been named president, North America — a region which will now include the company’s U.S. and Canada op- Larry D. De Shon, erations; and Patric Siniscalchi was named presi- Avis Budget Group dent, Latin America/Australasia, overseeing Avis president, EMEA and Budget in the Caribbean, Central and South America, Australia and New Zealand. Additionally, Avis Budget Group announced the appointment of Alun Cathcart to fill a newly created seat on the company’s board of directors. Cathcart has been involved with Avis since 1980, and previously served as CEO of Avis Europe.
Trial Lawyers Seek Supreme Court Review of Graves Law Trial lawyers from the Center for Constitutional Litigation PC (CCL), a branch of the Association for American Justice, filed a petition for review, formally known as a petition for writ of certiorari, Sept. 19 with the U.S. Supreme Court in an attempt to challenge Graves Law (49 US 30106). The law, which was first known as the “Graves Amendment” of a highway bill in 2005, prohibits states from imposing vicarious liability on non-negligent rental and leased vehicle owners. According to the Truck Renting and Leasing Association (TRALA), the public had until Oct. 21 to file responses and briefs on the petition for review. The petition from CCL comes after a ruling on the Vargas v. Enterprise case in April that upheld the vicarious liability protections outlined by Graves Law. In its decision, the Florida Supreme Court said, “Congress in 2005, through the Graves Amendment, clearly sought to eliminate vicarious liability for a specific category of owner/lessors that under Florida’s reforms remained, to an extent, exposed — those ‘engaged in the trade or business of renting or leasing motor vehicles.’” The law, which has saved the industry millions in frivolous lawsuits, according to TRALA, has been continuously challenged since it took effect in the 1990s, but has only grown in its influence. For example, in a June 2010 New York Supreme Court decision, Zipcar, the car sharing company, was granted Graves’s protection, and in October 2010, a Canadian province also approved vicarious liability protections for non-negligent auto rental companies. Minnesota and Iowa courts have also held up the law in other cases challenging the constitutionality of Graves Law.
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industry news CarTrawler Announces 2011 Car Rental Awards The inaugural CarTrawler Car Rental Awards winners were announced in a gala ceremony at Dromoland Castle in County Clare, Ireland, on Oct. 13. The awards were presented in association with media partner Auto Rental News. The Car Rental Awards are designed to annually recognize auto rental companies worldwide that have demonstrated a superior level of performance and service to their customers in partnership with CarTrawler, a global provider of its next generation car rental distribution system. The awards are a quality initiative created by the eTrawler Group to promote best practice in the car rental industry. Car rental suppliers were nominated for prize categories based on fleet size and geographic region, culminating in the selection of three category winners and one overall Car Rental Provider of the Year, which looks at customer care cases to rentals, fleet size, customer feedback, availability and supply. And the winners are: Alamo National Citer, France was named Large Enterprise Fleet; the Medium Enterprise Fleet award went to Europcar, South Africa; and the Growing Enterprise Fleet award winner is Niza Car, Spain. The Overall Car Rental Provider of the Year went to Alamo National Citer, France. “How do I feel after having been awarded? The first word that comes to me is pride,” said Gerard Maitre, CEO of Citer. “It’s also a great satisfaction for the team in France to see their efforts throughout the year being recognized and rewarded.” Alamo National Citer, based in Paris and founded in 1968, rents a fleet of 15,000 vehicles from 207 locations. The company is currently embarking on a large-scale green initiative, which includes a carbon-offset plan and a low-emission fleet with a 128 g/km carbon emissions average. Along with a fleet of hybrids, the company has 180 electric cars already on rent. Europcar South Africa, based in Johannesburg and founded in
The winners of CarTrawler’s 2011 Car Rental Awards: (from left) Francisco Lucena, director commercial of Niza Cars, Spain; Gerard Maitre, CEO, Alamo National Citer, France; Anne Leonard, channel director international, Europcar, South Africa and Laurent Maurice, inbound leisure sales manager, Alamo National Citer, France. 1979, has a 16,000-vehicle fleet serving more than 120 locations in South Africa, Namibia, Botswana, Lesotho and Swaziland. Europcar South Africa has also been recognized by World Travel Awards as Best Car Hire Company in Africa, 2006-2010, as well as recognized for service excellence at the 2010 ACSA Feather Awards, for O.R. Tambo, Cape Town and King Shaka International Airports. Niza Car of Spain, founded in 1968 and based at Malaga Airport, has six airport locations and three downtown offices that are served by a 2,300-vehicle fleet. Nominations for the 2012 awards are now being accepted. Go to www.autorentalnews.com for a photo gallery of the event. For more information on the awards visit www.carrentalawards.com.
Enterprise President, COO Named One of American’s Most Powerful Women in Business The only one to make the list from the travel industry, Enterprise Holdings President and COO Pam Nicholson has been named by Fortune magazine as one of America’s 50 Most Powerful Women in Business. Nicholson moved up three places from last year’s rankings to come in at No. 26. “We see this honor as a fitting tribute to the results Pam has helped us achieve over her 30-year career with our business,” said Andrew Taylor, chair-
man and CEO of Enterprise Holdings, in an email statement. “Just three decades after she started as a management trainee — like so many of our operational leaders — Pam now stands as not only the highest ranking female at Enterprise Holdings, but in the entire $20 billion U.S. car rental industry.” Kraft Food Chairman and CEO Irene Rosenfield took the top spot — up one from her ranking last year.
NICHOLSON
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industry news Alamo Gets Knocked Out of Rochester Airport Snorac LLC., a regional subsidiary owned by Enterprise Holdings, is filing suit against Monroe County Airport Authority (MCAA) for its proposal and contract process at the Greater Rochester International Airport, which had opened six rental contracts that seven companies competed for. MCAA did not publicly open and read aloud all the proposals, which had been promised by the authority in writing. Rather, MCAA staff members opened the proposals privately a day earlier than the deadline. Alamo, though, turned its proposal in on deadline day, according to Enterprise Holdings spokesperson Laura Bryant. From here, MCAA listed the revenue offers from highest to lowest and took only the top six. Alamo came in last and was therefore not chosen for one of the new contracts, which be-
came effective Oct. 1. The state judge taking the case said he is reserving his decision to annul the bid process, and will announce his ruling in 60 days from the day he first heard arguments on Oct. 12. “We have several concerns with how the bids were reviewed and selected, and have attempted, without success, to get our concerns addressed through normal channels,” Bryant wrote via email. “Unfortunately, we have been forced to take legal action as a last resort,” Bryant added. “Our goal is to get this issue resolved as a quickly as possible and, as part of our good-faith effort, work with the airport authority to ensure that the process is as transparent and accountable as possible for all applicants going forward.”
Union Claims Hertz Violated Contract in Suspending 34 Muslim Shuttle Drivers On Sept. 30, 34 Muslim shuttle drivers were suspended from their jobs at Hertz for taking too long of breaks — typically for praying — outside their two 10-minute breaks they get legally through the state of Washington. The workers who weren’t clocking out if they exceeded the 10-minute break at the Seattle-Tacoma International Airport had been warned repeatedly, according to Hertz spokesperson Rich Broome in a statement Oct. 9. Broome said other Muslim employees who pray during work and who clock out appropriately have not been suspended, making this a nonreligious issue. “Several of our Muslim employees at the Seattle airport are complying and are not affected by the disciplinary action, which undercuts the false contention that this issue is related to prayer or religion,” Broome said. He added, “This issue arose when breaks for prayers were extended for unacceptably long periods beyond 10 minutes for nonreligious activities.” But, Teamsters Local Union 117 is filing a charge with the National Labor Relations Board (NLRB) for “unfair labor practices,” according to an Oct. 5 press release from the union. Local 117 is also considering filing a wrongful discrimination complaint with the Washington State Human Rights Commission over the issue. The release also states that in 2010 the union and Hertz came to a labor agreement stating that the employees weren’t required to clock out for prayer time, which the union says usually takes 3-4 minutes. As well, it claims that Hertz management had been engaging in favoritism of the non-Muslim workers while displaying disrespect to the Muslim workers, who account for about 70 percent of the Hertz shuttle drivers at the Seattle airport. But Broome says Hertz has made efforts for at least 15 years to accommodate its Muslim employees at this agency by creating a space for them to pray, among other amenities. In a letter to The Seattle Times on Oct. 10, Tracey Thompson, secretary-treasurer for Local 117, wrote, “Setting aside that this policy is unenforceable because it conflicts with our agreement, Hertz did not give the union notice that it intended to implement such a policy or give us an opportunity to bargain over it, as the law requires the company to do.” As of Oct. 18, some workers had been allowed to return to work, according to Paul Zilly, Local 117 spokesperson. “But the central issue has not been resolved,” he said. “It still remains to be seen what exactly will happen.” Zilly said Hertz is requiring the workers to sign a letter that states they will clock out for their breaks to pray, but that they would still be paid for the 10 minutes as outlined by state law. “They just want to be able to monitor the time,” Zilly said.
Facebook Used to Recover Stolen Rental Vehicle According to Deseret News of Salt Lake City, after almost a month of attempting to contact 42-year-old Jennifer Marshall Hansen, who stole a 2009 Ford Explorer Aug. 25, Affordable Rent-A-Car finally tracked down the car thief via Facebook. Hansen of Sandy, Utah, was scheduled to return the vehicle Sept. 1. One of the rental agency’s employees finally found Hansen via Facebook and sent an “Add Friend” request. Hansen approved the request and agreed to meet the male employee without knowing he was from the rental agency — and she arrived in the stolen Ford. The employee immediately contacted the police. Hansen is being charged with one count of rental car theft, which is a second-degree felony.
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GM Enters Peer-to-peer Car-Sharing Business General Motors and RelayRides, a peerto-peer car-sharing company, are teaming up to create a program that allows GM vehicle owners to rent out their idle cars STRATEGIC MARKET through the RelayRides marketplace. CONSULTING RESEARCH The program, set to launch in early 2012, is GM’s first large-scale involvement in car sharing; it is aimed at making it easier SUPPLIERS CAR RENTAL for those without a vehicle to access temporary and affordable transportation in a Chevrolet, Buick, GMC or Cadillac. ALLIED TRAVEL/ CARSHARING/ TRANSPORTATION Through RelayRides, GM vehicle ownFLEETSHARING INDUSTRIES ers can choose to rent out their vehicles while remaining in control of the rates and As our industry continues to evolve with a much-changed pro¿le, and facing a business climate never before encountered, the ABRAMS brand of specialavailability of the car. RelayRides additionalized consulting and market research services has in fact been recognized as ly provides an online marketplace and a $1 the leader in its ¿eld. Today, our market place is worldwide and our client base represents a broad spectrum of businesses and industries related to the travel million insurance policy to make the transand transportation industries. action safe and convenient. RelayRides will leverage OnStar to allow RelayRides borrowers to unlock GM cars with their mobile phones. The mobile Preserving the Entrepreneurial Spirit of the Auto Rental, Travel Service, and Transportation Industries, WORLDWIDE, since 1982. phone application will also allow customers to check for available vehicles, make a res3020 Westchester Avenue • Purchase, NY 10577-2525 (914) 696-5100 • Fax (914) 696-5101 ervation online as well as check future resemail: nabrams@abramsconsulting.com • website: www.abramsconsulting.com ervations, and locate their reserved vehicle via GPS. For vehicles that are not OnStar enabled, RelayRides must install a small device 10/14/11 in the car to provide convenient access toARN1111abrams.indd 1 borrowers. “We’re using technology to make both our older and newest models car-share ready and available for those owners who choose to participate in car sharing,” said Stephen Girsky, GM vice chairman. “Our goal is to find ways to broaden our customer reach, reduce traffic congestion in America’s largest cities and address urban mobility concerns.” The program will be promoted through various events and demonstrations in California to showcase GM’s OnStar and RelayRides technology. The events will also feature Chevrolet vehicles including the Volt extended-range electric car.
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Shelby Clark conceived the idea for RelayRides, a peerto-peer car sharing service, as he passed hundreds of unused personal vehicles in Cambridge, Mass. while trying to get to a Zipcar two and a half miles away.
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AN
ENTREPR Payless Car Rental has reached its 40th birthday with a singular focus on a business niche and the vision of entrepreneurs. BY CHRIS BROWN
T
here are two paths in the business world: the corporate ladder or your own way. The 40-year history of Payless Car Rental is a story of entrepreneurs — from the company’s founder to its franchisees and its present-day president and CEO. These disparate groups each chose their own path to build a business but never wavered from staying focused on the cost-conscious leisure traveler.
Th PPayless The l llogo hhas remained i d unchanged h d since 1989, when it was created by Bob DeVito, a graphic artist and friend of Jim Tennant. “From day one, anyone who proposed changing the logo, I wanted to keep it,” Lin says.
An Entrepreneur’s Vision John “Les” Netterstrom was working in sales for a book cloth company in Illinois when the offer came to take a vice president’s position at the company’s headquarters in Rhode Island. Netterstrom wasn’t keen on uprooting the family. But what he really wanted, says his widow, Zenta “Dusty” Netterstrom, was to run his own business. And so — in one of those career- and lifedefining moments — he turned down the job. Instead, “He decided to buy a Thrifty franchise,” Dusty recounts. Netterstrom didn’t know anything about the car rental business, except that he rented a lot of cars at airports while traveling for his sales job. Netterstrom’s Thrifty territory was the car rental mecca of Idaho, and soon after so was Spokane, Wash. Along with Dusty, Netterstrom ran his franchise through the last half of the ’60s and ran it well. But Thrifty corporate wasn’t necessarily listening to all his big ideas. He had an entrepreneur’s mindset, and he needed to break out on his own. “Les had a lot of ambition,” Dusty says. “He had a vision for a lot of things.” By the early 1970s, higher fuel prices forced Americans to consider smaller cars for the first time. But at airport rental counters, the established car rental agencies were pushing larger
cars for higher rates — as Dusty puts it — to make enough money to cover their airport concession and lease fees. Netterstrom thought there was a place for a cheaper alternative that rented smaller cars off, but near, the airport. In 1971, the first Payless Car Rental location opened in Spokane. The name fit the business model, though through the years “a lot of people thought the name was really ‘Pay Les,’” Dusty jokes, “especially the franchisees.” Not long after, Netterstrom created the Payless Car Rental system and began franchising. The early days were spent marketing the new niche. “I don’t know how many feelers I sent out to get people interested in a franchise, but I contacted a lot of car dealerships,” Dusty says. One of those dealers was a former governor of Utah. He put a rental office in his Ford dealership and called other Ford dealerships in Utah to do the same, Dusty says. “We always said the Mormons in Utah got us started,” she remembers. “Things just sort of snowballed from there.”
A Logical Combination By 1982, Payless developed 100 locations and was solidly profitable. But the company’s coverage was primarily in the Northwest and
Midwest, while another independent franchise system had been growing rapidly in other parts of North America. Canadian-based Holiday Rent A Car started in the 1960s out of a Ford dealership in Peterborough, Ontario. The company had gotten onto airports in Canada in the late ’70s, and grew quickly to 40 franchise locations in Florida and other southeastern states. In 1982, the Holiday system owners — the Tennant family — made an offer to buy Payless. The two companies combined their franchise systems to become Holiday-Payless Rent-ACar. The combination provided greater national coverage, and for the most part, non-competing franchise territories. “The two franchises fit together well,” says Jim Tennant, who ran Holiday’s U.S. division for two years. Dusty concurs: “It fit together like a jigsaw puzzle.” The Netterstroms moved the Payless headquarters to St. Petersburg, Fla. and Les worked to transition the company. Yet in the years
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RENEURS’ COMPANY Fred Lin, CEO (left) and Rick Stevens, president, have steered Payless Car Rental through acquisitions, overseas growth, airport expansion and into a “preferred” online presence. that followed, “The responsibilities and the work required to grow a smaller system were more difficult than our family realized,” Tennant recounts. Moreover, the family still had some lingering financial obligations from the initial sale. In 1987, the Tennant family ended up selling the company back to Netterstrom, and Holiday franchises began transitioning to the Payless name. Then Les Netterstrom got cancer.
A New Owner Fred Lin didn’t start out as an entrepreneur. When Lin came to America from Taiwan in 1979 he was busy climbing the corporate ladder in sales and marketing for Sampo, a major Taiwanese electronics company. At the time, Sampo was looking for new business opportunities. Lin was already somewhat familiar with the automotive industry, having brokered the deal to establish Sampo as the distributor of Chrysler vehicles in Tai-
wan. Similar to Netterstrom, Lin knew nothing about car rental outside of renting a lot of cars for his sales job. By 1989, Dusty was running the day-to-day operations of Payless as her husband’s health deteriorated. It was time to sell the company. On Sept. 28, 1989, Lin signed the agreement with Les Netterstrom to purchase Payless Car Rental. Netterstrom died in 1992. Lin knew he had to learn the business of car rental — and quickly. Lin credits the company’s existing employees with helping him to understand the business. “I came by myself and didn’t bring anyone with me to acquire this company,” he says. “I really appreciated all the employees that helped me a lot.” Lin relied on Sampo for support as he got his feet wet in the car rental industry. But in the coming years he worked to divest from Sampo, replacing the company with non-corporate, silent partners. Eventually, Lin became the second entrepreneur-owner of Payless, and he was ready to implement his own ideas to bring the company into the coming decades.
A New Vision Lin was dedicated to continue serving the discount leisure customer, but primarily from onairport locations. He knew he could do this by leveraging one of the company’s key strengths: the Payless reservations engine, which wasn’t hindered by the legacy IT issues the bigger car rental companies faced. With Lin’s background in electronics, he committed to making it “better, stronger,” he says. The 1990s, Lin admits, were lean times. When he bought the company, the franchise system concept was new to him. “It was a big lesson to learn,” he says. A year after acquiring the company, Lin says changes at the car manufacturers — such as more stringent buyback programs
and tightening credit lines — made survival as a car rental franchisee more difficult. Lin worked to make the company more corporate controlled through a plan to buyout existing franchises. This plan gained momentum when Rick Stevens came aboard as chief financial officer. Though he was involved with Payless as far back as 1989, Stevens officially joined the company in 2000. He comes from an accounting and consulting background with an expertise in mergers and acquisitions, and he worked on the deal that sold the company from Netterstrom to Lin. By the latter half of the 1990s, Payless — not surprisingly — formulated plans to go public. However, Stevens knew that a company with very small topline revenue was not going to excite potential investors, and a fractured franchise base was not going to help either. “You need to own and operate your own stores and create your own control and put a consistent product out there,” Stevens says, adding control over fleet buying as another top priority. “It was hard to get everyone together on the same page.” Stevens became the principal architect of the company’s subsequent acquisitions.
The Corporate Conversion In 2001, Payless created Avalon Global Group as a holding company to oversee all the brands, which included Payless Car Sales that started in 1991, and newly formed Payless Parking. Plans for an IPO were shelved after the recession following 9/11, though plans to convert franchises to corporate stores moved ahead. The company bought Jim Shapiro’s locations in Orlando and Tampa in 2002. Shapiro started as an American International franchisee, which morphed into Americar, but he signed on to take Payless reservations and then became a
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Payless franchisee in the mid-90s. Before selling both locations to Payless corporate, he ran a dual operation with Americar — though that brand gave way to Payless exclusively. Shapiro was running a strong business with close to 1,500 cars, though he saw the writing on the wall as a smaller company. “I was still getting reservations, but down the road, it didn’t look that good to me,” he says. “I’d be at the whim of the Orbitz’s of the world, and I didn’t know if I’d have enough volume to keep them interested. Payless had the connectivity and the ability to get reservations.” Throughout the buyout process, Lin realized the value of a seamless transition. “My philosophy is to try to keep existing employees when we acquire franchise locations,” he says. This couldn’t have been more prevalent than in Orlando and Tampa; Shapiro counts a dozen people who started in the 1970s with him and are still employed by Payless today. “It ended up being a pretty good deal for them,” he says. In 2004, Avalon purchased the assets of the former Las Vegas franchisee. Buyouts of the Denver and Fort Lauderdale franchises followed in 2005 and Phoenix’s Sky Harbor franchise the following year. The company did so with the help of mega car dealer Denny Hecker, who became a joint venture partner for those stores as well as one in Minneapolis. Payless leased fleet through Hecker and initially the deal worked out well, Stevens says. But, Hecker bought Advantage Rent-A-Car in 2006. Advantage’s pricing was a problem, plus Hecker’s OEM deals led to over-fleeting and “way too rich of a fleet” for Payless customers, Stevens says. Hecker’s bankruptcy further muddied the waters. “They were turbulent times, but we were able to gain back control of all of those stores,” says Stevens, who was promoted to president in 2005 and is now part of the ownership group.
Payless then and now: Nearairport locations have given way to on-airport counters and space in new consolidated rental facilities, such as the one in Miami International Airport.
Elbowing onto Airports Built on its strong IT backbone and reservations engine, in March 2009 Payless was added to the Expedia Preferred Vendors view, perhaps the biggest feather in the company’s cap. Payless also offers rates through Orbitz, Priceline and Travelocity. “Preferred status with the OTAs (online travel agencies) has been a key to us succeeding,” says Stevens, who also credits the Payless website and 1-800 number as key strengths. And, in keeping with Lin’s employee retention philosophy, Stevens also credits the company’s success to the quality work of longtime operators such as Rob Dau, Blair Van Wagoner and Steve Blakley. Stevens and Lin understand that surviving on the OTAs requires good, consistent customer service, something the company continually measures and strives to improve. The OTAs also want as much coverage as possible, which is driving the company’s latest expansion push. “We will approach any good airport regarding available space,” Lin says. In 2010, Payless added San Francisco, Oakland and Miami to its portfolio of corporateowned stores. Last year the company opened at Albuquerque (N.M.) Sunport Airport, and in 2012 it will open corporate stores in the consolidated rental facilities in the San Jose, Calif. and Seattle, Wash. airports. What challenges does Payless face today? The company successfully weathered the credit crisis of 2008-2009, replaced its lenders and even managed to grow in this time. Today, one of the biggest challenges to growth is elbowing onto airport counters, Stevens says. However, the trend toward conracs (consolidated rental facilities) levels the play-
ing field to an extent, with airports realizing the need for a competitively priced alternative, Stevens says. Being in terminal is the goal. “In terminal the consumer sees us as a major company,” Lin says. Another recent initiative involves a franchise deal in Florida to combine Payless Car Rental and Car Sales under one roof. While the car rental focus remains on airport, Lin says these dual-function stores provide an inroad to the local market.
Sensible Growth Though 70 percent of revenues comes from the 10 company-owned stores, Payless still has some larger franchises in Atlanta, Pittsburgh, Minneapolis, San Diego, Kansas City and Los Angeles (owned by Fox Rent a Car). Payless counts 80 franchise locations in the U.S. and overseas. Lin’s next big initiative is opening Payless locations in China — an enormous, emerging market for car rental. Lin has been traveling to China for several years in preparation. “I think the timing is right,” he says. “We’re ready to go.” Stevens predicts $70 million in total revenue this year and is looking to double that in the next three years. That growth will always come through serving the Payless niche, as Stevens puts it, the cost-conscious leisure traveler — i.e. the guy who’s searching for deals on the internet. “Hopefully we can win over those people and they’ll come back to us,” he says. For Lin, growth will come but not by losing sight of the Payless customer. “We’re just focused on what we do best,” he says. “We’re still a small company. We try to please the customers we have.”
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MAKE WAY ON ATLANTA STREETS Wrap Media Group’s rental vehicle campaigns provide a win-win-win: secured reservations for the rental agency, a deep discount to the rental customer and a way for the advertiser to push out its brand where billboards can’t. By Joanne Tucker
Car renters visit the same destinations in the wrapped vehicles that are frequented by prime candidates for the advertised brands. Sheets, an energy mouth strip company, stocked the rental cars with samples.
W
hen the founders of Wrap Media Group look at rental cars, they see empty canvases — or maybe moving billboards — and since launching the advertising company Aug. 12, they’ve wrapped 25 vehicles with ads for Budget Rent a Car of Atlanta, a licensee. “In many cases, outdoor advertising is difficult to measure,” says CEO and partner of Wrap Media Group Dennis Custage, who was once COO of National and Alamo’s foreign territories. But with rental cars equipped with global positioning systems (GPS), advertisers
get an in-depth look at where the ad traveled, for how long and time of day. Sheets, an energy-boosting mouth strip company, is Wrap Media Group’s first rental car advertiser. Warren Struhl, CEO of Pure Brands, which owns Sheets, says choosing Wrap Media is part of the company’s strategy to reach markets that traditional advertising platforms are unable to. “We also like to look at more fresh and renegade opportunities,” he says, adding, “I saw Wrap Media as a very forward-thinking way to promote our brand and get drivers engaged in our brand.”
The Wrapped Reservation To reserve the ad-wrapped car, customers can reserve the vehicle on location or click the “Sponsored Rental” tab on the rental agency’s website, which starts a qualification process. Potential renters answer questions about their purpose of travel, planned destinations, number in party and other questions regarding their trip. “We’re trying to target leisure travelers,” says David Berke, COO and co-partner of Wrap Media Group. The discount percentage offered may vary since the rental agency can change the amount
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Wrap Media Group has wrapped 25 vehicles for Budget Rent a Car of Atlanta.Wrap Media pays the car rental company a fixed rate per vehicle for the duration of the campaign, and in turn the car rental company offers a discount to the customer — a rate that can be altered depending on utilization.
depending on utilization throughout the ad campaign. For example, the inaugural renters at Budget Atlanta — a family of four — paid about $80 for a four-day rental that would have cost more than $300. Currently, though, the website lists getting “up to 50 percent off” with the sponsored rental. According to Custage, Budget reports offering an average of 25 percent off to maintain utilization targets. Wrap Media also gives the customer recommended locations and hotspots the advertiser would like to see the vehicle venture. In Atlanta, which so far is the only city Wrap Me-
dia has vehicles, “we really don’t have a single case where we’re not happy with where the cars are going,” Custage says. For those who don’t qualify for the adwrapped rental, Custage maintains that the partnership is still beneficial to both the advertiser and the rental agency. He says that Budget Atlanta’s website traffic has increased significantly, and non-qualifying customers tend to still rent a vehicle from Budget Atlanta since they’re already on the site. In the first 30 days of the offer, 448 customers clicked the “Sponsored Rental” tile and completed the questionnaire, according to Custage. Those that did not qualify, were still directed to the Budget site, and were at least exposed to the advertiser. Wrap Media installs GPS on the vehicle if it isn’t already, and provides training to the counter staff members to make sure they understand the ad-wrapped rental. “We don’t want the car rental company to have to do anything outside of what they already have to do,” Custage says. And for the customer, Budget Atlanta hasn’t reported any customer disputes, according to Custage.
Clear Compensation and Results Wrap Media pays the car rental company a fixed rate per vehicle for the duration of the campaign. If cars aren’t in reservation, Wrap Media may pull a rental vehicle out of fleet for a few days accompanied with a “brand ambassador” from the advertiser’s company. “The
car rental company should be indifferent indifferent as to whether it’s a third party renter or a driver we’ve put in the car,” Custage says, adding that agencies can take comfort in getting a fixed price for the length of the ad campaign. In giving results to the advertiser, Wrap Media is able to show how many miles the vehicle traveled and other targets set out at the beginning of the ad-wrap campaign. “We don’t seem to have a problem making the target because of the fact that so far the uptake on these discounts has been extraordinarily good,” Custage says, adding that GPS tracking allows proof in meeting these targets. Both Custage and Berke report a large demand from potential advertisers, and as a result Wrap Media is on the hunt for additional rental partners. “We’re looking for companies that have coverage in the cities and tourist sites where we have a demand from advertisers,” Custage says, adding that car sharing is another canvas they’re looking to potentially fill. And so far, Budget Atlanta is pleased with the service. “Wrap Media Group is well-managed and pays a lot of attention to operating detail based on their knowledge of the car rental industry,” says Heather Etzler, general manager of Budget Rent A Car of Atlanta. Wrap Media doesn’t just slap ads on rental cars, but acts as an integrated advertising agency, Custage says. Depending on the advertisement, Wrap Media uses various platforms to reach out, such as text messaging codes, product placement at rental venues and other ways of pushing out samples. In a Sheets vehicle, for example, renters will find the car stocked with samples as a “thank you” for renting. “We’re establishing the Sheets brand through outdoor advertising on cars that look pretty cool, and at the same time we provide samples and giveaways to the driver so hopefully they’ll adopt the brand,” Struhl says, adding that this allows the drivers to become “pseudo ambassadors” of Sheets. “It’s pretty engaging,” he says.
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CLOSING THE CUSTOMER/ASSOCIATE Through an industry survey, more than 600 customers and car rental associates share their perceptions of the car rental experience. Do your frontline team members’ views match what your customers are thinking? BY FRONTLINE PERFORMANCE GROUP
REASON FOR BRAND CHOICE CUSTOMER
E
arlier this quarter, Frontline Performance Group (FPG) — a Khoury Group Company — finished its first round of customer and associate impression surveys with the help of Auto Rental News. The results were presented in an FPG webinar hosted by Auto Rental News on Oct. 6. The field team from FPG conducted more than 600 surveys of customers and car rental associates. The surveys took place in more than 35 markets in the United States, Canada and Latin America. Customers and car rental associates were interviewed at airport counters, consolidated facilities, and local market and dealership settings. Survey questions and the interview process were designed so the final results would provide new insights on the importance of frontline associate belief, how to more effectively incorporate empathy into the rental process, how to stay consis-
8% 11% 5% 6%
10% 40% 15%
■ Brand Loyalty ■ Price
10%
ASSOCIATE 5% 5% 4% 19% 3% 17% 11%
■ Service Impression ■ Location ■ Rewards ■ Car Variety ■ Booking Ease ■ People - Staff
36%
AVERAGE NUMBER OF PRODUCTS OFFERED CUSTOMER 18%
ASSOCIATE
25%
18%
13% 26%
■0 ■1 ■2 ■3 ■ 4 OR MORE
30% 24%
21% 8% 17%
When it comes to brand choice, both customers and associates chose price as the top deciding factor. However, compared to the customer’s impression, associates overvalue the customer’s brand loyalty by 9 percentage points and underestimate the importance of booking ease for the customer by 6 percentage points. In a supporting statistic, 51 percent of customers say they do not have a preferred brand.
Associates believe they present more products (two or more, 71 percent) to customers than customers say they were actually offered (two or more, 62 percent). Some 25 percent of customers say they had zero products presented to them. Interestingly, 21 percent of associates admit to offering zero products.
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Customers identified the car class upsell as the most appealing product at 32 percent.While associates gave upsell a similar percentage (31 percent), they thought coverage (CDW, SLI, etc.) was their most appealing product offering at 41 percent. Customers chose GPS rental as their second most appealing product, while that was much further down the list for associates.
MOST APPEALING PRODUCTS CUSTOMER
ASSOCIATE
12%
32%
23%
16%
17%
■ UPSELL ■ COVERAGE ■ GPS ■ FUEL
12% 9%
7%
31%
41%
■ ADD’L DRIVER
WHICH PROVIDES BEST EXPERIENCE? Customers overwhelmingly believe their hotel stays offer the best experience. Associates value the car rental experience a mere percentage point higher.
tent with an established sales process and how an operation team can better understand how its customer feels about the industry.
Survey Highlights – Customers’ Perspective ● When asked, “What do you want from a car rental?” customers named vehicle quality (23 percent) as their No. 1 choice, followed by price/value (21 percent), speed (19 percent) and then customer service competence (16 percent). ● 53 percent of customers who have a bad experience will tell six or more associates, relatives or friends about the experience and company; however, for a good experience, only 28 percent of customers will tell six or more associates, relatives or friends. ■ Supporting statistic: According to the 2010 J.D. Power Car Rental Survey, 22 percent of problems go unreported by a customer. Reported problems for customers remain at 9 percent, with vehicle pick-up and billing being the areas with the highest rates of reported problems. ● More than 60 percent of customers have
CUSTOMER
ASSOCIATE
14% 63%
23%
■ AIRLINE ■ CAR ■ HOTEL
been awake for at least eight hours prior to arriving at your location’s counter. ● 68 percent of customers prefer to book the vehicle on their own. ■ Supporting statistic: Of customers’ preferred booking channels, 44 percent use an online travel provider, 43 percent use the car rental website, 9 percent call the rental call center and 4 percent walk in.
Survey Highlights – Associates’ Perspective ● Associates were asked to identify their motivational drivers when it comes to work: 44 percent of associates said money, 28 percent said recognition and 28 percent named accountability. ● Only 51 percent of associates monitor their sales performance on a daily basis. ● 37 percent of associates believe that customers wait in line prior to being called up to rent on an average of six to 10 minutes. ● 7-10 percent of the time associates claim that customers leave the counter upset. ● 10 percent of customers ask and request a nicer vehicle.
14% 64%
22%
● 76 percent of associates feel the daily rate charged per day is a fair price.
More Research Coming In 2012, Frontline Performance Group and Auto Rental News will continue to conduct surveys and customer experience research. The results will be presented with advanced sales management techniques throughout the 2012 Profit Boost Webinar Series. To continue learning more about how to boost front-counter profits and sales, stay tuned online at www.autorentalnews.com for more webinar announcements from FPG and Auto Rental News. Ken Stellon is a managing partner for the Frontline Performance Group – a Khoury Group company. Stellon and his team have been contributing to Auto Rental News since 1993. For specific questions regarding the research conducted and for further details regarding the Frontline Performance Group please contact Stellon at (630) 788-2879 or email him at kstellon@frontlinepg.com.
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GRADING THE COLLEGE CAMPUS MARKET Northcoast Research Partners’ report on adoption of car sharing at U.S. universities shows a yearly growth rate of 20-30 percent on a majority of campuses that start a program. BY JOHN HEALY
N
orthcoast Research Partners recently completed a quantitative survey and conversations with 35 college transportation directors and administrators regarding the adoption of car sharing on their college campuses. Based on Northcoast’s research, the college campus market remains a small but emerging market for car-sharing operators. This research finds that most college campuses that start a program see sizeable growth rates in car sharing usage, growing 20-30 percent on a year-over-year basis. Colleges and universities with car sharing already “fully deployed” for two to three years are experiencing total student body adoption rates of about 10-15 percent. Northcoast estimates that if all colleges and universities in the country deployed car sharing, the market size could evolve to $400 million to $1.65 billion in total revenues on the long term, assuming that membership fees and hourly usage rates remain consistent, and the penetration rate across the entire U.S. hovers around 5-20 percent. College campuses are looking at car sharing as an integral component of student life and campus parking/transportation strategies. The proliferation of car sharing on college campuses is a result of the following factors: schools looking to reduce the number of cars on campus, students looking to fill transportation needs, increased flexibility by members to “go as they please” and overall efforts to be “green.” Without question, car sharing is on its way to becoming mainstream in a number of top car-share markets and college campuses. In our opinion, 2011 and 2012 will stand as important years for the car-sharing market as we
THE POTENTIAL SIZE OF CAR-SHARING MARKET ON-CAMPUS APPROX. # OF U.S. COLLEGE STUDENTS: 19-20 MILLION PENETRATION RATE
CAR SHARING MEMBERS
MARKET POTENTIAL
5%
950,000
$413,250,000
10%
1,900,000
$826,500,000
15%
2,850,000
$1,239,750,000
20%
3,800,000
$1,653,000,000
The chart at left is an estimated outlook of what the market share would look like if penetration rates continue to rise with members utilizing the service at 40 hours per year with a $35 annual fee and $10-per-hour rental fee. With an approximate U.S. student population of 19-20 million, according to the National Center for Education Statistics, Northcoast estimates that if about 20 percent of students used the program at these same rates and fees, the industry could boast a market size upwards of $1.6 billion. SOURCE: NORTHCOAST RESEARCH
CAR-SHARING EXPECTATIONS FOR GROWTH NUMBER OF SCHOOLS
PERCENTAGE OF OUR SURVEY
HIGH
9
26%
MODERATE
22
63%
LOW
4
11%
TOTAL
35
begin to learn more about consumer adoption and get a better view of competitors. Here are Northcoast’s key takeaways from our conversations with transportation directors: ● Universities appreciate the car-sharing model as it “cuts down” on the need for students to bring vehicles to school; it reduces issues with congestion and lack of parking — two issues that many schools encounter. ● Colleges and universities are marketing car-sharing offerings as a way to differentiate themselves to rival schools and also as a
Schools expect the growth of members and fleet to approximate 20-30 percent in the near-future as offerings become better known and embraced by students. SOURCE: NORTHCOAST RESEARCH
way “to promote environmental friendliness campaigns.” ● Schools with programs expect the growth of members and fleet will approximate 20-30 percent in the near future as the offerings become better known and embraced by students. ● Schools typically see car-sharing utilization rates highest on the weekends and lowest during the midweek — similar to car-sharing use in urban settings. ● The biggest complaint is in regards to vehicle shortages primarily on the weekend. ● Car-sharing gives way to additional in-
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CAR-SHARE MARKETING Our research suggests that colleges and universities are deploying additional marketing campaigns in an effort to increase the use of car sharing on campus. The following are methods used by colleges and universities to market car sharing: ● Marketing campaigns during freshmen orientation programs.
ASSESSING THE CAR-SHARING MARKET AVERAGE
LOW
HIGH
PENETRATION RATE
5.42%
0.62%
22.86%
UTILIZATION RATE
37%
25%
75%
RATIO OF STUDENT MEMBERS PER CAR
176
43
1,000
8
2
39
# OF CARS
The 35 transportation directors and administrators that took the survey estimate an overall student body usage rate of about 5 percent on average, with the highest going up to almost 23 percent. The higher percentages correlated with the length of the program, with the longest-running programs reporting the highest amount of members. Almost half of respondents also reported that car sharing is becoming a more “mainstream” idea on campus. ● Regularly available marketing materials on campus. ● Monthly email campaigns to student bodies. ● On-campus car-sharing representatives during program launch. ● Campus signage (e.g. flyers, banners, and bus shelters). While the competitive environment will likely get more crowded in time, increased attention from viable competitors has yet to have any meaningful impact on the near-term results of Zipcar, for example, the largest on-
SOURCE: NORTHCOAST RESEARCH
novation as “second generation” car-sharing initiatives begin to emerge, such as ride sharing and community vehicle programs. ● Two-way texting and use of mobile apps are popular and give students the ability to reserve vehicles on the go. ● Applications created by operators like Zimride, a carpooling/brokering community, provide for a “car-light” operating environment. ● There is an element of rising competition on college campuses as rental car companies begin to explore the market. ● Some transportation directors feel the future could bring multiple drop-off and pick-up locations for cars for better accessibility.
campus car-sharing provider and largest carsharing company in the U.S. The market as a whole remains fairly small at this time, but Northcoast believes the growth opportunity associated with cars on college campuses remains significant. John Healy, a research analyst with Northcoast Research Partners, covers the car rental sector within his Business Services area of focus. Northcoast Research Partners is an institutional equity research firm that specializes in car rental, among many other industries.
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©2010 Dollar Rent A Car, Inc. All rights reserved. 5310 East 31st Street, PO Box 35250, Tulsa, OK 74135. Phone 918.665.3930. Dollar features a wide selection of quality vehicles. This advertisement is not an offering. An offering can be made by a prospectus filed with the Department of Law of the State of New York. This information is in no way intended to encourage the breach of any contractual obligations you may have. MN REG. No. F-2447.REP. NO. F-1308
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C A R
R E N T A L
Q & A motivated by recognition are most effective if presented in the second interview stage. 3. Beware of too much frontline experience: “Journeymen” sales associates who approach you for employment may bring more baggage and questionable sales techniques than value. Ask these candidates to role play the rental process, check for their dialogues and see if they have been through any professional service-based sales training. Having a defined service-based sales training process will allow you and your recruitment team to think outside the box and look for candidates with very diverse non-car rental experience.
chasing decision somewhere else. Applying these techniques and having a relationship-focused approach with your frontline team will improve your team’s rental productivity and enhance your customer’s experience.
Q&A Q
Q
It seems as if we are getting blessed with a wide variety of candidates for car rental frontline positions.What are some items we should consider while going through the selection process? Jeff T. - Independent Car Rental, South Florida
A
Now is the time to find the best talent for your operation. Good candidates are out there and are coming our way because of the spike in unemployment. As well, people are in search of a quality company in an established industry; it is about time our industry caught at least one break! Keeping these items in mind will help you and your team in the selection process: 1. Define your unique recruitment proposition: Knowing why your organization is a great organization to join and defining the main advantages of career development, compensation structure and personal growth, are just as important as knowing when and who to hire. 2. Look for candidates with the SEE Factor: Three key attributes that all candidates for a service-based sale role should have are sincerity, empathy and ego. These traits can easily be determined through an interview process. Sincere candidates build relationships and demonstrate them; empathetic candidates understand people and can build rapport very quickly; and egodriven candidates want to be recognized for results and held accountable. These attributes can be found when they are presented with behavioral-based interview questions. Open-ended questions that allow the candidate to expand on their experiences of being sincere, empathetic or
Q
How do we change our incentive plan to prevent sales associates from profiling customers? Mike K. - Airport Rental Operations, Western Canada
A
The good news is that you do not have to do anything to your incentive plan. Don’t change it. It is not the role of the incentive plan to hold sales associates accountable; it is the role of the manager. The bad news is that many managers do a poor job of holding associates accountable for these poor and unprofessional sales practices. Following these techniques will greatly reduce these troubling behaviors: ● When the cat is away the mice will play: It is critical that your management team establishes its presence on the counter during peak rental hours. Managers should ensure that rentals are being equally processed by every associate. ● Set fair and obtainable stretch targets: If incentive targets are set unrealistically it will create an unfair expectation for your team members and their internal motivators will get the best of them. If no one in the location is receiving a payout, there is a problem. ● Go inside the numbers: Removing subjectivity and hearsay from the scenario will greatly enhance the manager’s ability to hold the staff accountable. Review individual associate length of rents, average rentals by hour worked and incentive earning per agreement. Calibrate all these trends versus the location’s team average. ● Play devil’s advocate: Ask your associates if they have ever been pre-judged or treated differently when they made a pur-
How can we harness social media to enhance our business? Elizabeth S. - B.E.A.P. Car Rental, Orlando, Fla.
A
Utilizing Facebook, LinkedIn and halfoff daily deal sites are great ways to promote your business and keep track of repeat customers. Utilizing the following marketing methods will help your business grow: ● Ambassador’s Club: Have repeat customers sign your location’s Facebook wall with a positive comment about the experience. After five positive postings, provide the customer with a 10 percent discount on their next rental. ● Unique recruitment message: Utilize Facebook and LinkedIn to post great professional opportunities. You can only enhance your business if you attract top talent. ● Post daily deals: Use Facebook, Craigslist, LivingSocial and other online communities to run promotions, market weekend specials and communicate availability. ● Send a team “Thank You”: Sending an electronic “thank you” to your repeat customer on behalf of your entire team leaves one last great impression and communicates your ability to be focused on the relationship with the client.
• Email your car rental operationrelated questions to Auto Rental News care of chris.brown@bobit.com. • Consultants from the Frontline Performance Group/Khoury Group will come up with concise, insightful answers to help you better run your car rental operation. Feel free to contact them directly at questions@thekhourygroup.com.
A KHOURY GROUP COMPANY Y
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Proudly Serving the Southeast United States!
STATEMENT OF OWNERSHIP, MANAGEMENT AND CIRCULATION
Growing, Nationwide Company Please fax this proof back by ______________ on_________________________. Corporate If not received by the above date, theLooking ad will run as for is. Thank You! Level Positions URGENT ADVERTISING PROOF (Required by 39 U.S.C. 3685)
PUBLICATION TITLE Auto Rental News
ISSUE FREQUENCY Bi-monthly, additional February & December
PUBLICATION NO. 1075-9409
FILING DATE 10/01/2011
NO. OF ISSUES PUBLISHED ANNUALLY 8
ANNUAL SUBSCRIPTION PRICE $25 per year
COMPLETE MAILING ADDRESS OF KNOWN OFFICE OF PUBLICATION Bobit Business Media, 3520 Challenger Street, Torrance, CA 90503-1640, Los Angeles County COMPLETE MAILING ADDRESS OF PUBLISHER’S HEADQUARTER’S Bobit Business Media, 3520 Challenger Street, Torrance, CA 90503-1640, Los Angeles County
FULL NAMES AND COMPLETE MAILING ADDRESSES OF PUBLISHER, EDITOR, AND MANAGING EDITOR PUBLISHER: Sherb Brown, Bobit Business Media, 3520 Challenger Street, Torrance, CA 90503-1640, Los Angeles County EDITOR: Chris Brown, Bobit Business Media, 3520 Challenger Street, Torrance, CA 90503-1640, Los Angeles County MANAGING EDITOR: Chris Brown, Bobit Business Media, 3520 Challenger Street, Torrance, CA 90503-1640, Los Angeles County OWNER Ty F. Bobit, CEO
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KNOWN BONDHOLDERS, MORTGAGEES, AND OTHER SECURITY HOLDERS OWNING OR HOLDING 1 PERCENT OR MORE OF TOTAL AMOUNT OF BONDS, MORTGAGES, OR OTHER SECURITIES None ISSUE DATE FOR CIRCULATION DATA BELOW July/August 2011 AVERAGE NO. COPIES EACH ISSUE DURING LAST 12 MONTHS
EXTENT AND NATURE OF CIRCULATION 15a TOTAL NO. COPIES (NET PRESS RUN)
ACTUAL NO. COPIES OF RECENT SINGLE ISSUE
10,071
9,998
15b PAID/REQUESTED CIRCULATION 15b.1 OUTSIDE COUNTY PAID/REQUESTED MAIL SUBSCRIPTIONS 15b.2 IN-COUNTY PAID/REQUESTED MAIL SUBSCRIPTION 15b.3 SALES THROUGH DEALERS/CARRIERS 15b.4 REQUESTED COPIES USPS OTHER MAIL CLASSES 15c TOTAL PAID/REQUESTED CIRCULATION
6,227 2 6,230
5,907 3 5,901
15d NONREQUESTED CIRCULATION 15d.1 OUTSIDE COUNTY NONREQUESTED COPIES 15d.2 IN-COUNTY NONREQUESTED COPIES 15d.3 NONREQUESTED DISTRIBUTED BY OTHER CLASS OF MAIL 15d.4 NONREQUESTED OUTSIDE USPS 15e TOTAL NONREQUESTED DISTRIBUTION
3,133 297 3,430
15f TOTAL DISTRIBUTION 15g COPIES NOT DISTRIBUTED 15h TOTAL 15i PERCENT PAID/REQUESTED CIRCULATION
9,660 412 10,071 64.5%
IMMEDIATE OPENINGS • National Incremental Sales & Training Manager • National Sales Manager
(Convention, Government) FURTHER CUSTOMER CHANGES ON THISBusiness, PROOF ARE CHARGEABLE. 3,433 232 3,686
9,587 411 9,998 61.6%
• City ManagerCHECK (Nationwide Openings) • AUTHORIZATION LIST •
This Statement of Ownership will be printed in the November/December 2011 issue of this publication. I CERTIFY THAT ALL INFORMATION FURNISHED ON THIS FORM IS TRUE AND COMPLETE. I UNDERSTAND THAT ANYONE WHO FURNISHES FALSE OR MISLEADING INFORMATION ON THIS FORM OR WHO OMITS MATERIAL OR INFORMATION REQUESTED ON THE FORM MAY BE SUBJECT TO CRIMINAL SANCTIONS (INCLUDING FINES AND IMPRISONMENT) AND/OR CIVIL SANCTIONS (INCLUDING MULTIPLE DAMAGES AND CIVIL PENALITES).
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BOBIT BUSINESS MEDIA • 3520 CHALLENGER ST., TORRANCE, CA 90503 • 310-533-2400 • FAX 310-533-2501 NOVEMBER / DECEMBER 2011 • ARN 27
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products & vendor news Bluebird Holds Users Conference Customers of Bluebird Auto Rental Systems gathered in Atlantic City to attend the biennial Users Conference at Caesar’s Resort. The hands-on event spanned over two days and placed a large focus on Bluebird’s technological developments. Owners and Bluebird management delivered presentations and attendees participated in “speed networking” sessions, group discussions and roundtable breakouts on topics ranging from business process management to social media. Gil Cygler, owner of All Car Rent-A-Car in the state of New York, said one of the perks of attending the conference is getting to speak with Bluebird staff first-hand. “I personally benefit just from hearing the different insights and interacting with the Bluebird staff,” Cygler said, adding that users are able to bring up any recurring issues and discuss solutions with the staff. The mini trade show showcased existing and potential products that can interface with RentWorks, Bluebird’s software for car rental companies. Customers were also given an opportu-
nity to learn more about and give input on new features and products. Sharon Faulkner, executive director of the American Car Rental Association, delivered a talk on the importance of a national association for all car rental operators. She also sat in on a roundtable. “The innovations and improvements in the software today are amazing,” Faulkner said. “And the way the car rental operators are coming up with ideas and solutions to their marketing concerns with the Bluebird software was impressive.” Faulkner admits that she never attended the conference while she was working as a Dollar/Thrifty licensee. “I found out that I should have practiced what I have always preached: Find the time in your daily grind to go to conferences and shows where you can, hands on, learn more about your chosen profession and then take that knowledge back to work with you and watch the results,” she said.
This mini trade show featured potential products that can Element Payment Services, a fully integrated payment compliance interface with RentWorks, Bluebird’s software for car rental processing solutions company, gave a presentation at the conference. Element allows its customers to reduce the risk associated with handling companies. cardholder information.
CarTrawler Opens Source for iPhone App CarTrawler, a provider of car rental distribution systems to the travel industry worldwide, has released the source code to their car rental app for the iPhone. Travel businesses will be able to customize the app and re-release it as their own product on the App Store. The CarTrawler car rental app offers the user mobile access to the largest selection of car rental from more than 550 major and independent car rental suppliers in 175 countries, 30,000 city and airport locations, and 30 languages — quoting in multiple currencies. Special features
include GPS mapping and international call support. By releasing the app source code free of charge, partners can integrate a “ready-to-go” car rental facility, saving themselves the cost and time required to develop their own app. “The release of our car rental app source code will enable companies to maximize ancillary revenues by meeting that demand with a fully integrated system from a trusted source,” said Bobby Healy, CTO, CarTrawler, in a prepared statement. “Our mobile platform con-
nects you with the same technology that we supply to some of the biggest airlines, hotel groups and travel service providers in the world. Instead of investing time and money creating your own app, you can now take what we do best, enabling you to concentrate on what you do best.” Go to www.cartrawler.com/downloads for information on how to customize the app and re-release it as your own product on the App Store.
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MONDAY, MARCH 12, 2012 TUESDAY, MARCH 13, 2012 If you think this year’s conference was great, wait until next year! We’re keeping the momentum going with an even more compelling agenda. Network with your peers, visit the exhibit hall, update your skills, sharpen your expertise and learn strategies to further maximize profits at the 2012 Car Rental Show, taking place March 12-13 at the Las Vegas Hilton.
HEADQUARTERS HOTEL Las Vegas Hilton Hotell 3000 Paradise Road Las Vegas, NV 89109 Reduced room rates have been secured exclusively for CRS attendees. Reserve your room today to get your special rate! Rates: $109 (Classic Room) $119 (Premium Room) $159 (Resorts Club) Phone: 800-635-7711 Make sure to reference the Car Rental Show when reserving. Expires February 19, 2012 or until room block is sold out.
Media Sponsor Produced by Bobit Business Media
CONFERENCE AGENDA TO BE ANNOUNCED BY THE END OF THE YEAR. For More Information Visit www.CarRentalShow.com or Call 800-576-8788 CRS10-11.11
ARN1111products.indd 29 ARN1111crs.indd 1
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$17,000
$20,000 $17,000
■ INTERMEDIATE-SIZED CAR ■ FULL-SIZE LIGHT-DUTY TRUCKS ■ MINIVANS ■ CROSSOVERS
AVERAGE SEGMENT VALUE
$18,000 AVERAGE SEGMENT VALUE
$16,000 $15,000 $14,000 $13,000 $12,000
$13,000 $10,000 $7,000
MODEL
SOUTH EAST
AUDI A4 2010 4D SDN QUATTRO 2.0T 28,900 2009 4D SDN QUATTRO 3.2L 26,250 BUICK LACROSSE 2010 CXL 4D SEDAN 22,500 2009 CXL 4D SEDAN 14,800 BMW 3-SERIES 2010 328I 4D SEDAN 25,400 2009 328I 4D SEDAN 21,300 CHEVROLET SILVERADO 1500 2010 LT EXT CAB 17,200 2009 LT EXT CAB 16,300 CHEVROLET COBALT 2010 LS 4D SEDAN 9,800 2009 LS 4D SEDAN 7,950 CHEVROLET COLORADO 2010 LT CREW CAB Z85 17,250 2009 LT CREW CAB Z85 16,100 CHEVROLET EQUINOX 2010 LT 4D UTILITY AWD 21,075 2009 LT 4D UTILITY AWD 16,925 CHEVROLET HHR 2010 LT 4D UTILITY 12,200 2009 LT 4D UTILITY 11,200 CHEVROLET IMPALA 2010 LS 4D SEDAN 12,550 2009 LS 4D SEDAN 10,850 CHEVROLET MALIBU 2010 LS 4D SEDAN 4-CYL. 12,250 2009 LS 4D SEDAN 4-CYL. 10,600 CHRYSLER 300 2010 TOURING 4D SEDAN 14,700 2009 LX 4D SEDAN 12,700 FORD CROWN VICTORIA 2010 LX 4D SEDAN 14,100 2009 LX 4D SEDAN 12,900 FORD EDGE 2010 SE 4D UTILITY 17,350 2009 SE 4D UTILITY 15,400 FORD EXPLORER 2010 XLT 4D UTILITY 4WD 19,175 2009 XLT 4D UTILITY 4WD 15,925 FORD F-150 2010 XLT SUPERCAB 18,050 2009 XLT SUPERCAB 16,600 FORD FOCUS 2010 SE 4D SEDAN 11,800 2009 SE 4D SEDAN 10,400
$5,000
OCT. 11
SEPT. 11
JULY 11
AUG. 11
MAY 11
JUNE 11
APR. 11
MAR. 11
JAN.11
FEB. 11
DEC. 10
OCT. 10
$10,000
HISTORICAL BLACK BOOK TRENDS - FLEET VEHICLES ■ INTERMEDIATE-SIZED CAR ■ FULL-SIZE LIGHT-DUTY TRUCKS ■ MINIVANS ■ CROSSOVERS
$15,000
$11,000 NOV. 10
used car prices
MONTH-BY-MONTH BLACK BOOK TRENDS BY MAPPED SEGMENTS - FLEET VEHICLES
$20,000
NORTH MID WEST EAST WEST CENTRAL COAST 28,700 26,050
28,850 26,200
28,800 26,150
29,000 26,350
22,300 14,600
22,463 14,763
22,425 14,725
22,600 14,900
25,200 21,100
25,350 21,250
25,300 21,200
25,500 21,400
17,200 16,300
17,200 16,300
17,200 16,300
17,200 16,300
9,750 7,900
9,775 7,925
9,750 7,900
9,875 8,025
17,250 16,100
17,250 16,100
17,250 16,100
17,250 16,100
20,925 16,775
21,013 16,863
20,950 16,800
21,225 17,075
12,100 11,100
12,163 11,163
12,125 11,125
12,300 11,300
12,350 10,650
12,513 10,813
12,475 10,775
12,650 10,950
12,100 10,450
12,225 10,575
12,200 10,550
12,325 10,675
14,400 12,400
14,650 12,650
14,600 12,600
14,850 12,850
13,850 12,650
14,063 12,863
14,025 12,825
14,200 13,000
17,100 15,150
17,275 15,325
17,200 15,250
17,500 15,550
18,875 15,625
19,075 15,825
18,975 15,725
19,175 15,925
18,050 16,600
18,050 16,600
18,050 16,600
18,050 16,600
11,700 10,300
11,775 10,375
11,750 10,350
11,875 10,475
MODEL
10/1/10
SOUTH EAST
FORD FUSION 2010 SE 4D SEDAN 2009 SE 4D SEDAN 4-CYL. FORD RANGER 2010 XLT SUPERCAB 2009 XLT SUPERCAB FORD TAURUS 2010 SEL 4D SEDAN 2009 SEL 4D SEDAN JEEP PATRIOT 2010 SPORT 4D UTILITY 4WD 2009 SPORT 4D UTILITY 4WD LINCOLN TOWN CAR 2010 SIGNATURE LTD 4D SDN 2009 SIGNATURE LTD 4D SDN MERCEDES-BENZ S-CLASS 2010 S550 4D SEDAN 2009 S550 4D SEDAN NISSAN ALTIMA 2010 4D SEDAN 2009 4D SEDAN NISSAN VERSA 2010 4D SEDAN 2009 4D SEDAN RAM 1500 2010 SLT QUAD CAB 2009 SLT QUAD CAB SUBARU OUTBACK 2010 LTD 4D WAGON 2009 LTD 4D WAGON TOYOTA CAMRY 2010 LE 4D SEDAN 2009 LE 4D SEDAN TOYOTA COROLLA 2010 4D SEDAN 2009 4D SEDAN TOYOTA PRIUS 2010 4D HATCHBACK 2009 4D HATCHBACK TOYOTA TACOMA 2010 PRERUNNER SR5 DBLCAB 2009 PRERUNNER SR5 DBLCAB VOLKSWAGEN JETTA 2010 S 4D SEDAN 2009 S 4D SEDAN VOLVO S40 2010 4D SEDAN 2.4I 2009 4D SEDAN 2.4I
10/1/11
PROJ. 10/12
NORTH MID WEST EAST WEST CENTRAL COAST
14,400 12,550
14,350 12,500
14,375 12,525
14,350 12,500
14,500 12,650
14,275 13,000
14,275 13,000
14,275 13,000
14,275 13,000
14,275 13,000
21,100 12,750
20,900 12,550
21,063 12,713
21,025 12,675
21,200 12,850
15,025 13,125
14,775 12,875
14,963 13,063
14,900 13,000
15,125 13,225
24,150 19,600
23,750 19,200
24,075 19,525
24,000 19,450
24,350 19,800
69,800 57,200
69,450 56,850
69,925 57,325
70,050 57,450
69,550 56,950
13,800 12,600
13,700 12,500
13,775 12,575
13,750 12,550
13,850 12,650
10,750 9,450
10,650 9,350
10,725 9,425
10,700 9,400
10,800 9,500
17,200 16,150
17,200 16,150
17,200 16,150
17,200 16,150
17,200 16,150
23,000 19,400
23,150 19,550
22,975 19,375
22,950 19,350
22,800 19,200
14,250 12,900
13,950 12,600
14,213 12,863
14,175 12,825
14,050 12,700
11,200 9,800
11,000 9,600
11,175 9,775
11,150 9,750
11,300 9,900
18,200 15,800
18,000 15,600
18,163 15,763
18,125 15,725
18,700 16,300
23,025 21,075
23,025 21,075
23,025 21,075
23,025 21,075
23,025 21,075
12,900 11,500
12,600 11,200
12,875 11,475
12,850 11,450
12,950 11,550
16,700 14,100
16,700 14,100
16,600 14,000
16,500 13,900
16,900 14,300
The above values are provided by Black Book, and reflect pricing as of Sept. 27, 2011. Black Book’s used-vehicle values are updated on a daily basis, and reflect wholesale values gathered from auctions around the country via onsite personnel and data feeds. Visit www.BlackBookUSA.com.
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ad index COMPANY
PHONE
®
www.autorentalnews.com
WEBSITE
PAGE
Abrams Consulting Group ..............914-696-5100 ...................abramsconsulting.com.............. 13
Bluebird Auto Rental Systems ........800-304-5805 ...................barsnet.com .................................. 9
Courtney Leasing, Inc.......................407-438-0083 ...................courtneyleasing.com ................. 27
Vice President & Group Publisher Sherb Brown — (310) 533-2451 Executive Editor Chris Brown — (310) 533-2499 chris.brown@bobit.com Assistant Editor Joanne M.Tucker — (310) 533-2490 joanne.tucker@bobit.com Web Editor Greg Basich — (310) 533-2572 greg.basich@bobit.com
Car Rental Show 2012 .....................800-576-8788 ...................CarRentalShow.com................. 29 Art Director Armie Bautista
Dollar Rent A Car.............................800-555-9893 ...................dollar.com ................................... 25
Production Manager Brian Peach — (310) 533-2548
GMAC Smart Auction .....................877-428-9882 ...................aboutsmartauction.com .......... C4
Subscription Inquiries (888) 239-2455
GMI Insurance Services ...................800-722-3229 ...................GMI-Insurance.com .................. 11
Chairman Edward J. Bobit
Lancer Insurance ...............................800-782-8902 x3027 .......lancerinsurance.com ................ C3
President & CEO Ty F. Bobit Chief Financial Officer Richard E. Johnson
PurCo Fleet Services, Inc. ...............888-PURCO 88 ................purco.com................................... 23
Editorial Consultant Howard Rauch
Sonoran National Insurance ...........866-998-1001 ...................sonorannational.com .................. 3
ADVERTISING MANAGERS
TML Information Services, Inc. ......800-743-7891 ...................TML.com ..................................... 21
Associate Publisher Joni Owens joni.owens@bobit.com (310) 533-2530 Fax: (310) 533-2503
Toyota ................................................800-732-2798 ...................fleet.toyota.com .......................... 5
TSD Rental Management Software ..............................................800-743-1200 ...................tsdweb.com ........................... C2-1
Great Lakes Robert J. Brown 1000 W. University Dr. Ste. 209 Rochester, MI 48307 (248) 601-2005 Fax: (248) 601-2004 Printed in the USA
U-Save Auto Rental ..........................800-438-2300 x146 .........usave.com ................................... 21
WTP Advisors ...................................914-733-7715 ...................wtpadvisors.com ....................... 17
All statements made, although based on information believed to be reliable and accurate, cannot be guaranteed and no fault or liability can be accepted for error or omission. acra
The Advertisers’ Index is provided as a courtesy to Auto Rental News advertisers. The publisher assumes no responsibility for errors or omissions.
NOVEMBER / DECEMBER 2011 • ARN
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rent ALERT
FOR UPDATES,VISIT WWW.AUTORENTALNEWS.COM
Dollar Thrifty Backs Away from Merger After the company didn’t receive any offers that its board could approve, Dollar Thrifty says it will continue to execute its current stand-alone plan. Then is a Hertz deal dead? BY JOANNE TUCKER
D
ollar Thrifty Automotive Group Inc. announced Oct. 11 that it formally concluded its process to solicit definitive proposals for a potential business merger. In an Aug. 21 letter, the rental agency had asked both Avis Budget Group and Hertz Corporation to submit their “best and final offers” by Oct. 10. In its letter, Dollar Thrifty stated that any proposal not eliminating the antitrust regulatory risk of the transaction for its shareholders wouldn’t be acceptable. And as of Oct. 10, the company had not received any proposals meeting this criterion. Avis Budget pulled its proposal on Sept. 14 on the heels of its purchase of Avis Europe. As a consequence, Dollar Thrifty terminated its solicitation process and will continue on its current stand-alone plan. “The purpose of setting a deadline for submission of bids was to bring clarity to the next steps for the company,” said Scott L. Thompson, president and CEO. “As we said all along, continuing uncertainty is in no one’s interest. “While Hertz’s May 2011 exchange offer remains outstanding and on Oct. 7 Hertz’s CEO called me personally to reaffirm their commitment to pursuing the acquisition of Dollar Thrifty, the fact remains that they have not made a proposal that addresses our board’s requirements. Having received no acceptable offer after conducting an unprecedentedly open process with clearly articulated requirements, it is time for us to move forward on a stand-alone basis.” Thompson added, “It is also important to emphasize that Dollar Thrifty is well positioned for these uncertain times, as rental car customers become even more value-focused. Our long established value brands combined with our low operating cost and solid balance sheet are serving us well. We are on track for another record year.” After taking itself off the market, Dollar Thrifty, which reported a $131.2 million net income for 2010, will commence a share repurchase plan. Under the terms of the program, the company’s board of directors has authorized the repurchase of up to $400 million of Dollar Thrifty stock. The company stated that it expects to complete share re-
purchases of up to $100 million per quarter over the course of the next four quarters.
Hertz Still Interested When Avis Budget pulled out, its offer stood at $45.79 in cash and 0.6543 shares of common stock per Dollar Thrifty share, or an aggregated and approximate $1.5 billion based on stock prices at the time. Back in May, Hertz had made what it called a “final” exchange offer. Hertz’s last offer was for $57.60 in cash for the outstanding shares and 0.8546 shares of Hertz common stock. In response, Dollar Thrifty advised its shareholders to not take any action on the offerings. “We will be monitoring the antitrust regulatory process and other circumstances carefully, and our board will reconsider its recommendation if the situation warrants,” Thompson said. The Hertz offer was supposed to expire on Sept. 9, but the rental company then extended the deadline to Nov. 1. Coinciding with Dollar Thrifty’s Oct. 11 announcement, Hertz spokesperson Rich Broome stated that “Hertz remains interested” and that it is continuing to pursue merger approval from the U.S. Federal Trade Commission (FTC). “That’s the first step in the process,” he said. Apparently, the FTC approval process continues. The question remains, however, as to what divestitures the FTC will request of Hertz to bless the merger. Though it withdrew its offer, Avis Budget believed it could obtain anti-trust approval. “We have made significant progress toward obtaining U.S. regulatory clearance for the acquisition of DTG (Dollar Thrifty), and we believe that such regulatory clearance could be obtained,” stated Avis Budget in its regulatory filing. The FTC has been looking mainly at airport market share, though it is also widely believed that Hertz will have to sell Advantage, its discount brand acquired in 2009. As opposed to simply selling off the pieces of Advantage, the FTC may be vetting a viable suitor for Advantage to ensure the brand remains competitive, which could now be one roadblock against a deal.
32 ARN • NOVEMBER / DECEMBER 2011
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