How is Europe affecting the rental car business?
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How is Europe affecting the rental car business?
Steve Chiotakis: Online travel website Orbitz says Los Angeles International, therwise known as LAX, will be the busiest airport in the country over the Thanksgiving holiday. A lot of those folks coming or going will be renting cars. And while the holidays are looking good here at home, the rental car business is also having to deal with fallout from the European debt crisis. Mark Frissora is CEO of rental car company Hertz. And he’s with us now from the road. Welcome to Marketplace.
Mark Frissora: How are you?
Chiotakis: I’m doing well. I know holiday travel is set to kick off in a big way. Thanksgiving is coming up in a week and a half. What are y’all expecting as far as business goes?
Frissora: Well as we look at advance reservations for both Thanksgiving weekend as well as going forward over the end-of-the-year holiday season, we’re seeing double digit advance reservation rates. So things look pretty healthy right now.
Chiotakis: You rent cars all over Europe as well, and there’s just a lot going on there. Has that affected your bottom line here in the U.S.?
Frissora: Yeah it does. Europe probably represents about 20 percent of our profits overall as a company. And when you look at Europe, sales were up 15-20 percent into the second quarter, and then after the entire sovereign debt crisis started to unfold there, levels went down to more like single-digit growth numbers. So we’re either flat or up 2-3 percent in Europe right now. So it’s definitely softened significantly over the last four to five months.
Chiotakis: I know that there’s been a lot of uncertainty because of what’s going on in Europe and because of even what’s happening here in this country because of a lot of debt and political wrangling that’s going on in Washington. How has that played into the business decisions you guys make, like say hiring?
Frissora: Well we’re still hiring a lot of people. We’ve got about 1,000 job openings right now. We hired about 6,000 people in the U.S. this year compared to 1,100 people last year. So we’re continuing to expand in new locations we have around here. We’ve opened up about almost 300 net new locations thsi year in the United States. We’ve been growing primarily in the off-airport market, as well as in in our car sharing company called Hertz On Demand. In any event, we’re growing and feeling good about it.
Chiotakis: You’re growing and you’re shopping, too. I know you were thinking about Dollar Thrifty and then you dropped your bid. What was that all about?
Frissora: So the big issue is antitrust and getting clearance. So we’ve been working on that since really May-June time period. And feel good about our bill base to work with the FTC and get resolution, and once we have that we’ll continue to pursue Dollar Thrifty.
Chiotakis: Mark Frissora, CEO of Hertz, thank you so much.
Frissora: Thank you, bye.
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