A Hertz customer walks toward the rental counter after returning his car on Friday, May 3, 2013, at Southwest Florida International Airport. / AMANDA INSCORE/THE NEWS-PRESS
This is the Hertz rental car holding area at Southwest Florida International Airport. The Hertz Corp. is relocating its headquarters to Estero. / Andrew West/The News-Press
Hertz’s move to Lee County follows a flurry of rental car industry consolidations over the past several years.
Hertz drove the last big merger with its $2.3-billion takeover of rival Dollar Thrifty last November.
“There’s been a lot of action,” said Neil Abrams, a Purchase, N.Y.-based consultant who follows the car rental industry.
“Right now, three companies control about 95 percent-plus of a $23-billion industry,” Abrams said.
The Big Three brand families are: Enterprise Holdings (Enterprise, Alamo, National); Hertz Global Holdings (Hertz, Dollar Rent A Car, Thrifty Car Rental); and Avis Budget Group (Avis, Budget).
At airports, you’ll still see a colorful array of brands, although not as many as before. Each brand targets different kinds of drivers through service, amenities and prices.
For example, Hertz, Avis and National comprise the top tier, and cater to big corporate travel accounts. Mid-tier Budget and Alamo “appeal to leisure travelers who don’t need the corporate bells and whistles, but require certain amenities and service,” Abrams said.
Auto rentals are big business and growing.
According to Auto Rental News:
• The U.S. car rental industry generated record revenues in 2012 that topped $23.6 billion, for nearly a 4 percent increase year-over-year.
• Hertz ranked second to Enterprise Holdings, with nearly $4.6 billion in total revenues versus $15.4 billion.
Speaking exclusively with The News-Press Monday, Hertz CEO Mark P. Frissora said Florida was a natural choice for the headquarters because of its stature in the travel market.
How Southwest Florida specifically got the nod: “Because there aren’t an abundance of headquarters in the Fort Myers area ... people were open and flexible to working with us, Frissora said:
“We like that it’s a well-established travel destination. It has a lot of growth potential.”
Southwest Florida already is a key player in car rentals.
Proprietary information shared by the Abrams Consulting Group shows that in 2012, Southwest Florida International Airport ranked 17th in its list of the top 50 airports for car rental business, generating revenues of about $187 million that year.
Airport leaders pegged gross sales for their fiscal year that ended Sept. 30 at about $166.6 million. At Southwest Florida International, the Hertz brand commanded the biggest market share (22.37 percent), followed by Alamo (14.66 percent) and Enterprise (13.55 percent).
Hertz, a favorite of many business travelers, ranked fourth nationally in J.D. Power and Associates’ most-recent customer satisfaction survey.
Enterprise Holding’s three rental car brands — Enterprise, National and Alamo — swept the top three spots in the annual survey, whose findings were released last November.
Service and price are the two principal ingredients for customer choices, according to Abrams.
Looking ahead, Abrams said companies “recognize they need to expand their business model” to stay competitive.
More than two years ago, Hertz acquired the Donlen Corp., specializing in long-term car, truck and equipment leasing.
Car sharing is another emerging trend. This is where rental companies “spread out” their inventories around a city, a college campus or an office complex.
Abrams defines car sharing as a membership-based, fully automated platform where individuals and businesses have access to vehicles 24/7 through the use of the Internet and wireless and GPS technology. This enables people to rent a car on an as-need basis, paying only for the time and mileage they reserve.
At its annual Investor Day in early April, Hertz leaders said it would aggressively pursue car-sharing customers.
“The cars we rent — everything we do — will speak to speed,” Frissora said.