Corporate business volumes at Avis Budget Group grew in the
third quarter, though the company is seeing little movement on rates for its
largest customers.
President and CEO Larry De Shon said volumes on corporate
business in the United States have been improving for "a number of
months" and that corporate volume in Europe, the Middle East and Africa
was "extremely strong" in the quarter, up 10 points. Overall, rental
days in midmarket and small business accounts were up 9 percent year over year
in the quarter, he said.
"Now, we just have to work on rate, which continues to
be under pressure," De Shon said. "The midmarket and large commercial
accounts continue to be extremely competitive when those get renewed. I'm
hoping at some point we can turn the corner on pricing with those
contracts."
Pricing for small business accounts tends to follow leisure
trends, which should be moving upward as fleet tighten, he said.
During the third quarter, total rental days in the Americas
were up 3 percent year over year as revenue per day, excluding exchange rate
effects, declined 2 percent. Outside of the Americas, rental days were down 1
percent year over year and revenue per day, excluding exchange rate effects,
was flat. Total third quarter revenues were $2.8 billion, up 1 percent year
over year excluding exchange rates.
De Shon noted the company has seen a growth in the purchase
of such ancillary products as Sirius XMradio and upgrades on the corporate side
thanks to a new bill-splitting feature added during the third quarter, in which
travelers can pay for such items on their own card when out of policy.
"Business travelers can go beyond the normal corporate
rental to experience upgrades and additional services that travelers enjoy and
want," he said. "We recognize that many travelers use business trips
as opportunities to explore new cities or meet up with family or friends in the
area, and we are thrilled to offer a feature to help make the reconciliation of
travel expenses cleaner and easier."
Avis Budget also continues to grow its fleet of connected
cars. It has more than 160,000 vehicles at the present and by the end of the
year will have a projected more than 200,000, De Shon said.
The group reported a net income of $189 million for the
third quarter, down from $213 million in the third quarter of 2018.
RELATED: Avis Budget Q2 earnings