Corporate travel joined leisure travel as sectors of growing strength in the second quarter, Avis Budget Group reported Thursday.
"Commercial came back as corporate customers got back on the road,” Avis Budget president and CEO Joe Ferraro said Tuesday during the company's second-quarter earnings call, adding that as a share of the Americas business, commercial grew to nearly 40 percent during the quarter. “We still had price in the $82 [a day] range, so we’ve seen [in] our commercial business—whether it be large commercial, mid- or small—that price elevation as well.”
ABG reported its best quarterly results in the company’s history for the second quarter, and it was the company’s fifth consecutive earnings report “where we delivered record high adjusted [earnings before interest, taxes, depreciation and amortization] for that given quarter,” Ferraro said.
“Travel is robust, and our key indicators support this, certainly throughout the summer as customers both leisure and commercial are dedicating their share of wallet to us,” he added.
The company’s second-quarter net income was $774 million on revenue of $3.24 billion, the latter figure up 37 percent year over year and up 39 percent versus 2019.
The Americas accounted for $2.57 billion of the reported revenue, or about 79 percent of the total. Demand accelerated, and rental days were up 28 percent compared with 2021, and up 9 percent versus 2019, Ferraro said, “depicting what we believe is a more normalized environment.”
Overall, the company reported about 42.6 million rental days, up 29 percent year over year. Revenue per day was up to $78.19 from $71.74 a year prior. Fleet size grew 31 percent to nearly 669,000 vehicles. The Americas revenue per day was up slightly to $80.76 from $79.26.
“The summer season is robust, but RPD is leveling off,” said Avis Budget EVP and CFO Brian Choi. “July RPD in the Americas is roughly flat with June, and that should remain the case for August. However, as Joe mentioned, we are seeing a return to normal seasonality, so September will see a pullback in RPD as leisure travel slows and corporate travel picks up.”
Avis Budget plans to increase the pace of its electric vehicle growth during the second half of this year to meet both corporate and leisure demand. “We’ve been growing our EV fleet with a number of [original equipment manufacturers], and we are deploying Level 2 EV chargers across select airports and local market stores,” Ferraro said. “We know that our average customer length of rental is more than four days, and we want to scale our EV fleet to match the infrastructure build to provide comfort and confidence to our customers traveling in unfamiliar cities.”
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