Corporate travel demand during the third quarter was “strong,” exceeding both 2021 and 2019 levels for the period, Avis Budget Group reported Tuesday.
The month of September was the busiest September on record, with a “pretty significant” increase in corporate business as a contributing factor, even though average rates were elevated compared with a year prior, Avis Budget CEO Joe Ferraro said during an earnings call.
The pick-up was most pronounced after Labor Day, “with new signings of accounts and partnerships powering robust midweek demand,” he said, adding that he is “quite bullish” on those trends continuing, even with the upcoming holidays.
“Most travel organizations are reporting declines in commercial travel compared to 2019. We have not seen that,” Ferraro said. “We’ve seen terrific growth in government, defense contracting, aerospace, tech companies, logistic companies.”
Ferraro said companies are getting together more frequently now than in the pandemic “and maybe prior,” noting trade organizations and associations also are holding meetings. “There’s a resurgent move into the cities,” he said. “We’ve seen it in a lot of our city operations that those places are doing quite well in the middle of the week.”
Q3 Metrics and Guidance
ABG reported third-quarter revenue of $3.55 billion, up 18 percent year over year and up 29 percent compared with Q3 2019. Net income was $1.03 billion, the best quarterly result in company history, representing an increase of 53 percent year over year, according to Avis Budget. This quarter also was the sixth in a row in which ABG reported record-high adjusted earnings before interest, taxes, depreciation and amortization for that given quarter.
The company’s third-quarter rental days increased 17 percent year over year to more than 46.5 million. Revenue per day was $79.21, up 4 percent from $75.86 in Q3 2021. The average rental fleet increased 18 percent to about 707,000 with 71.4 percent utilization.
ABG for the Americas region reported $2.7 billion in third-quarter revenue, representing about 76 percent of total company revenue and a 12 percent year-over-year increase. International revenue was $844 million, up 41 percent from a year prior.
During the quarter, Avis Budget successfully deployed QuickPass, the company’s touchless service, across all major U.S. airports, according to the company.
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