Avis Budget Group reported "unusually soft"
pricing during the first quarter of 2016, due in part to sluggish corporate
travel demand.
Pricing in the Americas declined 5 percent year over year,
including a 3 percent decrease in commercial pricing, president and CFO David
Wyshner said during an earnings call. Part of that overall decline stemmed from
lower commercial volumes. While overall volume in the Americas rose 3 percent,
commercial volume declined 3 percent.
Other factors included higher fleet levels at airports and less
inbound international travel to major U.S. leisure destinations than normal,
owing to the strength of the dollar, CEO Larry De Shon said. Few of the
attempts at price increases during the quarter stuck, he said.
Prices have begun to rebound, as has corporate travel volume,
as Avis Budget Group signed "a large number of commercial accounts
recently," De Shon added. He called the lower first-quarter commercial
pricing an anomaly within a trend of rising prices. "March was better than
February, April was better than March and May bookings indicate a continuation
of the favorable pricing trend."
Outside the Americas, Avis Budget's rental volume increased
21 percent year over year during the first quarter, though pricing declined 9
percent—or 5 percent absent the effects of currency fluctuations.
Volume growth outside the Americas helped propel
total net revenue up 2 percent to $1.9 billion. The company lost $51 million during
the quarter, compared with $9 million in the first quarter of 2015. Currency
fluctuations alone, including hedging losses, cost the company $33 million
during the first quarter of 2016.