Commercial rental car volume declined year over year for Hertz
Global Holdings at the tail end of 2015, caused by a combination of slowing
corporate demand and a stricter sales approach to corporate customers.
Business traffic declined 2 percent year over year during
the fourth quarter while leisure traffic rose 4 percent, CFO Tom Kennedy said during
Hertz's earnings call. Total U.S. car rental revenue was $1.4 billion, down 5.2
percent year over year. "We saw a degree of softening in business travel
in the marketplace during the fourth quarter," chief revenue officer Jeff
Foland said. "Outside of [the energy sector], it was a more muted
softening in that demand."
Hertz also is executing a "sales-effectiveness
strategy," focusing on higher-yield corporate business rather than simply
increasing corporate business volume. That also affected commercial rental
volume, Kennedy said.
Throughout 2015, 71 percent of corporate accounts that came
up for renewal were negotiated at the same or higher rates, Foland said. Avis
Budget Group reported a similar decline both in commercial volume and in its
success with renewal rates.
Hertz reported fourth-quarter income of $70
million, compared with a $234 million loss the previous year. For the full-year
2015, Hertz's net income was $273 million, up from an $82 million loss in 2014.
A cost-reduction program, which includes tighter fleet management and lowering
overhead costs, accounted for $75 million in savings in the fourth quarter and
$230 million for the full year.