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Reports:
Corporate Performance 2002
Top 50 cities for Corp Rentals
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Overview:
BUSINESS
TRAVEL TRENDS:
According to industry
experts, business travel continues to be much weaker than leisure travel.
Business trip volume is off by an estimated 10 percent or more versus
a year ago. A meaningful recovery in travel is apparently not going to
occur until the business travel sector rebounds. Almost half of airline
passengers are business travelers. Approximately 60% of hotel stays are
either transient business guests or come from conferences and meetings.
Car rental companies, as a whole, generate more than half their rentals
from business travelers.
Business travel revenues
also account for a more sizable and disproportionate share of total travel
industry income. In February 2002, while airline traffic fell 11 percent,
revenues declined by 23 percent. Similarly, hotel industry data show room
revenues falling at twice the rate of the declines in room night demand.
There are also some
psychological negatives still present among business travelers. And, "travel
hassle" has become a real deterrent. Business travel demand is now
made up of both "time" and "money" considerations,
i.e., is the business trip really worth the time and money, or are there
more efficient alternatives.
On a net basis, six
months after the 9/11 events, travel industry recovery is moving forward,
but it appears that more time will still be required before travel is
back to normal. For virtually all sectors of the industry the revenue
picture will be somewhat weaker, as price cutting has eroded supplier
margins.
THRIFTY
CORPORATE SALES RESULTS
T&M rental revenue
for corporate account business is finally turning around. While we have
had negative T&M totals each month this quarter, as compared to same
period last year, the losses are less each month and, if the trend continues,
we should see positive variances beginning in April 2002.
The following were
all contributing factors in Corporate Sales T&M revenue results achieved
in 1st Quarter 2002:
Personnel:
Sales territories
were restructured in 1st quarter 2002 to allow Kerri Lopez
to spend 75% of her time on the Local Sales Development Program and the
remaining 25% of her time on corporate sales. In addition, the corporate
sales department is down 1 regional sales director position from same
period 2001 with closing of Upper Midwest region office last summer.
Account Status:
By March, many long-standing
Thrifty accounts were beginning to show increased rental activity for
the first time in 2002. Regional sales directors have also been successful
in selling 2% more corporate accounts 1Q02 than same period 2001 which
should produce strong revenue gains by 2nd quarter. Twenty-nine
of the 247 new accounts sold in 1Q02 were large and executive level accounts.
We have lost some business due to corporate consolidations where mega
companies with long-standing contracts w/ a major car rental agency are
mandating that the acquired companies follow suit with their established
vendor(s).
Regarding specific
accounts, DaimlerChrysler Corporation is showing significant gains in
both T&M (+101%) and rentals (+123%) for 1st quarter 2002.
Dow Chemical ($500k/year) was lost in bid effective 7/1/01. Medical Contracting
account ($400k/year) was cancelled 9/1/01 due to high risk. Newport News
Shipbuilding ($500k/year) revenue was down substantially in March from
closing of Newport News airport location and local store and buy-out by
Northrop Grumman.
Thrifty Locations:
New Locations
Showing Significant Opportunities: San Jose, CA.
In-terminal Moves:
Boise, ID.
Thrifty Airport Location
closings affecting 1Q02 revenue: Tucson, AZ; Newport News, VA; New Haven,
CT; Bridgeport, CT.
Dark Locations affecting
account signings: Philadelphia, Memphis, NYC, Sacramento, Orange County
and San Diego.
Availability:
Offsells were up 40%
in March. Since corporate renters typically book closer in than leisure
travelers, we believe some possibly significant percentage of our corporate
account customer base had demand which we could not supply especially
during the month of March.
Internet Bookings:
We believe a significant
number of small business renters have migrated to the internet to avoid
travel agency service fees and to find lower rates. Thrifty.com reservation
levels support this as do increased Thrifty bookings with aggregators.
There is evidence that internet searchers do not take time to provide
their CD# at the time of reservation if they find a rate which satisfies
them first. We believe the 27% loss in small business T&M showing
on corporate sales reports may be partially a function of this migration
to internet bookings and not an actual reduction in use of Thrifty for
small business travel. We will be seeking some means of channeling and
stimulating corporate reservations made via thrifty.com in the near future.
Authorized
Billing:
We now have over 400
corporate accounts enrolled in Thrifty’s Authorized Billing program. A
test of department level billing functionality will begin in early 2nd
quarter 2002 which should enhance even further usage of this renter-friendly
program with our corporate account customers.
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