Auto rental companies feel the pinch

Sales for all five automobile rental brands operating at the Medford airport declined over the first half of 2009.

Year-to-date declines ranged from 19.5 percent at Avis Rent A Car to 3.1 percent at Enterprise Rent-A-Car, according to figures reported to Jackson County.

As of June 30, the combined rental revenue was $2.9 million, down from $3.2 million the first half of 2008. Total rental revenue in 2008 reached $6.75 million.

While the airport's passenger count is down 10.1 percent this year, a more telling factor might be the size of fleets kept on hand.

"The industry is trending to smaller fleets," said Kim Daniels, local agency operator for the Avis Budget Group. "There has been more belt-tightening and fiscal decisions, the same you would have to do with any business. Normally, fewer cars means less revenue. If rates can't be adjusted — up and down — quickly enough for how many cars are here, you can be sold out and the revenue will not be there."

Fleet size is based on an array of calculations, ranging from competitors to historical data.

"You have to make decisions, which will affect the bottom line," Daniels said. "Selling out isn't better, ever. What you want to do is find the balance between enough cars and reservations and it's a very fine line. We don't want to turn down people ever."

Even so, market forces and natural disasters can conspire to trump corporate planning.

"We had a lot of Forest Service-type of business (in 2008) from the fires in Northern California and up near Prospect," Daniels said. "A lot of that stuff was out all summer long."

With a reduced fleet, emergency response teams would have to look elsewhere for vehicles.

"If we had fires this year, we would have difficulty meeting the needs," Daniels said. "The SUVs and pick-ups just aren't there."

During the first half of the year, Hertz, Budget and Enterprise both reported two months of increased sales, while National had one month of gains. Enterprise and National Car Rental are corporately affiliated.

Hertz was the top revenue producer at the airport with nearly $813,000 during the first six months of 2009. Despite back-to-back gains in April and May, the No. 1 airport rental company in the nation and market trailed 2008 sales by 7.4 percent at mid-year. National, which saw a 1.12 percent year-over-year gain in June, was No. 2 after six months at just over $661,000.

Avis, which trailed last year's performance throughout the first six months, posted revenue of about $595,000. Budget had revenues of $460,000 through six months and Enterprise brought in $345,400.

Chuck Brook at Express Travel in Medford said he's seen a change in rental-car habits during the economic slump.

"My guess is that people are watching their money a little closer," Brook said. "Instead of renting a car they will say 'I'll have Uncle Joe pick me up at the airport and drive me around. Companies are watching their money too. It used to be with expense accounts, people wouldn't worry about it. Now they have to be accountable and people are cutting corners where they can."

Reach reporter Greg Stiles at 776-4463 or e-mail

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