Corporate business volumes at Avis Budget Group grew in the third quarter, though the company is seeing little movement on rates for its largest customers.
President and CEO Larry De Shon said volumes on corporate business in the United States have been improving for "a number of months" and that corporate volume in Europe, the Middle East and Africa was "extremely strong" in the quarter, up 10 points. Overall, rental days in midmarket and small business accounts were up 9% year over year in the quarter, he said.
"Now, we just have to work on rate, which continues to be under pressure," De Shon said. "The midmarket and large commercial accounts continue to be extremely competitive when those get renewed. I'm hoping at some point we can turn the corner on pricing with those contracts."
Pricing for small business accounts tends to follow leisure trends, which should be moving upward as fleet tighten, he said.
During the third quarter, total rental days in the Americas were up 3% year over year as revenue per day, excluding exchange rate effects, declined 2%. Outside of the Americas, rental days were down 1% year over year and revenue per day, excluding exchange rate effects, was flat. Total third quarter revenues were $2.8 billion, up 1% year over year excluding exchange rates.
De Shon noted the company has seen a growth in the purchase of such ancillary products as Sirius XMradio and upgrades on the corporate side thanks to a new bill-splitting feature added during the third quarter, in which travelers can pay for such items on their own card when out of policy.
"Business travelers can go beyond the normal corporate rental to experience upgrades and additional services that travelers enjoy and want," he said. "We recognize that many travelers use business trips as opportunities to explore new cities or meet up with family or friends in the area, and we are thrilled to offer a feature to help make the reconciliation of travel expenses cleaner and easier."
Avis Budget also continues to grow its fleet of connected cars. It has more than 160,000 vehicles at the present and by the end of the year will have a projected more than 200,000, De Shon said.
The group reported a net income of $189 million for the third quarter, down from $213 million in the third quarter of 2018.
Source: Business Travel News