Rental car firm Hertz's finance chief Cheung to quit *On Monday, Hertz Global Holdings Inc (HTZ.O) announced that its Chief Financial Officer, Kenny Cheung, will be departing the company to explore other opportunities. Alexandra Brooks, the Chief Accounting Officer, will take on the role of interim finance chief starting April 1.
Before the start of trading, the company's shares, which oversee the Hertz, Dollar, and Thrifty car rental brands, rose by 1.3%. Cheung's departure coincides with a period of reduced profitability for Hertz, resulting from elevated car maintenance expenses. According to Refinitiv data, the company's Q1 profit is anticipated to decline by 84% due to reduced seasonal travel and demand for car rentals.
Cheung will remain with the firm until April 14 while they begin the formal search process for a new CFO.
March 28, 2023 Wingson Law
Hertz Reports Strong Fourth Quarter and Record Full Year 2022Hertz Global Holdings, Inc. reported results for its fourth quarter and full year 2022.
For the fourth quarter 2022, the Company generated total revenues of $2.0 billion, up 4% from the fourth quarter of 2021, and up 7% on a constant currency basis. RPD and RPU were at fourth quarter record levels and volume was up 3% led by post-pandemic demand recovery.
Depreciation continued to normalize during the quarter. Excluding litigation settlements of $168 million in the quarter, direct operating expense per transaction day was $33, down $2 from the third quarter 2022, demonstrating improved operating leverage. Net income was $116 million and Adjusted Corporate EBITDA was $309 million, a 15% margin. For the quarter, loss per share was $0.01 and adjusted earnings per share was $0.50.
Operating cash flow was $277 million for the quarter. Fleet capex of $312 million was a source of cash in the fourth quarter, driven by fleet rejuvenation and seasonal defleeting. As a result, adjusted free cash flow was $424 million, reflecting a 137% conversion from Adjusted Corporate EBITDA. The Company acquired 19 million shares, or 6% of its common stock, during the quarter.
"Our strong results in the fourth quarter and record performance last year reflect a commitment to customers - from leisure and corporate travelers to ride share drivers. With a focus on asset return and risk management, we showed better operating performance, more disciplined fleet management and a commitment to financial returns," said Stephen Scherr, Hertz chair and chief executive officer. "Our team delivered on renewed demand for travel, which is continuing. In 2023, we will build on our progress to grow our business across the Hertz, Dollar, and Thrifty brands. We look to our investments in electrification and technology to yield increasing operating leverage and improved returns and an even better product to our customers around the world."
February 7, 2023 Wingson Law
Hertz and AAA Ready to Ignite the Next Chapter of Long Standing Partnership *longstanding partnership between the two companies. Recently, they have signed a new five-year agreement to continue their collaboration, which has been ongoing since 1978. The partnership provides AAA members with a wide range of benefits and discounts on vehicle rentals, including everyday savings on base rental rates, free use of child seats, waiver of young renter fees, and access to the Hertz Gold Plus Rewards loyalty program.
Over the next five years, Hertz and AAA plan to enhance their partnership further by working together on strategic initiatives and developing innovative services and technologies that will exceed member expectations. Additionally, both companies share a commitment to electric vehicles, and AAA is eager to support Hertz's investment in one of the world's largest EV rental fleets. As a result, AAA believes that partnering with Hertz is an important step towards increasing consumer adoption of electric vehicles.
January 26, 2023 Wingson Law
Hertz Names Wayne Davis as Chief Marketing Officer *Wayne Davis has been appointed as the new Chief Marketing Officer (CMO) of Hertz Global Holdings Inc., effective January 3, 2023. As the Executive Vice President in charge of the Hertz, Dollar, and Thrifty brands, Davis will lead the company's marketing strategy to enhance brand visibility and customer engagement. Previously, Laura C. Smith served as the Executive Vice President of Marketing for two years and will continue to serve as the Executive Vice President of Global Sales and Customer Experience.
With over 20 years of experience in marketing, sales, and business development across various industries, Davis most recently led the Café brand for GE Appliances, a Haier Company. During his tenure, the Café brand grew three-fold and became one of the fastest-growing brands in the appliance industry.
Hertz CEO Stephen Scherr expressed his enthusiasm about Davis joining the team, noting his expertise in data-driven marketing analytics and brand-building experience. Scherr believes that Davis's vision will be instrumental in transforming Hertz's business through electrification, shared mobility, and a digital-first customer experience.
Before joining Hertz, Davis was the Senior Brand Director for Haier & Hotpoint at GE Appliances and the commercial leader for GE Appliances' FirstBuild innovation hub. Davis led the successful launch of the Opal Nugget Ice Maker during his time at FirstBuild.
Excited about his new role, Davis said he looks forward to working with Hertz's talented marketing team to bring innovative ideas to the market and strengthen the company's connection with its consumer, corporate, and rideshare customers.
December 9, 2022 Wingson Law
J.D. Power: High prices suppress car rental satisfaction *According to the J.D. Power 2022 North America Rental Car Satisfaction Study, customers who rent vehicles at the airport are not any happier this year than they were last year, and the reason is likely due to high prices. While rental car companies have largely resolved the vehicle shortage that resulted in a significant drop in customer satisfaction in 2021, satisfaction levels have not improved in 2022. J.D. Power stated that a rapid increase in rental fees, which have risen by 14% this year, is contributing to the suppression of customer satisfaction.
J.D. Power's managing director of travel, hospitality, and retail, Michael Taylor, stated that price is the most significant factor affecting satisfaction when it comes to rental cars, and that the combined effects of inflation and high fuel prices are pushing customers to their limits, which could have an impact on brand image. Taylor added that rental car companies will need to work hard to provide exceptional service and deliver outstanding value if they want to offset the influence of these cost increases on customer satisfaction and brand loyalty.
For the second consecutive year, Enterprise achieved the highest overall customer satisfaction score of 865 out of a 1,000-point scale. National (859) came in second, and Alamo (837) came in third. All three brands are owned by Enterprise Holdings. Hertz (836) was ranked fourth, followed by Avis (816), Dollar (799), Budget (788), and Thrifty (780).
The industry's overall customer satisfaction score was 829, down from 830 in 2021 and 841 in 2020. The 2022 North America Rental Car Satisfaction Study surveyed 8,445 business and leisure travelers who rented a vehicle at an airport location between August 2021 and August 2022. The s tudy was conducted from September 2021 to August 2022.
October 1, 2022 Wingson Law
U.S. Travel Commends Approval of EV Charging NetworkThe Executive Vice President of Public Affairs and Policy at the U.S. Travel Association, Tori Emerson Barnes, has issued a statement commending the U.S. Department of Transportation's final approval for the construction of a nationwide network of EV charging stations across all 50 states, the District of Columbia, and Puerto Rico.
Barnes believes that this is a significant move towards sustainable travel in the U.S. and that it will increase public confidence in electric vehicles. The establishment of this charging network will allow for greater mobility and accessibility for travelers across the nation, connecting urban and rural areas alike.
September 28, 2022 Wingson Law
Short supply, high demand causes issues for those looking to book rental cars *Rental car kiosks at Halifax Stanfield International Airport are currently experiencing the same level of activity as flight check-in counters. Traveler Katherine Hamilton booked a rental car last week, but faced difficulties in finding a company with available cars due to the ongoing global rental shortage.
Despite this, she managed to secure a vehicle, albeit not her preferred choice. Leah Batstone, spokesperson for the airport, confirmed that rental service providers are struggling with vehicle supply. The pandemic, which caused a decrease in popularity of rental cars over the past two years, has led to a reduction in available cars. Furthermore, a shortage of semiconductors is slowing down the production of new vehicles.
The recent surge in travel has led to a higher demand for rentals, surpassing supply and resulting in increased costs. For instance, in January, Hamilton paid $5,000 for four weeks of rental in Florida. Batstone suggests alternative transportation options such as buses, shuttles, taxis, and limos for those unable to secure rental cars. Steve Olmstead, the director of CAA Atlantic, believes that it is too early to determine the direct impact of the rental shortage on the tourism industry.
June 6, 2022 Wingson Law
Vehicle shortage, pent-up demand are forcing some travellers to alter their plans *Taylor Raggers and her partner, Will Perry, were looking forward to their honeymoon in Newfoundland this summer before they realized they'd have no way of getting around the province. The couple, who live in Port Hope, Ont., tried to book a car back in February for a trip they planned to take in late June but were out of luck.
"I probably called five or six places and then anything online that I could find, and they [all had] nothing available," Raggers said. The lack of car rentals means Raggers isn't going to be able to explore Perry's home province and meet family members living there. Instead, the couple will be hitting the road in their own vehicle for a closer destination: Nova Scotia.
"Will really wanted to show me where his family was from. And I really wanted to see Newfoundland. It's big on my bucket list," she said. History is repeating itself as last summer's "carpocalypse" makes a return. With travel picking up and more Canadians planning to get out this summer as the pandemic eases, car rental companies are trying to secure more vehicles, said Craig Hirota, vice-president of government relations and member services for the Associated Canadian Car Rental Operators.
June 1, 2022 Wingson Law
Hoping to rent a car this summer? Good luck *Vehicle shortage, pent-up demand are forcing some travellers to alter their plans
Taylor Raggers and her partner, Will Perry, had planned to spend their summer honeymoon exploring Newfoundland, but they soon realized they were unable to find transportation around the province. Despite living in Port Hope, Ontario, the couple attempted to reserve a car for their late June trip as early as February, but were unsuccessful.
Raggers contacted at least five or six car rental companies, in addition to searching online for any available options, but unfortunately, none were available. Consequently, Raggers and Perry will have to forego the opportunity to explore Perry's home province and meet his relatives residing there. Instead, they have decided to drive to Nova Scotia for a closer destination.
While Perry was eager to show Raggers where his family originated, Raggers had Newfoundland on her bucket list. However, the scarcity of car rentals is reminiscent of last year's "carpocalypse." Car rental companies are striving to obtain more vehicles as travel increases and more Canadians plan trips this summer as the pandemic subsides, stated Craig Hirota, the vice-president of government relations and member services for the Associated Canadian Car Rental Operators. According to Hirota, the industry is still 15 to 20 percent below pre-pandemic numbers.
May 1, 2022 Wingson Law
The rental car ‘apocalypse’ isn’t over. Here’s what to know before booking *Experts say the car rental crisis will probably continue through the summer
Around a year ago, as vaccinated travelers began to explore the world again, they were met with a scarcity of rental cars and elevated prices, leading to what was called the "rental car apocalypse." Currently, the situation has improved slightly, but it is still a far cry from pre-pandemic times. This is due to the ongoing shortage of semiconductor chips that has hampered auto manufacturing and left rental car companies with lower inventories. Despite efforts to restock, it has proven to be more challenging than anticipated.
According to Greg Scott, spokesperson for the American Car Rental Association, supply chain issues persist, and the supply of new cars is not yet back to where it needs to be and may not be for some time. As a result, travelers may not always find a car available when or where they need it or might have to pay significantly more than they would have in 2019. In fact, prices have risen so much that two members of Congress recently wrote letters to the CEOs of Avis and Hertz demanding answers about price hikes and "possible predatory business practices."
For those planning to rent a car this spring or summer, there are several things to keep in mind. Firstly, rental car prices may exceed the cost of a plane ticket. Secondly, experts cannot say for sure when the computer chip and new car bottlenecks will ease, making it uncertain when rental car availability will return to normal. Enterprise Holdings spokesperson Lisa Martini expects strong demand to continue throughout the busy spring and summer travel months. However, Jonathan Weinberg, founder and CEO of the discount car rental site AutoSlash, predicts that the problem will improve in the fall of 2022 and significantly improve by spring and summer of 2023. Nonetheless, Weinberg advises booking car rentals now, as this summer is still expected to be challenging.
March 29, 2022 Wingson Law
Vacation travelers will face higher car rental prices *Prior to the pandemic, car rental prices were artificially low, providing exceptional value for many years. In fact, it's difficult to find any other item of such high value that can be rented at such a low cost. Power tools, boats, and snowmobiles all have much higher rental costs than cars. Even a go-kart costs more to rent for a 24-hour period than a real car.
This was due to a variety of factors, including intense competition within the industry. Car rental companies were able to purchase vehicles at a discount of thousands of dollars that were not available to retail customers. These vehicles were typically kept for 6-12 months before being sold in the used car market at a profit, or for a similar price to what they were purchased for, which kept daily rental rates low. The oversupply in car manufacturing also allowed automakers to provide significant discounts to daily rental companies in exchange for guaranteed large orders.
However, the pandemic had a severe impact on the car rental industry. In the spring and summer of 2020, rental companies were left with an excessive amount of vehicles that they could not afford to leave idle. As a result, they sold them at significant losses. In the United States, Hertz even filed for bankruptcy.
Enterprise performed relatively better than other major companies, in part due to their robust business providing replacement vehicles for insurance-paid collision repairs. However, as demand for rental cars began to return in 2021 (although it's still far from pre-COVID levels), rental companies found themselves unable to obtain new vehicles due to market conditions.
February 22, 2022 Wingson Law
Hertz Canada Ltd. Rent a Car Etobicoke ratifies new three-year deal *On December 2, 2021, Hertz Canada Ltd. Rent a Car Etobicoke's approximately 70 members ratified a three-year agreement. The agreement includes wage increases of $.75 in Year 1, $.25 in Year 2, $.25 in Year 3, and an additional $.25 above the base rate for Lead Drivers Capacity.
Benefit improvements consist of an increase in dental coverage up to $1250.00 per calendar year, a vision allowance increase to $350.00, and the provision of a Drug Benefit Card.
Furthermore, the agreement entails language improvements such as an increase in bereavement entitlement from 1 to 3 days for in-laws, an increase in sick days to 10 days, and the payment of unused sick days at one and a half times the employees' straight time hourly rate when an employee has 5-9 unused sick days.
The employer will also contribute $500.00 to the UFCW Training and Education Fund. Abshir Osman led the Union Negotiating Committee, and Mario Tardelli acted as the Union Rep.
January 28, 2022 Wingson Law