In part because of a trend toward smaller auto rental agency fleets, sales for all five auto rental brands operating at the Medford, Ore. airport declined over the first half of 2009, according to Mail Tribune.
The airport’s passenger count is down 10.1 percent this year, but the size of fleets agencies keep on hand might be a more telling factor. Fleet size is based on various calculations, including factors such as competitors and historical data.
Kim Daniels, local agency operator for the Avis Budget Group, said recent belt-tightening is occurring among rental agencies as it is in many other businesses. When the size of fleets is cut down, fewer cars usually 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,” Daniels explained.
Daniels added that selling out is the least-desirable outcome. A proper balance between enough cars and reservations is crucial. “We don't want to turn down people ever," Daniels said.
But smaller fleet sizes are among the factors causing sales declines, including 19.5 percent at Avis Rent A Car and 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.
Market forces and natural disasters in 2008 gave Avis-Budget Group a business boost from forest services. A reduced rental vehicle fleet in the area would mean fewer available vehicles for emergency response teams. Now, the SUVs and pickups simply aren’t available, Daniels stated.
One travel agency in Medford said he’s seen a change in rental-car habits during the economic slump. Chuck Brook at Express Travel said people will continue cutting their spending. So will companies, which no longer have big expense accounts.
“Now they have to be accountable, and people are cutting corners where they can,” Brook said.