Hertz Global Holdings Inc. reported that demand for rental cars has grown as vacationers are traveling to destinations within driving distance of home and foregoing flights, causing a jump in demand for vehicles.
After Hertz provided investors with an outlook that far exceeded Wall Street’s expectations, the rental car sector surged on June 25. Avis Budget Group Inc. and Dollar Thrifty Automotive Group Inc. received an even bigger boost. Dollar Thrifty shares rose $2.66, or 24.2 percent, to $13.60, after setting a 52-week high of $13.92 earlier in the session. The stock was at a 52-week low of 60 cents in early March.
Hertz Chairman and CEO Mark Frissora said that people in the U.S. and Europe are “staying local when they travel.” In the U.S., reservations for the July 4 weekend are up year-over-year. Vacation spending has also benefited from the deep discounts now being offered by hotels.
Hertz’s equipment rental business, however, has continued to soften, Frissora said. “We may not see an upward turn in this thing until the fourth quarter,” he said.