Hertz 2007 Annual Report Download - page 30

The Hertz brand is one of the most recognized brands in the world. It has been listed in Business Week’s
‘‘100 Most Valuable Global Brands’’ every year that it was eligible for inclusion in the study since the
study’s inception in 2001. The Hertz brand has been the only travel company brand to appear in the
study. Moreover, our customer surveys indicate that in, the United States, Hertz is the car rental brand
most associated with the highest quality service. This is consistent with numerous published best-in
class car rental awards that we have won, both in the United States and internationally, over many years.
We have sought to support our reputation for quality and customer service in car rental through a variety
of innovative service offerings, such as our customer loyalty program (Hertz #1 Club), our global
expedited rental program (Hertz #1 Club Gold), our one-way rental program (Rent-it-Here/
Leave-it-There), our national-scale luxury rental program (Prestige Collection), our national-scale
experiential rental program (Hertz Fun Collection), our environmentally friendly rental program (Green
Collection) and our in-car navigational services (Hertz NeverLost). We intend to maintain our position as
a premier company through an intense focus on service, quality and product innovation.
In 2007, we introduced Simply Wheelz by Hertz, a new company under the Hertz brand which offers
leisure travelers faster, easier and more affordable access to popular rental cars. Simply Wheelz offers an
easy-to-use website for reservations and self-service rental machines to rent and return vehicles. Simply
Wheelz is currently accepting reservations in our Orlando, Florida and Alicante and Malaga, Spain
locations.
In the United States, the Hertz brand had the highest market share, by revenues, in 2006 and in the first
eight months of 2007 at the approximately 180 largest airports where we operated. Out of the
approximately 160 major European airports at which we have company-operated rental locations, data
regarding car rental concessionaire activity for the year ended December 31, 2006 was available at 69 of
these airports. Based upon this data, we believe that we were the largest airport car rental company,
measured by aggregate airport rental revenues during that period, at those 69 airports taken together. In
the United States, we intend to maintain or expand our market share in the airport rental business. For a
further description of our competitors, market share and competitive position see ‘‘—Competition’’
below.
At our major airport rental locations, as well as at some smaller airport and off-airport locations,
customers participating in our Hertz #1 Club Gold program are able to rent vehicles in an expedited
manner. In the United States, participants in Hertz #1 Club Gold often bypass the rental counter entirely
and proceed directly to their vehicles upon arrival at our facility. For the year ended December 31, 2007,
rentals by Hertz #1 Club Gold members accounted for approximately 41% of our worldwide rental
transactions. We believe the Hertz #1 Club Gold program provides a significant competitive advantage
to us, particularly among frequent travelers, and we have, through travel industry relationships, targeted
such travelers for participation in the program.
In addition to our airport locations, we operate off-airport locations offering car rental services to a variety
of customers. Our off-airport rental customers include people wishing to rent cars closer to home for
business or leisure purposes, as well as those needing to travel to or from airports. Our off-airport
customers also include people who have been referred by, or whose rental costs are being wholly or
partially reimbursed by, insurance companies following accidents in which their cars were damaged,
those expecting to lease cars that are not yet available from their leasing companies and those needing
cars while theirs are being repaired or are temporarily unavailable for other reasons; we call these
customers ‘‘replacement renters.’’ At many of our off-airport locations we will provide pick-up and
delivery services in connection with rentals.
When compared to our airport rental locations, an off-airport rental location typically services the same
variety of customers, uses smaller rental facilities with fewer employees, conducts pick-up and delivery
services and deals with replacement renters using specialized systems and processes. In addition, on
average, off-airport locations generate fewer transactions per period than airport locations. At the same
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