Hertz 2011 Annual Report Download - page 30

ITEM 1. BUSINESS (Continued)
Worldwide Car Rental
We believe that the global car rental industry exceeds $30 billion in annual revenues. According to Auto
Rental News, car rental industry revenues in the United States are estimated to be approximately
$22 billion for 2011 and grew in 2011 by 8.8%. We believe car rental revenues in Europe account for
approximately $12 billion in annual revenues, with the airport portion of the industry comprising
approximately 36% of the total. Within Europe, the largest markets are France, Italy, the United Kingdom,
Germany and Spain. We believe total rental revenues for the car rental industry in Europe in 2011 were
approximately $9.9 billion in 11 countries—France, Italy, the United Kingdom, Germany, Spain, The
Netherlands, Switzerland, Belgium, the Czech Republic, the Slovak Republic and Luxembourg—where
we have company-operated rental locations and approximately $2.1 billion in 12 other countries—
Ireland, Portugal, Sweden, Greece, Norway, Denmark, Austria, Poland, Finland, Hungary, Malta and
Romania—where our brand is present through our licensees.
We estimate that rentals by airline travelers at or near airports, or ‘‘airport rentals,’’ accounted for
approximately one-half of the total market in the United States in 2011. This portion of the market is
significantly influenced by developments in the travel industry and particularly in airline passenger traffic,
or ‘‘enplanements,’’ as well as the Gross Domestic Product, or ‘‘GDP.’’ We believe domestic
enplanements increased in 2011 by approximately 3.0% and are expected to increase by 3.2% in 2012.
Current data suggests that U.S. GDP increased in 2011 by approximately 1.7% and is expected to
increase by 2.3% in 2012. The International Air Transport Association, or ‘‘IATA,’’ projected in December
2011 that annual global enplanements would increase by 4.0% in 2012.
The off-airport portion of the industry has rental volume primarily driven by local business use, leisure
travel and the replacement of cars being repaired. Because Europe has generally demonstrated a lower
historical reliance on air travel, the European off-airport car rental market is significantly more developed
than it is in the United States. However, we believe that in recent years, industry revenues from off-airport
car rentals in the United States have grown faster than revenues from airport rentals.
We provide commercial fleet leasing and management services to national corporate customers
throughout the U.S. and Canada through Donlen Corporation, or ‘‘Donlen,’’ a wholly owned subsidiary.
Donlen is a fully integrated fleet management services provider with a comprehensive suite of product
offerings ranging from leasing and managing vehicle fleets to providing other fleet management services
to reduce fleet operating costs.
Worldwide Equipment Rental
We estimate the size of the U.S. equipment rental industry, which is highly fragmented with few national
competitors and many regional and local operators, remained relatively the same at approximately
$28 billion in annual revenues for 2011 and 2010, but the part of the rental industry dealing with
equipment of the type HERC rents is somewhat smaller than that. We believe that the industry is
expected to grow at 8.6% compound annual growth rate between 2011 and 2015. Other market data
indicates that the equipment rental industries in France, Spain, Italy and China generate approximately
$4.5 billion, $2.5 billion, $2.1 billion and $5.1 billion in annual revenues, respectively, although the
portions of those markets in which HERC competes are smaller.
The equipment rental industry serves a broad range of customers from small local contractors to large
industrial national accounts and encompasses a wide range of rental equipment from small tools to
heavy earthmoving equipment. We believe U.S. non-residential construction spending decreased at an
annual rate of 7% in 2011 but is projected to increase at an annual rate of 1% in 2012. We also believe
that rental equipment accounted for approximately 40% of all equipment sold into the U.S. construction
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