Hertz 2011 Annual Report Download - page 33

ITEM 1. BUSINESS (Continued)
weekend, weekly, monthly or multi-month basis, with rental charges computed on a limited or unlimited
mileage rate, or on a time rate plus a mileage charge. Our rates vary at different locations depending on
local market conditions and other competitive and cost factors. While cars are usually returned to the
locations from which they are rented, we also allow one-way rentals from and to certain locations. In
addition to car rentals and licensee fees, we generate revenues from reimbursements by customers of
airport concession fees and vehicle licensing costs, fueling charges, and charges for ancillary customer
products and services such as supplemental equipment (child seats and ski racks), loss or collision
damage waiver, theft protection, liability and personal accident/effects insurance coverage, Hertz
NeverLost navigation systems and satellite radio services.
Our international car rental operations have company-operated locations in France, Australia, Italy, the
United Kingdom, Germany, Spain, Canada, Brazil, The Netherlands, Switzerland, New Zealand,
Belgium, Puerto Rico, the Czech Republic, China, Luxembourg, the Slovak Republic and the U.S. Virgin
Islands.
As of December 31, 2011, we had approximately 2,655 staffed rental locations in the United States, of
which approximately one-fifth were airport locations and four-fifths were off-airport locations, and we
regularly rent cars from 1,335 other locations that are not staffed. As of December 31, 2011, we had
approximately 1,130 staffed rental locations internationally, of which approximately one-fifth were airport
locations and four-fifths were off-airport locations, and we regularly rent cars from approximately 135
other locations that are not staffed. We believe that our extensive U.S. and international network of
company-operated locations contributes to the consistency of our service, cost control, fleet utilization,
yield management, competitive pricing and ability to offer one-way rentals.
In order to operate airport rental locations, we have obtained concessions or similar leasing, licensing or
permitting agreements or arrangements, or ‘‘concessions,’’ granting us the right to conduct a car rental
business at all major, and many other airports in each country where we have company-operated rental
locations, except for airports where our licensees operate rental locations. Our concessions were
obtained from the airports’ operators, which are typically governmental bodies or authorities, following
either negotiation or bidding for the right to operate a car rental business there. The terms of an airport
concession typically require us to pay the airport’s operator concession fees based upon a specified
percentage of the revenues we generate at the airport, subject to a minimum annual guarantee. Under
most concessions, we must also pay fixed rent for terminal counters or other leased properties and
facilities. Most concessions are for a fixed length of time, while others create operating rights and
payment obligations that are terminable at any time.
The terms of our concessions typically do not forbid us from seeking, and in a few instances actually
require us to seek, reimbursement from customers of concession fees we pay; however, in certain
jurisdictions the law limits or forbids our doing so. Where we are required or permitted to seek such
reimbursement, it is our general practice to do so. The number of car rental concessions available at
airports varies considerably, but, except at small, regional airports, it is rarely less than four. Certain of
our concession agreements require the consent of the airport’s operator in connection with material
changes in our ownership. See ‘‘Item 1A—Risk Factors’’ in this Annual Report.
The Hertz brand is one of the most recognized brands in the world. Our customer surveys, in the United
States, indicate that 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 (Gold Plus Rewards), 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
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