Thrifty Car Rental 2006 Annual Report Download - page 16

Download and view the complete annual report

Please find page 16 of the 2006 Thrifty Car Rental annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 112

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112

brands in certain markets on a dual franchise or co-brand basis. Revenue generated by the Company
from franchised operations outside the United States and Canada totaled $8.2 million in 2006, comprised
primarily of system, reservation and advertising fees.
Thrifty Car Sales
In December 1998, Thrifty Car Sales was formed to operate a franchise system, “Thrifty Car Sales”.
Thrifty Car Sales provides an opportunity to qualified candidates including independent and franchised
dealers to enhance or expand their used car operations under a well-recognized national brand name. In
addition to the use of the brand name, dealers have access to a variety of products and services offered
by Thrifty Car Sales. These products and services include participation in a full service business
development center, a nationally supported Internet strategy and website, operational and marketing
support, vehicle supply services, customized retail and wholesale financing programs as well as national
accounts and supplies programs. As of December 31, 2006, Thrifty Car Sales had 32 franchise locations
in operation.
Reservations
The Internet is the primary source of reservations for the Company. For the year ended December 31,
2006, approximately 68% of the Company’s total non-tour reservations came through the Internet,
increasing from approximately 62% in 2005. The Company’s Internet Web sites (dollar.com and
thrifty.com) provided approximately 39% of total non-tour reservations. During 2006, 29% of non-tour
reservations were provided from third party Internet sites with no individual third party site providing in
excess of 9% of total non-tour reservations. The remaining non-tour reservations were primarily provided
by the reservation call centers and travel agents. The Company has continuously staffed reservation call
centers for Dollar and Thrifty at its headquarters in Tulsa, Oklahoma, and at its facility in Tahlequah,
Oklahoma. Dollar and Thrifty reservation systems are linked to all major airline reservation systems and
through such systems to travel agencies in the United States, Canada and abroad. In February 2007, the
Company announced that it would be outsourcing portions of its call centers to PRC, a global leader in
the operation of outsourced call centers, during the second quarter of 2007.
Marketing
Dollar and Thrifty are positioned as value car rental companies in the travel industry, providing on-airport
convenience with low rates on quality vehicles. Customers who rent from Dollar and Thrifty are cost-
conscious leisure, government and business travelers who want to save money on car rentals without
compromising fundamental car rental products or services.
Dollar and Thrifty acquire these value-oriented customers through a multi-faceted marketing approach
that involves traditional (television and print) and Internet advertising, Internet search marketing, sales
teams, strategic marketing partners, and investments in traditional and emerging distribution channels.
Each of these disciplines has a specific focus on selected customer segment opportunities.
In support of this multi-faceted approach, Dollar launched a series of new offerings in 2006, including a
new customer incentive program, "Dollar Rewards", which provides Dollar’s frequent customers with free
rental days. In addition, Dollar made significant enhancements to its speed of service product, "Dollar
Express"; launched a Travel Agent Incentive program with American Express called “Dollar Dividends”;
and launched, via dollar.com, a small business product, "Dollar4Business". Thrifty has similar programs
in place, including Thrifty's “Bluechip” speed of service product, “Bluechip Rewards”, for frequent
customers; "Look to Book" incentives for travel agents; and “Thrifty SmartBiz” for small business
customers.
In the United States, Thrifty’s national advertising and marketing expenses are paid out of an advertising
fund managed by a national advertising committee consisting of representatives of Thrifty franchisees
and certain members of Company management.
10