Avis 2009 Annual Report Download - page 8

Table of Contents
* * *
3
to continue to increase the share of our reservations that we generate through our avis.com and budget.com websites, which are our
least
-
expensive sources of advance bookings.
•
Expanding Our Revenue Sources
. We plan to continue to focus on car class upgrades and expand our ancillary revenues by offering
additional products and services to on- and off-airport customers and by increasing, where appropriate, our recovery from our
customers of costs imposed on us by third parties. Opportunities for ancillary revenue growth include adding sales of additional
insurance coverages and insurance-
related and other ancillary products and services, such as electronic toll collection services, satellite
radio and our w here2 GPS navigation product, to the rental transactions of an increasing percentage of our renters. In addition, we
seek to grow off-airport revenue by continuing our efforts to identify and attract local demand and increasing our revenues in the
insurance replacement sector.
• Capturing Incremental Profit Opportunities. We plan to continue our focus on yield management and pricing optimization and seek
to increase the time and mileage rental fees we earn per rental day. We have implemented technology that strengthens our yield
management and that enables us to tailor our product/price offerings to specific customer segments. In 2009, we also implemented
retail price increases, and we expect to continue to adjust our pricing to match changes in demand and as conditions warrant. In
addition, we believe the expansion of our revenue sources (discussed above) should permit us to generate incremental profits from our
customer base, while at the same time enhancing our customers
’
vehicle rental experience.
•
Controlling Costs and Promoting Efficiencies.
We have continued our efforts to rigorously control costs. We developed and
implemented our Performance Excellence process improvement initiative to increase efficiencies, reduce operating costs and create
sustainable cost savings. This initiative generated substantial savings in 2009 and should continue to provide benefits in 2010. In
addition to the Performance Excellence initiative, in 2009 we took aggressive action to reduce expenses throughout the organization,
in large part through a five-point strategy for realizing cost savings as described above. We believe such steps will continue to impact
our financial performance.
•
Mitigating Risks.
We expect to continue to face a challenging operating environment in 2010 as demand for travel services is likely to
remain below 2007 and 2008 levels. We seek to mitigate our exposure to these risks in numerous ways, including the actions described
above, continued adjustment of fleet levels to reflect changes in demand for vehicle rentals, maintenance of ample liquidity to fund our
fleet and our operations, and adjustments in the size, nature and terms of our relationships with vehicle manufacturers.