Avis 2010 Annual Report Download - page 17

Table of Contents
Airport Concession Fees
In general, concession fees for on-airport locations are based on a percentage of total commissionable revenue (as defined by each airport
authority), subject to minimum annual guaranteed amounts. Concessions are typically awarded by airport authorities every three to five years
based upon competitive bids. Our concession agreements with the various airport authorities generally impose certain minimum operating
requirements, provide for relocation in the event of future construction and provide for abatement of the minimum annual guarantee in the event
of extended low passenger volume.
Competition
The car rental industry is characterized by intense price and service competition. Competition in our vehicle rental operations is based primarily
upon price, reliability, vehicle availability, national distribution, usability of booking systems, ease of rental and return, and other elements of
customer service. In addition, competition is influenced strongly by advertising, marketing and brand reputation. We compete primarily with the
following car rental companies: Hertz Global Holdings, Inc., which operates the Hertz and Advantage brands; Dollar Thrifty Automotive Group,
Inc.; Enterprise Rent-A-Car Company, which also operates the National Car Rental and Alamo brands; and Europcar.
Truck rental business
Operations
Budget’s truck rental business is one of the largest local and one-way truck rental businesses in the United States. The Budget truck rental
business has a combined fleet of approximately 27,000 trucks, with an average truck age of five years, which is rented through a network of
approximately 2,250 dealers and 200 company-operated locations throughout the continental United States. A certain number of our dealer
locations are operated by our Budget car rental licensees. The Budget truck rental business serves both the consumer and light commercial
sectors. The consumer sector consists primarily of individuals who rent trucks to move household goods on either a one-way or local basis. The
light commercial sector consists of a wide range of businesses that rent light- to medium-duty trucks, which we define as trucks having a gross
vehicle weight of less than 26,000 pounds, for a variety of commercial applications. In 2010, the Budget truck rental business generated total
revenue of approximately $367 million.
We advertise in “yellow pages” telephone directories and purchase online ad placements and keywords to help promote our truck rental business
to new and existing customers. Budget truck rental customers can make reservations through the Budget truck rental reservation center at 1-800-
GO-BUDGET, through our Budget truck rental website at budgettruck.com, or by calling a location directly.
In 2010, we entered into a multi-year agreement under which we have the exclusive right to advertise truck rental services in the Mover’
s Guide,
an official U.S. Postal Service change of address product. We also began a targeted email marketing campaign to reach new customers. In
addition, we have relationships with businesses and websites like moving.com and Pep Boys, a leading automotive aftermarket service and retail
chain, to promote Budget’s truck rental business, as well as a relationship with AARP offering reduced rates to members.
Distribution
Budget’s truck rental business is offered through a national network, which included approximately 2,250 dealers as of December 31, 2010.
These independently-owned dealers primarily operate self-storage facilities, rental centers, hardware stores, service stations and other similar
retail service businesses. In addition to their principal businesses, the dealers rent our light- and medium-duty trucks to consumers and to our
commercial accounts and are responsible for collecting payments on our behalf. The dealers receive a commission on all truck rentals and
ancillary equipment rentals. Generally, agreements with dealers may be terminated by either party upon 30 to 90 days’ prior written notice.
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