Hertz 2010 Annual Report Download - page 33

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ITEM 1. BUSINESS (Continued)
Since January 1, 2008, we increased the number of our off-airport rental locations in the United States by
approximately 22% to approximately 1,930 locations. Our strategy includes selected openings of new
off-airport locations, the disciplined evaluation of existing locations and the pursuit of same-store sales
growth. We anticipate that same-store sales growth will be driven by our traditional leisure and business
traveler customers and by increasing penetration of the insurance replacement market, of which we
currently have a low market share. In the United States during the year ended December 31, 2010,
approximately one-third of our rental revenues at off-airport locations were related to replacement
rentals. We believe that if we successfully pursue our strategy of profitable off-airport growth, the
proportion of replacement rental revenues will increase. As we move forward, our determination of
whether to continue to expand our U.S. off-airport network will be based upon a combination of factors,
including, commercial activity and potential profitability as well as the concentration of target insurance
company policyholders, car dealerships and auto body shops. We also intend to increase the number of
our staffed off-airport rental locations internationally based on similar criteria.
Our worldwide car rental segment generated $6,486.2 million in revenues during the year ended
December 31, 2010.
Customers and Business Mix
We categorize our car rental business based on two primary criteria—the purpose for which customers
rent from us (business or leisure) and the type of location from which they rent (airport or off-airport). The
table below sets forth, for the year ended December 31, 2010, the percentages of rental revenues and
rental transactions in our U.S. and international operations derived from business and leisure rentals and
from airport and off-airport rentals.
Year ended December 31, 2010
U.S. International
Revenues Transactions Revenues Transactions
Type of Car Rental
By Customer:
Business .............................. 46% 51% 51% 54%
Leisure ............................... 54 49 49 46
100% 100% 100% 100%
By Location:
Airport ............................... 72% 75% 54% 58%
Off-airport ............................. 28 25 46 42
100% 100% 100% 100%
Customers who rent from us for ‘‘business’’ purposes include those who require cars in connection with
commercial activities, the activities of governments and other organizations or for temporary vehicle
replacement purposes. Most business customers rent cars from us on terms that we have negotiated
with their employers or other entities with which they are associated, and those terms can differ
substantially from the terms on which we rent cars to the general public. We have negotiated
arrangements relating to car rental with many large businesses, governments and other organizations,
including most Fortune 500 companies.
Customers who rent from us for ‘‘leisure’’ purposes include not only individual travelers booking
vacation travel rentals with us but also people renting to meet other personal needs. Leisure rentals,
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