Dollar - How could the Dollar/Thifty group be worth $2 billion?

I know very little about the rent-a-car business except from what I observe when I (frequently) rent cars. By first impression, it doesn't seem like a great business. It's heavily taxed, and I usually pay less than $30/day to drive off the lot with a $20,000 vehicle that I could damge, destroy or hit somebody/something with. Oh, and the rent-a-car company has to keep cleaning the vehicle and maintaining it in tip-top shape.

Most of us recognize that Dollar and Thrifty are lesser players in this industry. I know I only rent from them when they're a lot cheaper than "the big guys." Therefore, I presume they have lower margins than the companies preferred by corporate clients.

So with this in mind, can anyone tell me how this company could be worth more than $2 billion?

http://www.reuters.com/article/2011/05/10/dealtalk-dollarthrifty-hertz-idUSN0926469120110510

Is there some hidden profitability that I'm missing during my frequent trips on the car rental shuttle bus? It's certainly not obvious to me!

Honestly, I don't know, either! If only I had known then what I know now--well, had I not been half convinced a couple of years ago that DTG was going into bankruptcy, I would have bought a thousand or ten shares at $0.67/share and been a rich man now.

One thing to note--DTG has done markedly better than the "premium brands" during the "recession," presumably as people (and corporations) have been more price-sensitive and spending their travel dollars with value brands rather than premium brands (that IME don't provide that much better of a product)...

They aren't making much if anything on the people driving off the lot at $30 a day.

That being said, you probably know better than to pay for coverage/accessories you don't need or want. While others buy it like its required or don't care because someone else(employer) is paying for it. Its not unique to DTG. They are making their money off of auxiliary charges.

They aren't making much if anything on the people driving off the lot at $30 a day.

That being said, you probably know better than to pay for coverage/accessories you don't need or want. While others buy it like its required or don't care because someone else(employer) is paying for it. Its not unique to DTG. They are making their money off of auxiliary charges.
An average of $8-15 per day, depending on location. I'm not sure what the corporate national average is.

An average of $8-15 per day, depending on location. I'm not sure what the corporate national average is.

Yeah, since time immemorial, that's been the path to profitability for car rental companies -- especially those catering to leisure travellers. Heck, I remember my first car rental back in the 80s. My travel agent (remember those!) told me she could get me a great deal with Alamo, but that they would be relentless at the counter demanding that I buy insurance. Without that coaching, I'm not sure I could have remained strong. :) They've actually gotten less pushy over the years.

But it doesn't seem like a lot of money has been made in the industry during that time. Several car rental companies have gone into bankruptcy, and they're constantly being bought and sold without much fanfare. I would have thought that the consolidation in the industry would have boosted prices (much like it has for the US airlines), but so far, car rentals remain (on average) pretty cheap. Indeed, the best thing that Dollar could do for Hertz is probably take out a low-price competitor. As I mentioned, I tend to shop Dollar/Thrifty only when I find the big players are too expensive. I agree that the difference in service is marginal, although my loyalty cards (Emerald, #!, Preferred) usually speed up the renting process at the majors.

But it doesn't seem like a lot of money has been made in the industry during that time. Several car rental companies have gone into bankruptcy, and they're constantly being bought and sold without much fanfare.

I know for sure on a local level you're absolutely right. I'd never open one, either as an independent or a franchise.

I would have thought that the consolidation in the industry would have boosted prices (much like it has for the US airlines), but so far, car rentals remain (on average) pretty cheap. Indeed, the best thing that Dollar could do for Hertz is probably take out a low-price competitor.

That may be Hertz's ulterior motive here, but it's odd, because IME, Hertz doesn't even try to compete on price. They charge such a premium that it's almost like they don't want any business (except from companies who sign agreements for discounted rates).

I think (or at least hope) they want to get into the lucrative value market whole-hog (which their Advantage purchase didn't do for them) without tarnishing their premium brand. Killing Dollar and Thrifty would leave them right where they started.

to what value the stock market places on a company, is a useless pursuit. I just picked up a Dollar rental (compact) in SJC for next week at $89/week, a short time ago they were quoting triple + that price... how anyone, be they a Wall Street analyst, an insider in the rental industry, or the "common" guy on the street can apply logic to the pricing structure and then extrapolate that into a business model upon which more than two people could agree and justify an X multiple to establish a fair stock price, is totally beyond me. Will be interesting to see where the rental car industry "is", in 5-10 years...

I know very little about the rent-a-car business except from what I observe when I (frequently) rent cars. By first impression, it doesn't seem like a great business. It's heavily taxed, and I usually pay less than $30/day to drive off the lot with a $20,000 vehicle that I could damge, destroy or hit somebody/something with. Oh, and the rent-a-car company has to keep cleaning the vehicle and maintaining it in tip-top shape.

Most of us recognize that Dollar and Thrifty are lesser players in this industry. I know I only rent from them when they're a lot cheaper than "the big guys." Therefore, I presume they have lower margins than the companies preferred by corporate clients.

So with this in mind, can anyone tell me how this company could be worth more than $2 billion?

http://www.reuters.com/article/2011/05/10/dealtalk-dollarthrifty-hertz-idUSN0926469120110510

Is there some hidden profitability that I'm missing during my frequent trips on the car rental shuttle bus? It's certainly not obvious to me!

Let's remember that rental companies can do simultaneous transactions. So even if they hypothetically make $10/rental, multiply that by 500 cars out, for instance. Discounters, which run a higher utilization, tend to use that strategy, often at the cost of flexibility.

Hertz's pursuit of Dollar/Thrifty continues.

http://www.bloomberg.com/news/2012-05-15/hertz-s-bid-for-dollar-thrifty-seen-doubling-in-price-real-m-a.html?cmpid=yhoo

And I'm still a bit mystified. Hertz says they need another brand for differentiation. The only way this makes sense is to overcharge Hertz customers and then offer price-sensitive customers the Dollar/Thrifty option.

I just don't get this because all the car rental companies pretty much offer the same cars. It's not like the hotel industry where there is an obvious difference between a JW Marriott and a Fairfield Inn. Once you drive it off the lot, what's the difference between Hertz and Thrifty? Why do they need to sell under different brands?

I'm guessing corporate rentals differ from leisure rentals. My strategy is pretty much no-brainer and, I assume, mirrored by most frequent travellers. Given the service I receive at the counter and through their "quick rent" programs, I have a slight preference for National, Hertz and Avis (and, in this group, I like National the best because I like picking my own car), and will look for their rates/discounts first. But if they're more expensive than the second-tier companies, I readily switch to the second tier companies. I almost never bother with the third-tier (non-nationwide, local) outfits.

I'm guessing Dollar/Thrifty rates go up if Hertz acquires them. That will be a shame, since they are sometimes cheaper.

Hertz's pursuit of Dollar/Thrifty continues.

http://www.bloomberg.com/news/2012-05-15/hertz-s-bid-for-dollar-thrifty-seen-doubling-in-price-real-m-a.html?cmpid=yhoo

And I'm still a bit mystified. Hertz says they need another brand for differentiation. The only way this makes sense is to overcharge Hertz customers and then offer price-sensitive customers the Dollar/Thrifty option.

I just don't get this because all the car rental companies pretty much offer the same cars. It's not like the hotel industry where there is an obvious difference between a JW Marriott and a Fairfield Inn. Once you drive it off the lot, what's the difference between Hertz and Thrifty? Why do they need to sell under different brands?

I'm guessing corporate rentals differ from leisure rentals. My strategy is pretty much no-brainer and, I assume, mirrored by most frequent travellers. Given the service I receive at the counter and through their "quick rent" programs, I have a slight preference for National, Hertz and Avis (and, in this group, I like National the best because I like picking my own car), and will look for their rates/discounts first. But if they're more expensive than the second-tier companies, I readily switch to the second tier companies. I almost never bother with the third-tier (non-nationwide, local) outfits.

I'm guessing Dollar/Thrifty rates go up if Hertz acquires them. That will be a shame, since they are sometimes cheaper.

I think you've hit the nail on the head: these companies need their "premium" brands they can use to charge high rates (and make big margins) to the business crowd. It's much harder to make a profit on cars without a premium brand--the break-even point on rates is in the neighborhood of $20-25/day, and if you're always renting cars for less than that, you're not running a sustainable business. However, the fact that DTAG has performed well lately and looking at how Enterprise built up its empire on just the value Enterprise brand (before buying Vanguard dba Alamo National) means that there is definitely corporate value in the value-brand market.

It's also odd because Hertz has been expanding their Advantage brand, which should be filling the value-traveler niche. However, reviews of Advantage are not terribly positive--there are a lot of issues with overcharging, bad attitudes, and the like. I would have expected more from Advantage once it was brought under the Hertz umbrella, but the service improvements I expected have failed to materialize. (Hint to Hertz: maybe this is why Advantage is not meeting expectations?)

In any case, your strategy is also my strategy, too. If all else is equal--or the price premium is within reason (20%, maybe), I'll pick a top-tier company like National, Hertz, or Avis (in that order, and for the same reason you indicated: I like being able to choose my own car, plus National typically carries more interesting cars than Hertz). I do this for a couple of reasons: one, the brand experience is a bit more consistent with these companies. A well-run DTAG store can actually approach the experience a Gold member gets when using Hertz; some DTAGs actually have a variant of Hertz's "Gold Board" and preprint the contract and have it waiting in your car, making it pretty much just as speedy as Hertz. However, that seems to be the exception, and you won't find that kind of service at all DTAG stores. Additionally, DTAG's brand standards are less stringent than Hertz's on matters such as shuttle frequency and staffing, and they are a bit more picky than Hertz on damage (although not unreasonably so, IMO: Hertz actually lets things slide that I wouldn't let slide if I were loaning my personal car out, whereas DTAG is a bit more strict but entirely fair about it). And while I actually prefer DTAG's rewards structure as it stands for earning free days, Hertz obviously has the advantage when it comes to elite benefits--DTAG doesn't offer any vehicle upgrades or other perks for even hyper-frequent renters.

Another reason I would pick the premium brands for a small price premium is they generally have more corporate stores and thus more flexibility. If you rent a DTAG car in CLT and take a road trip to MCO (as I did a few years ago) and something happens to your Thrifty car in South Carolina or Georgia (fortunately, this didn't happen to me), you're SOL. DTAG is franchised in SC and GA, and a franchised Thrifty location might as well be a Budget or Alamo for all the good it does you. DTAG franchisees are 100% independently owned and operated, and they can't help you if something goes wrong with your corporate Thrifty car--they can't come tow your car in for service, perform maintenance on it, swap you out for another car, or do anything else except give you the phone number to Thrifty corporate (where help is two states away). Conversely, other companies have very different business models, where most or all of the stores are corporate, and even those who are licensees are much better integrated into the corporate system. If you're driving a Hertz car and it dies on you in Hinesville, GA, no worries--there's a corporate Hertz Local Edition there where you can swap to another car in just a few minutes. (This is usually the case with Hertz and Avis, true to a slightly lesser extent with National and Alamo, mostly the case with Budget, shouldn't be an issue anymore with Enterprise after their restructuring, but is often a concern with DTAG and always a concern with the bottom-tier [bottom-feeder] agencies like Payless or Fox.) Plus, DTAG's high level of franchised locations presents a higher risk for customer service issues; although most franchises do try to run a good business, they're less likely to be interested in looking at the big picture (the owner in Spokane couldn't care less that you've rented a hundred cars in the last year in Chicago, Indianapolis, Austin, or Boston--if you damage his car, he wants you to pay him back), and consequently, things that a corporate store might give a bit on in the name of customer service (like extra charges for returning late and things of that nature) may be major sticking points at a franchised location.

That said, though, I am willing to pay about 20% more at the most to rent from a premium agency (after all discounts and coupons have been applied, of course). I don't consider the benefits of Hertz et al. to be worth double or triple the price, and I often see Hertz in that category ($50+ when cars with DTAG are $20, or $150+ when cars are $40 with DTAG).

There's lots more I could write on this subject, but you get the general idea.

On a personal note, I'll be disappointed if this goes through, because the DTAG employee culture is actually pretty positive. I've heard nothing but discontent from those I know who have worked for The Hertz Corporation. I'll put it this way: most of the people I know who work for DTAG still do years later. I don't know anyone who still works at Hertz.

Thanks for sharing your thoughts, Jackal. It's pretty obvious that not everyone has your level of car-rental expertise because, if they did, the car rental business would be an even worse business than it is. :)

I'm still amazed at how cheap car rentals are in the USA. Sometimes, overseas, I actually have to pay "real money" for a car rental. It hurts -- especially when you consider a $25+ car rental in the USA to be expensive. Heck, if not for the crazy taxes, most USA car rentals would seem almost free. :)

There's obviously money to be made in this brand diffentiation, or the companies wouldn't be doing it. For example, I can't understand the difference between Dollar and Thifty: it seems like their prices are now almost ALWAYS identical on their websites. I don't rent from them enough to notice: I assume they still have separate airport counters in some locations? I know they just share one fleet. There's obviously SOME consumer brand differentiation between National/Alamo/Enterprise, but does ANYONE in the public see a difference between Dollar and Thrifty? Somebody once told me that Dollar was supposed to be the more upscale brand, but I've never observed that to be true, and I be surprised if many folks believe it these days.

There's obviously money to be made in this brand diffentiation, or the companies wouldn't be doing it. For example, I can't understand the difference between Dollar and Thifty: it seems like their prices are now almost ALWAYS identical on their websites. I don't rent from them enough to notice: I assume they still have separate airport counters in some locations? I know they just share one fleet. There's obviously SOME consumer brand differentiation between National/Alamo/Enterprise, but does ANYONE in the public see a difference between Dollar and Thrifty? Somebody once told me that Dollar was supposed to be the more upscale brand, but I've never observed that to be true, and I be surprised if many folks believe it these days.

Having been intimately familiar ;) with DTAG for much of the past decade, I can tell you that even *I* have no clue what the difference is supposed to be.

There certainly isn't any brand differentiation. Historically, Dollar was the on-airport provider and Thrifty was the off-airport (as well as suburban/insurance replacement) provider. That distinction has largely gone away.

IMO, the only reason they run two brands now is to try to capture a larger mindshare by presenting customers with two options--i.e. taking up twice the column-width on the Travelocity price grid and perhaps also to try to get around the whole "I'll never rent with [Thrifty]/[Dollar] again" thing by pretending they're two independent companies (which probably 99% of the traveling public believes). And even then, I'm not sure all the duplication in staffing and facilities makes it worth it, but it is what it is.

Also, the fact there are so many franchised Dollars and Thriftys would complicate any brand merger plans. Most larger airports have both brands operated by corporate and would be an easy merger, but there are some places where it could present a problem. Here's a list off the top of my head:

-SEA/PDX Thrifty: corporate
-SEA/PDX Dollar: franchise

-BOS Thrifty: corporate
-BOS Dollar: franchise

-SLC Thrifty: franchise #1
-SLC Dollar: franchise #2

There are many smaller airports where Dollar and Thrifty are both franchised by the same operator, so that would go easier (although I wouldn't be surprised if those licensees asked for one of their two franchise fees to be refunded ;)), but there are also many smaller airports and off-airport locations where only one brand exists or both brands are operated by two different operators (SLC is the only major airport I can think of where this is the case, but there may be smaller regional airports I don't know of where it is also the case).

Interesting, Jackal -- I can tell you do have an exhaustive knowledge of Dollar/Thrifty.

A corporate/franchise city-by-city chart would be marginally useful, I guess. Maybe I'm wrong, but I would book with the corporate side if everything else was equal (which it usually is!).

Right now, the only reason I prefer one to the other is that I try to remember to book with a cashback site and when I pull up the data from a site like evreward.com, the payouts can be different. BTW, I'm not even sure I get the cashback, because it's usually so little money (less than a dollar a day) that I don't bother to to check or follow-up.

Interesting, Jackal -- I can tell you do have an exhaustive knowledge of Dollar/Thrifty.

A corporate/franchise city-by-city chart would be marginally useful, I guess. Maybe I'm wrong, but I would book with the corporate side if everything else was equal (which it usually is!).

Right now, the only reason I prefer one to the other is that I try to remember to book with a cashback site and when I pull up the data from a site like evreward.com, the payouts can be different. BTW, I'm not even sure I get the cashback, because it's usually so little money (less than a dollar a day) that I don't bother to to check or follow-up.
All else being equal, I book with Thrifty, since the Blue Chip program has a satisfaction guarantee: if you're not wholly satisfied, you get your first day free--although I have never actually used that benefit).

I, too, would book the corporate store, all else being (mostly) equal. In BOS, though, Dollar is more popular due to its closer location to the airport--Thrifty really is kinda out in the sticks. I do pick Thrifty, though, usually, since not only is it corporate, the rate is usually a little lower, too.

At SEA, Dollar was closer until the new CONRAC facility opened. Now that it's open, they're both equally an insanely long haul from the terminal. ;)

Looks like it is time to resurrect this thread as Hertz has announced they will purchase Dollar/Thrifty for 2.6bn. http://www.chron.com/business/article/Hertz-will-buy-Dollar-Thrifty-for-2-6-billion-3816889.php

With respect to Hertz filling a value/leisure niche, they are already doing this through Priceline. Rental cars tend to be one of the few items I am willing to "name my own price" on leisure trips because they are largely similar at the major brands. At least a couple of times searching on Kayak, Hertz has been far and away the most expensive rental, and I have named my own price --- something like 1/3 of the Hertz price (maybe 2/3 of the Dollar/Thrifty price) and ended up with a rental at Hertz.

Its really not surprising to see that Hertz is trying to buy DTG. The company made $88 Million (EBITDA) last quarter and a lot of people are "wallet conscious" now days. You have to realize that a lot of Dollar, Thrifty, and Co branded locations are mostly concentrated at airports, you wont really find too many that are local branches unlike Hertz, Enterprise, Avis, Budget who have different locations in various hotels, Sears (Avis Budget), etc. Also they tend to run cars at a much higher mileage than other places.

I wonder if this goes through, if/how the FL driveout would be affected. Previously, Dollar/Thrifty would offer midsize cars for $1/day plus tax from FL to the Mid Atlantic, Northeast, and Midwest. Hertz would offer something like $5/day for a compact, from and to almost the same places, often more, because of their neighborhood stores.

So there was competition, and trade-offs. $5/day to return to the HLE near your home, possibly pick up at a FL HLE and save on taxes? Or $1/day for a bigger car, but airport pickup only, and may need to drive further away to return the car at your closest airport?

Would Hertz now want to compete with itself? Maybe, if there will still be the appearance of separate companies with separate lots.

I wonder if this goes through, if/how the FL driveout would be affected. Previously, Dollar/Thrifty would offer midsize cars for $1/day plus tax from FL to the Mid Atlantic, Northeast, and Midwest. Hertz would offer something like $5/day for a compact, from and to almost the same places, often more, because of their neighborhood stores.

So there was competition, and trade-offs. $5/day to return to the HLE near your home, possibly pick up at a FL HLE and save on taxes? Or $1/day for a bigger car, but airport pickup only, and may need to drive further away to return the car at your closest airport?

Would Hertz now want to compete with itself? Maybe, if there will still be the appearance of separate companies with separate lots.

They will probably still have deals like that, its cheaper to have the customers move the cars (when the slow tourist season hits FL) instead of loading them on semi's and paying different firms hundreds of dollars to move them. Although the price might be more like $5 dollars.

I'm still amazed the Dollar/Thrifty could really be worth more than $2 billion. Do they really have loyal customers? Who are they? There's just no real reason to rent from them -- except price.

While I rent a lot of cars, I think I only use Dollar/Thrifty once or twice a year. I do make a lot more reservations with them, though. Whenever I book an airline ticket that I'll need a car rental for, I always book the car rental at the same time (just in case car rental rates go up). When this is a few months in advance, Dollar/Thrifty is often the cheapest. As it gets closer to the rental day, other companies tend to get more competitive (or I use Priceline), so I rarely actually use my Dollar/Thrifty reservations (since I do appreciate the option, I do cancel the rezzies I don't use).

Earlier this month, I did actually rent from Dollar at PHX because nobody else (including Priceline) ever became competitive with them. I didn't like my experience at the counter: it was much more hard sell than what I'm used to at the competition. A day after I got the car, I realized there was a pretty large scratch on the front bumper (I didn't notice it in the dark garage). I then worried a bit that I'd be hassled about it when I returned the vehicle -- Dollar/Thirfty is more likely to hassle you than the big boys -- but my concern was unfounded. Still, it reminded me why I don't like to rent from them (even though their cars are about the same as the other agencies).

My immediate future car rental needs will probably not call for Dollar/Thrifty. There are lots of promo rates available this fall. Like I just got a full size at SAT on Priceline for $10/day, and a compact direct from Hertz at PDX for $13/day. I swear, I started renting cars back in the '80s, and I don't think the rates have really gone up since then (the taxes have, though!). Given this reality, I can't imagine why anyone would pay more than $2 billion for a third tier car rental company which has no brand loyalty.

I can't imagine why anyone would pay more than $2 billion for a third tier car rental company which has no brand loyalty.

I agree. I just rented from Thrifty literally for the first time (based solely on needing a low price) and the experience was fine, but the shuttle took a bit long to come, so I won't be back again until they have the lowest price. Most of the other customers looked like tourists who are undoubtedly also picking the lowest price.

I think this is more about placing upward pressure on prices through consolidation.

If you join the Dollar/Thrifty frequent renter programs, the T&Cs state they will not hassle you on insurance.

I agree. I just rented from Thrifty literally for the first time (based solely on needing a low price) and the experience was fine, but the shuttle took a bit long to come, so I won't be back again until they have the lowest price. Most of the other customers looked like tourists who are undoubtedly also picking the lowest price.

I think this is more about placing upward pressure on prices through consolidation.

You would think this would be the case -- and consolidation certainly has raised airline fares -- but, so far, I've never seen consolidation impact car rental pricing. This is remarkable because there already IS a lot of consolidation: Enterprise owns National/Alamo, Avis owns Budget, etc.

And, of course, if Hertz raises Dollar/Thrifty's prices, what would be the point of running these companies? To truly raise prices and reduce costs, you'd want to shut these businesses down. Like United doesn't compete with Continental.

If you join the Dollar/Thrifty frequent renter programs, the T&Cs state they will not hassle you on insurance.

Interesting. I guess I should join. I've never bothered, because I use them seldomly.

You would think this would be the case -- and consolidation certainly has raised airline fares -- but, so far, I've never seen consolidation impact car rental pricing. This is remarkable because there already IS a lot of consolidation: Enterprise owns National/Alamo, Avis owns Budget, etc.

Once this goes through (and there's a 90% chance it will), there will be three rental companies operating eight brands. Unfortunately, the vast majority of the public will continue to believe there are eight companies competing for their business.

Interesting. I guess I should join. I've never bothered, because I use them seldomly.

Five minutes to join can save 20 minutes--or more, at some really busy and perennially understaffed locations (like LAS)--waiting in line and going through the rental process. No reason not to.

Once this goes through (and there's a 90% chance it will), there will be three rental companies operating eight brands. Unfortunately, the vast majority of the public will continue to believe there are eight companies competing for their business.

But despite the common ownership, most of the brands DO seem to compete against each other, even when they share a counter. Like this summer, I rented a car from "Budget" at FRA (because it was the cheapest) even though there really is no "Budget" there (it's Avis). Alamo and National almost always have different rates everywhere in the USA.

Dollar/Thifty is a little unusual in this regard because they almost always have the same rates. Any chance that Hertz will start making them compete against each other? :)

Or maybe they will have the same rates as Hertz. :td:

But despite the common ownership, most of the brands DO seem to compete against each other, even when they share a counter. Like this summer, I rented a car from "Budget" at FRA (because it was the cheapest) even though there really is no "Budget" there (it's Avis). Alamo and National almost always have different rates everywhere in the USA.

Dollar/Thifty is a little unusual in this regard because they almost always have the same rates. Any chance that Hertz will start making them compete against each other? :)
Plans are right now to continue operating the brands independently (both until the targeted October acquisition as well as for the foreseeable future afterwards). Of course, there will be some back-end infrastructure deduplication, but it will likely be run similarly to how Alamo and National are run by Enterprise.

The brands aren't really competing for each other. They are competing for different segments of the market. Alamo and Budget compete for the leisure traveler looking for lower rates. National and Avis compete for the business traveler looking for full service. Is there overlap? Of course, but by holding two brands, they can attempt to cover the full spectrum of the market without compromising their own brand identity.

I suspect it will remain the same for Hertz. They bought the Dollar Thrifty brands because they believed they were strong brands that would help them enter the value market much better than they were able to with Advantage. However, as I just said, brands do overlap (sometimes--although rarely ;)--Hertz offers low rates to get cars moving out on the road, and sometimes Dollar and Thrifty raise their rates when demand is high), and so there still is the potential for the consumer to lose with fewer real choices.

It's funny to see what Hertz considers the difference between the two brands. Here, we all know they are identical. Heck, inside DTAG, they can't even figure out the difference between the brands (except that taking up two columns on Travelocity seems to get them more reservations). But Hertz is claiming that Dollar is aimed towards the value-seeking business market and Thrifty is marketed more towards the discount budget traveler. Maybe they are, but it ain't workin' that way in practice. ;)

It's funny to see what Hertz considers the difference between the two brands. Here, we all know they are identical. Heck, inside DTAG, they can't even figure out the difference between the brands (except that taking up two columns on Travelocity seems to get them more reservation). But Hertz is claiming that Dollar is aimed towards the value-seeking business market and Thrifty is marketed more towards the discount budget traveler. Maybe they are, but it ain't workin' that way in practice. ;)

Yeah, I noticed it, too. If you offer the same service at the same price, how is the customer supposed to know there's a difference? I guess if you spent a lot of money on advertising, they might form different impressions, but otherwise it just seems exactly the same.

Of course, other travel companies operate the same way. I love when Choice Hotels tries to explain the difference in their dozen or so different brands. The Wyndham hotel group is much the same.

I'm still amazed the Dollar/Thrifty could really be worth more than $2 billion. Do they really have loyal customers? Who are they? There's just no real reason to rent from them -- except price.

Earlier this month, I did actually rent from Dollar at PHX because nobody else (including Priceline) ever became competitive with them. I didn't like my experience at the counter: it was much more hard sell than what I'm used to at the competition. A day after I got the car, I realized there was a pretty large scratch on the front bumper (I didn't notice it in the dark garage). I then worried a bit that I'd be hassled about it when I returned the vehicle -- Dollar/Thirfty is more likely to hassle you than the big boys -- but my concern was unfounded. Still, it reminded me why I don't like to rent from them (even though their cars are about the same as the other agencies).

Given this reality, I can't imagine why anyone would pay more than $2 billion for a third tier car rental company which has no brand loyalty.

IAHPHX, you answered your own question. They do a lot of Hard sell on the insurances, GPS, Toll Devices, etc. and they really scrutinize the damages on the car ... thus making a profit on the said damages. As I said in an earlier post the vehicles are run at a higher mileage than other places, so they get A LOT more worth out of the car than they bought it for, remember that not everyone is paying the same low rate and different markets will have different prices. Also Dollar/Thrifty doesn't really advertise like the other companies do nor do they have the infrastructure like Hertz does. In fact Dollar-Thrifty has been making money the last couple of years, every quarter they announce that they surpassed the earnings for the same quarter of the previous year.

Really as long as your making money who wouldn't want to buy you? Notice that Avis was previously (if not currently) trying to acquire Dollar Thrifty.

As I said in an earlier post the vehicles are run at a higher mileage than other places, so they get A LOT more worth out of the car than they bought it for

I was actually wondering why there isn't a scheme like this: High end brand (aka Hertz) buys new cars and rents them until they have 10k or 20k miles, then transfers them to low end business unit (aka Dollar/Thrifty) who rents them until they have 30k or 40k miles. Then you have product differentiation and can more successfully segment the market between premium and value customers. If I knew this was going to happen I would definitely go to Hertz, and maybe Hertz will do this. However, it seems like with the other combined companies they just use the same fleet and pretend to be separate entities. I did a rental at Alamo recently, via Priceline, that was literally the same cars as National. I printed my contract at the Alamo kiosk and they pointed me to the row of cars marked "National/Alamo".

I was actually wondering why there isn't a scheme like this: High end brand (aka Hertz) buys new cars and rents them until they have 10k or 20k miles, then transfers them to low end business unit (aka Dollar/Thrifty) who rents them until they have 30k or 40k miles. Then you have product differentiation and can more successfully segment the market between premium and value customers. If I knew this was going to happen I would definitely go to Hertz, and maybe Hertz will do this. However, it seems like with the other combined companies they just use the same fleet and pretend to be separate entities. I did a rental at Alamo recently, via Priceline, that was literally the same cars as National. I printed my contract at the Alamo kiosk and they pointed me to the row of cars marked "National/Alamo".

Good idea on paper, but Hertz is now running cars about as old as Dollar Thrifty does (at least I've gotten some 40,000-mile cars from Hertz). Dollar Thrifty recently authorized their fleet folks to keep cars upwards of 60,000 miles, although I have yet to see some cars actually make it up that high yet.

Enterprise serves as the dumping ground for Alamo National's older cars, after which point Enterprise does a pretty good job of selling them.

Good idea on paper, but Hertz is now running cars about as old as Dollar Thrifty does (at least I've gotten some 40,000-mile cars from Hertz). Dollar Thrifty recently authorized their fleet folks to keep cars upwards of 60,000 miles, although I have yet to see some cars actually make it up that high yet.

Usually its the Minivans, Suburbans, Tahoes, etc that are being run that high, cars are about 45-55K depending on the timing on which new cars will come in. You really cannot keep a car for too long, a lot of problems will start showing up. Even though cars are becoming more reliable and lasting longer it gets expensive when you have to change tires every so often and after continuous use of a car it starts wearing down, especially when some people don't/did not realize that the car needed an oil change 2,000 miles ago after they have driven it for a couple of weeks, etc.

Im pretty sure that Hertz will mostly utilize the newer cars and as time/mileage goes along it will be passed to Dollar and Thrifty. From my personal experience I have never gotten a car more than 20,000 mi from Hertz... yet and hopefully they will keep it that way ;)

Do they even make enough money to be worth $2 Billion dollars?? I mean Dollar and Thrifty are not really everywhere. I can maybe see 1 Billion. I had a not so great experience the last (only) time I had to rent from thrifty. :rolleyes:

Do they even make enough money to be worth $2 Billion dollars?? I mean Dollar and Thrifty are not really everywhere. I can maybe see 1 Billion. I had a not so great experience the last (only) time I had to rent from thrifty. :rolleyes:

Hertz is paying a lot of money to get rid off a competitor so Hertz itself can raise the price.