Continuing with its commitment toward enhancing rental
experience for its customers and making travel more convenient,
Avis Budget Group Inc
. (
CAR
) recently announced the kickoff of its
Avis Preferred(R) Select & Go
at 25 airports across the United States. However, only the
customers registered with the company's express rental program -
Avis Preferred, can avail this service.
In June 2012, one of the world's best vehicle rental service
providers, Avis Budget, introduced this vehicle selection service
with a mission to cover 50 airport locations around the United
States and Canada by the end of the year 2012.
According to the company, under the Select & Go service,
customers can avail three unique facilities. Firstly, with the
start of this service, members of Avis Preferred will now be able
to keep and drive their pre-assigned vehicle directly from the
airport. Secondly, if members want to exchange their car from a
designated area, they can do so without any additional charges. And
thirdly, if members wish to upgrade their vehicle from a designated
area, they can do so by just paying the additional amount.
The main motive behind the facilities offered is to ensure that
the members do not have to visit the rental counter of the company.
The members will be able to collect their selected vehicle just
outside the airport by showing their valid driving license to an
Avis' personnel.
The company has always tried to take advantage of the other
inbound revenue opportunities by focusing on new ideas and
investments in its brands and technology upgrade. The company has
installed virtual car rental technology in over 25,000 vehicles.The
technology permits travelers to reserve, pick up and return rental
vehicles through their smart phones. Additionally, they also get an
automated electronic receipt after the completion of rental,
enabling the company to minimize cost while enhancing
profitability.
Our Recommendation
Avis follows a core global strategy of partnering with leading
travel brands to expand its customer reach while creating
additional demand. The company recently made its first appearance
in Taiwan, in an effort to expand its Asian operations. Avis
Budget's decision to enter Taiwan is backed by growing car rental
demand on the island as well as its speeding economic growth.
Moreover, in order to expand its geographical presence, the
company is pro-actively looking for strategic acquisitions and
alliances to enhance its growth opportunities. The recent
acquisition of Avis Europe is one of the major steps taken by the
company to enhance its operational foothold in global markets,
especially in China and India.
However, significant exposure to foreign currency translations
and heavy dependency on third party distribution channel remains
causes of concern. Moreover, due to intense competition from other
established players, such as
Hertz Global Holdings Inc
. (
HTZ
) and
Dollar Thrifty Automotive Group Inc
. (
DTG
), the company may find it challenging to maintain the same level
of operating performance.
Currently, Avis Budget has a Zacks #3 Rank, which signifies a
short-term Hold rating on the stock.
Avis Budget Group is the leading general-use vehicle rental
company in North America, Australia and New Zealand. Moreover, with
a formidable network of more than 10,000 rental locations and
350,000 vehicles, the company boasts a well-established position in
a highly competitive vehicle rental industry.
AVIS BUDGET GRP (CAR): Free Stock Analysis
Report
DOLLAR THRIFTY (DTG): Free Stock Analysis
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HERTZ GLBL HLDG (HTZ): Free Stock Analysis
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