Specialist
Former Senior Director, Global Strategy at Avis Budget Group Inc
Agenda
- Trends and developments in the car rental industry affecting Avis Budget Group (NASDAQ: CAR)
- Competitive dynamics including Hertz’s (OTC: HTZGQ) partnerships with Tesla (NASDAQ: TSLA), Carvana (NYSE: CVNA) and Uber (NYSE: UBER)
- Demand outlook and near-term supply-chain-related headwinds
- Outlook for Q4 2021 and beyond – sports rights fee trends and Sinclair’s sports betting opportunity
Questions
1.
Could you start by sharing 2-3 key trends or developments you’ve been following in the car rental industry?
2.
How has the car rental industry performed through coronavirus and what is your market outlook for 2022?
Do you expect longer-lasting or permanent impacts on the industry arising from the pandemic?
3.
How are you forecasting the eventual recovery in business travel and the resulting impact on results?
4.
To what extent would structurally lower business travel post-pandemic impact the industry utilisation
rate?
5.
How important was international inbound business as a percentage of Avis’s transaction days prepandemic?
6.
What levers are at Avis and Hertz’s disposal to offset the falling utilisation rate and the reduction of
inbound business travellers?
7.
We’ve heard about industry partnerships such as Hertz with Uber, Tesla and Carvana. Are Avis and Hertz
interested in shifting towards becoming mobility companies with these partnerships rather than just rent-acar companies, and how would they execute?
8.
How is Avis evaluating EVs [electric vehicles] for its fleet? What does Hertz’s Tesla partnership mean for
Avis?
9.
Could you frame the competitive landscape with Hertz and Avis, but also Turo, Revel and some of the ridehailing companies? Where is Avis positioned in the stack?
10.
Would you describe the industry as an oligopoly, and do you expect it to become a functional oligopoly in
the future?
11.
You said Enterprise is the largest of the major four players. Does it have a cost advantage over Avis and
Hertz?
12.
What are the characteristics of industry winners and losers in the post-pandemic environment, and which
players best embody those characteristics?
13.
Avis’s fleet size in the Americas has recovered meaningfully. Is it fair to assume supply can normalise
before the semiconductor shortage is resolved, given rental companies can buy used cars and hold on to older
models longer? What are your thoughts on Avis’s fleet sourcing?
14.
Could you break down Avis’s relationship with the OEMs [original equipment manufacturers] it sources
from? Might the OEMs prioritise certain segments over others?
15.
How would you grade the relative health of Avis’s fleet?
16.
What are the advantages or disadvantages of Hertz’s partnership with Carvana? Why can’t Avis just do the
same thing? What is the idea around selling these cars?
17.
Does the direct-to-dealer model make sense? How might the channels for selling used vehicles evolve?
18.
Avis’s management discussed some of the developments in its digital platform, QuickPass. Do you expect
margin benefits or incremental growth from this initiative? What are your thoughts on this development?
19.
What are your thoughts on M&A in the market? Is there any consolidation on the horizon, and are there
any obvious or attractive targets for Avis to bring into the fold?
20.
Could you summarise a best- and worst-case scenario for Avis over the next 12-18 months?