Las Vegas auto rentals picking up

Monday, Feb. 25, 2002 | 11:06 a.m.

McCarran International Airport's car rental concession, down about 17 percent in revenue in the last four months of 2001, is slowly recovering from the downturn generated by the Sept. 11 terrorist attacks.

One local franchise holder said business is almost back to normal and advanced bookings for March and April are encouraging.

Statistics reported to the Commercial and Business Development Department show McCarran's eight on-airport and two off-airport car rental vendors generated $52.1 million in gross revenue from September through December compared with $63 million in the same period a year earlier.

Before the attacks, the rental companies were riding three straight months of revenues higher than the previous year leading up to September, turning around a slump brought on by business travel downturns.

September receipts were off 11.7 percent to $14.1 million, with only two of the 10 companies showing an improvement from the previous September. Representatives of the two companies that improved -- Dollar Rent a Car and National Car Rental System Inc. -- would not comment on their revenues, which were provided by the airport.

Some representatives of the industry said they had to reduce their fleets and staffs nationwide, while not disclosing specific layoffs in Las Vegas. Only the president of Thrifty Car Rental's Las Vegas franchise would acknowledge local layoffs.

"What the Sept. 11 tragedies did to us in the month of September was catastrophic," said Steven Neudorff, who operates the Las Vegas office. "We were forced to go through some downsizing, by about 20 percent."

Neudorff said he could not disclose the number of employees the company has in Las Vegas, but said nearly all of them are back to work.

"Basically, since the first of the year, we've seen the market resume some sense of normalcy," Neudorff said. "We've seen an uptick in 2002 and the buzz in the local industry is things have improved."

Neudorff said the rebound has been convincing enough to rehire some laid-off employees and replace others who had found other employment.

McCarran's market leader, Hertz Corp., also has seen gradual improvement.

"We were slightly down from a year ago when the attacks occurred," said Paula Stifter, a spokeswoman for Park Ridge, N.J.-based Hertz. "Things have been increasing ever since then, but they still haven't reached pre-Sept. 11 levels."

Stifter, who said she could not comment on specific local market conditions, said a full recovery has been slowed because of less traffic at the nation's airports. She acknowledged conditions could be better where air traffic is rebounding faster, such as Las Vegas.

The downturn in business also is softened by the fact some people are taking rental cars on trips instead of flying.

"There does appear to be a bit of evidence that people are driving instead of flying and we've seen an increase in rentals at our suburban and downtown locations," Stifter said.

That phenomenon is what has kept Enterprise Rent-A-Car thriving through the downturn. St. Louis-based Enterprise, a privately held company, specializes in insurance and dealer-replacement rentals.

In Las Vegas, where the company has 35 suburban outlets, Enterprise revenues were down from the previous year in September, but up in October, November and December.

Car rental companies saw the worst of the damage in October, weathering September with an above-average number of one-way rentals. Most of those were taken by customers stranded in cities after airports were closed by the Federal Aviation Administration immediately after the attacks.

"We rented tens of thousands of one-way cars," Stifter said. "Usually, we'll get a handful of those types of rentals at each location, so it's not a common request."

Recent car renters at McCarran noticed shorter lines at the airport car rental counters in the weeks immediately after the terrorist attacks and said that entered into the decision to use a car instead of public transportation.

"If I can, I almost always use public transportation when I travel out of town," said Cheryl Abney, Lawrence, Kan., a travel agent who was in Las Vegas to meet a friend.

"I think we would be doing terrorists a favor if we stayed at home and didn't go on trips and spend money," she said while in line at the Thrifty counter. "I think you need to take your vacation and go to your conventions.

While some car rental agencies had stronger-than-expected sales during the Thanksgiving and Christmas holidays, others looked at 2002 as the first opportunity to rebound.

One company, Payless Car Rental System Inc., offered an Internet special on compact cars to ring in the new year -- rentals for $20.02 a day.

And, America West Airlines, through its America West Vacations tour packaging operation, is partnering with Avis Rent A Car System Inc. on a free rental car promotion in Reno, Los Angeles, San Francisco, San Diego, Orange County, Calif., and Orlando, Fla.