Hertz Global Holdings’ second-quarter corporate business volume reached about 70 percent of 2019 levels, company CFO Kenny Cheung said during a Thursday earnings call. International inbound volume was at about 40 percent, and both segments were up modestly versus the first quarter, he added.
Corporate rates also sequentially were up by roughly 28 percent to 29 percent, said Hertz CEO Stephen Scherr. During the company’s 2021 fourth-quarter earnings call, Scherr had mentioned that because of the company’s bankruptcy filing, it had been able to eliminate or renegotiate “almost all” of its corporate contracts. He elaborated a bit on that during Thursday’s call.
“As we look at renegotiation with corporates on contract renewals, we are seeing about a 97 percent retention of those accounts,” Scherr said. “They are almost all renewing at a higher rate relative to where the older contract was. So those are obviously very good signs in the context of what corporate could produce for us.”
In addition, the company continues to work with American Express Global Business Travel “to enhance our share across its customer portfolio,” Scherr said. “As corporate travel has been rebounding, June generated more than two times the revenue we recorded from Amex in January, and we expect this momentum to continue.”
Scherr added that Hertz expects to leverage Amex GBT’s 2021 acquisition of travel management company Egencia “to accelerate our capture of the profitable midmarket travel segment,” he said. “Overall, we anticipate the corporate segment to grow, particularly as more companies return to travel.”
Q2 Results
Hertz reported second-quarter total revenues of $2.34 billion, up 25 percent from $1.87 billion a year prior. Adjusted net income was $520 million, compared with $408 million in Q2 2021.
Car rental transaction days were 35.4 million, up 19 percent year over year from 29.9 million. Revenue per transaction day was $66.66, up 7 percent year over year from $62.22. U.S. RPD was $67.67, up from $65.70 a year prior. International RPD improved 39 percent from Q2 2021 to $61.96 from $44.45.
Hertz continued to see strong demand for its electric vehicles, with about 160,000 transaction days during the quarter using Tesla cars, Scherr said. He added that EVs command premium rates that are between $30 and $35 in excess of comparable average rates, and the company continues to take delivery of more Teslas and now Polestar cars as well. The company currently has about 20,000 active EVs in its fleet, according to Scherr.
He added that Hertz is in negotiations with other original equipment manufacturers “to purchase EVs with attractive price points.”
Further, Scherr said that corporates “want to satisfy their own carbon-footprint objectives, so they are compelling employees to get into EVs. Therefore, there is this incremental demand.”
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