- The Washington Times - Monday, February 10, 2003

From combined dispatches
Car rental companies that once counted on deep-pocketed corporate jet-setters to boost the bottom line are now looking to leisure travelers and other markets amid a two-year slump in business travel. Kenyon McAfee is just the type of customer these companies want to attract.
In May, the transmission in Mr. McAfee's Nissan Pathfinder blew out, and the data analyst could not afford the $1,500 replacement. He made it from the District to his workplace in Rockville by Metro, but began renting all types of vehicles from Enterprise Rent-A-Car on the weekends to run errands and attend church services.
The rentals also come in handy for his second job working at Crate & Barrel in Spring Valley, Md., on Saturdays and for his part-time gig as a handyman to residents in Rockville.
At $96 per weekend, the rentals have cost him about $4,000 thus far, but Mr. McAfee says he has saved more in spacing out smaller payments and not having to deal with insurance and monthly car payments.
To help find customers like Mr. McAfee, many companies are expanding into residential areas, increasing the number of sport utility and other luxury vehicles in their fleets, cutting down on the paperwork and making last-minute rentals easier.
Budget Rent a Car is trying to lure travelers with weekly "Last Minute" rates that start at $13.99 per day if they book online via the company's Web site, www.budget.com. Hertz has similar programs on its site, www.hertz.com. It also has a "Suburban Location" promotion, which will last through March 31, with daily rates starting at $19.
This effort to move into residential markets began in earnest about two years ago when the economic downturn hit business travel, a decline that worsened after the September 11 terrorist attacks. The slump left in bankruptcy about 25 percent of the rental car market being operated by companies. This includes Avis and Budget, owned by Cendant Corp., and National and Alamo, owned by ANC Rental Corp.
But with business travelers becoming less prominent at rental car counters, vacationers have started lining up, reserving SUVs for family vacations or weekend getaways to save wear and tear on their personal vehicles or to avoid driving their less-dependable cars.
More families are opting to own one car and rent a second when needed, said David E. Cole, director of the Center for Automotive Research, which studies automotive industry issues.
"They could spend thousands of dollars on rentals and still be ahead," Mr. Cole said. "Instead of putting $20,000 into buying a new car, that money could earn 5 or 10 percent interest. They don't have to deal with depreciation costs, insurance costs and other fees."
Flexcar, a Seattle car-sharing company, meanwhile, is offering residents in the Washington metro area rentals for quick jaunts. Flexcar renters order a car at one of 25 locations and pay for vehicle use on an hourly basis.
The program has grown in a year and half from 450 renters to nearly 2,000, said Neil Peterson, Flexcar founder and chief executive officer. He expects 4,000 renters to avail of this service by the end of the year. The company has expanded its local fleet to 45 cars, 10 of which are hybrid vehicles.
At Enterprise, the number of leisure rentals has increased by double digits every year, said Derek Schafran, a regional rental manager. For the past five years, its neighborhood rentals have experienced an annual growth rate of about 12 percent nationally.
Avis also is increasing its presence in the suburban setting by teaming up with Sears Auto Centers. Avis renters can pay with a Sears credit card and pick up the cars at locations in Alexandria, Bethesda, Rockville and Gaithersburg, said Ted Deutsch, Cendant spokesman.
In addition, Avis has trained its managers and some agency operators to properly install child-safety seats in its vehicles, Mr. Deutsch said, with the aim of appealing to families with young children. Avis, which has a local fleet of about 2,000 cars, has quadrupled its stock of SUVs in the past five years, he said.
Hertz, which used to get 90 percent of business from airport travelers, also is offering more.
The company has expanded its selection of high-end vehicles to include such luxury cars as Jaguars, Lincoln Navigators, Land Rovers and Volvos for $75 to $125 per day, said Paula Stifter, a spokeswoman for Hertz.
Global positioning systems are being placed in some luxury and midlevel cars. And, as of Dec. 1, some Hertz cars also will include satellite radio, she said.
Most car rental agencies also are offering some type of no-hassle plans by which customers can simply call in their reservation and pick up the car without having to fill out lengthy paperwork or sign a bunch of documents.
Marguerite Higgins in Washington contributed to this report from the Raleigh, N.C., News & Observer.

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