After nearly two years of declining quarterly revenue, Avis Budget Group since July 1 has had a new CEO and CFO, and on its Q3 earnings call they outlined their pivot for the company's strategy.
"One of the core initiatives of this leadership team is a hard reset on customer experience," Avis Budget CEO Brian Choi said. "'We try harder' is in our DNA. But during the survival years of Covid, we drifted from that bedrock principle. Now it's time to return to it with intent."
Choi described the new commitment to deliver consistency and dependability, "so that when corporate procurement teams choose a rental partner, they know Avis holds itself to higher vehicle standards than they require," he said.
"Or when families plan annual vacations, they know Budget won't waste their precious time waiting for a car."
He noted that in the rental car industry, "premium brands focus on commercial accounts. Value brands chase leisure customers, and the differentiation between those lanes is actually minimal," Choi said. "That's very different from how the airlines across their cabin classes and hotels across brands have approached segmentation."
He added, "The alternative path is to keep participating in the zero-sum game this industry has been playing for years, fighting over basis points of share and torching brand equity in the process. We have no interest in that. We are a service company, and dependability delivered at the best value proposition is what we stand for."
Avis' curbside Avis First product, launched in the U.S. in July and earlier this month in Europe, reflects that principle, Choi said. "Concierge coverage has expanded rapidly at our earliest airports in response to strong demand," he noted. "We've tripled our footprint from a dozen locations at launch to 36 today. … Our customers clearly see the value and are willing to pay for it. At a [rate per day] of over $100, Avis First proves that when we deliver consistent excellence, we earn both customer satisfaction and meaningful margin expansion."
Meanwhile, the headwinds related to vehicle recalls increased -- estimated at a full-year negative effect of $90 million to $100 million -- as did "declines in government business tied to the shutdown and softer commercial demand internationally," Avis Budget CFO Daniel Cuhna said.
Avis Budget Q3 results
Avis Budget reported third-quarter revenue exceeding $3.5 billion, a 1% increase year over year and the first time in eight quarters of earnings calls "where we get to say that our revenue was higher than last year's," Choi said.
Net income was $359 million, compared with $237 million one year prior.
Source: Business Travel News