Rental Car History: More Revenue Now Generated in Neighborhoods Than at Airports; Industry Grows to Nearly $18 billion Overall

TORRANCE, Calif.--Jan. 24, 2006--For the first time in history, the non-airport rental car market has grown larger than the airport market in total yearly revenue, marking broad implications within the industry, as well as for state and local governments, Auto Rental News reports in its January-February edition.

Total industry revenue in 2004 reached $17.6 billion, with $9.5 billion generated in neighborhoods - or home cities - and $8.1 billion at airports, according to Auto Rental News.

Enterprise Rent-A-Car, which pioneered the non-airport rental trend and continues to drive it with more than 5,500 local branches in the United States, confirmed the findings. Hertz also recently acknowledged the shift in industry balance during a public presentation.

In its 1994 Fact Book, Auto Rental News reported the industry's overall revenue at $10.7 billion in 1991, with airport rentals dominating the industry at $8.1 billion and the local market generating $2.5 billion. However, the industry's eye-popping 65 percent overall growth during the next 13 years was driven by the local market, which more than tripled in size while the airport market remained basically flat.

"What you're seeing is that Americans are using rental cars in their home towns for many needs well beyond replacing their own vehicle while it's in the shop," said Patrick Farrell, vice president of Enterprise Rent-A-Car. "For example, consumers are renting in neighborhoods for corporate needs, driving vacations, an extra car, or a different kind of car."

However, a different trend could threaten the non-airport rental growth. The rental car industry is consistently targeted for tax increases to fund public projects, particularly stadiums, arenas and cultural facilities. Local politicians have been able to sell their constituencies on the fact that the taxes would hit visitors, and that they wouldn't pull from the pocketbooks of local constituents.

With non-airport rentals making up the majority of the total industry, the general public cannot assume that rental taxes will, by default, fall to the responsibility of tourists. And car rental operators, which have been ever vigilant and aggressive towards fighting those taxes, now have something with which to arm themselves.