If Hertz's CEO Sees Green Shoots, We Should Pay Attention

We’ve seen continuous improvement every single week for the last 10 weeks in the US rent a car space on improving demand for the summer season.

We’ve been buying a lot of cars the last 8 weeks…. We’re scrambling to buy as many cars as we can.

- Mark Frissora, CEO, Hertz, this morning on Squawk Box

Hertz’s (HTZ) CEO was really bullish Thursday after his company pre-announced better than expected 2nd quarter earnings on improving demand for rental cars. The company forecast an 11.4% increase in car rental transaction days year over year for the 2nd quarter on top of 13.4% in the first quarter. He told CNBC that Hertz has bought 16,000 US vehicles for $350 million in the last 8 weeks.

This is the first I’m really hearing from a CEO in an economically sensitive business whose seeing real demand improvement. Not sure I believe it but have to pay attention to it.

Hertz shares shot up 16% today on strong volume.

Comments

[Mr. Ed, Jr.:]

Yes, but it is not business travel, according to Frissora.

He states that consumers are taking advantage of drastically reduced hotel/vacation packages, and are even staying in their own country.

So, it is just due to the tremendous bargains offered by a leisure travel industry that is in bad shape. A real cheap vacation.

The consumer will not spend unless something is practically being given away. It looks like the same thing that is going on with casual dining restaurants in the US, in this NY Times story (The comment about the customers stiffing the waiter was telling)

www.nytimes.com/2009/0...


It appears to be more of the same non-green shoots consumer behavior that almost every industry is seeing.

Hertz was trying to get TARP money a few months ago. But, if people want to send that stock up 16% on this, well....

Jun 28 04:17 AM

[Reefwalker:]

I'm a Hertz Gold Club member and regular user of their services for my business travel. My last name starts with a V and the last several times that I've used them, my name has been listed on the first of several large LED boards with member names and rental car locations. A couple of years ago, I had to routinely wait for the boards to refresh because there were so many rentals. Perhaps this trend is happening in other cities, but I haven't seen it in the Western US where I travel.


On Jun 28 04:17 AM Mr. Ed, Jr. wrote:

> Yes, but it is not business travel, according to Frissora.
>
> He states that consumers are taking advantage of drastically reduced
> hotel/vacation packages, and are even staying in their own country.
>
>
> So, it is just due to the tremendous bargains offered by a leisure
> travel industry that is in bad shape. A real cheap vacation.
>
> The consumer will not spend unless something is practically being
> given away. It looks like the same thing that is going on with casual
> dining restaurants in the US, in this NY Times story (The comment
> about the customers stiffing the waiter was telling)
>
> www.nytimes.com/2009/0...;ref=business
>
>
>
> It appears to be more of the same non-green shoots consumer behavior
> that almost every industry is seeing.
>
> Hertz was trying to get TARP money a few months ago. But, if people
> want to send that stock up 16% on this, well....
>
>
>
>

Jun 28 04:05 PM

[buoy:]

Another reason to buy new cars, fire sale prices.

Jun 28 05:42 PM