Your price-sensitive clients want a vacation, but they also want to save on expenses. One way to cut costs is to book their car rental at off-airport locations instead of at the airport. Why is that less expensive? Off-airport locations don’t charge airport fees, which can dramatically reduce the total charge of a rental. State and local governments add taxes to all car rentals to draw income from travelers as a way of funding local projects. But airport locations add even more fees and taxes.

A Travelocity study on car rental taxes for 2006-2007 found that U.S. airports tacked on an average of 28.04 percent to the total cost of a car rental, compared with neighborhood car rental locations, which averaged only 14.9 percent of the final cost. Those daily fees can add up.

The National Business Travel Association (NBTA) this year released a list of single-day tax rates at airports. Cleveland (CLE) was tops at $20.75 a day in added taxes, followed by Dallas-Ft. Worth (DFW) at $18.97, Phoenix (PHX) at $18.71, Chicago (ORD) at $18.07, Charlotte (CLT) at $16.22, Milwaukee (MKE) at $16.06, Las Vegas (LAS) at $15.13, Seattle (SEA) at $14.81, Boston (BOS) at $14.43 and Nashville (BNA) at $14.15. By comparison, the five highest single-day tax rates at car rental destinations were: Chicago at $18.07; Phoenix at $16.71; Charlotte, N.C., at $16.22; Las Vegas at $15.13 and Seattle at $14.81.

The top five airports with the least expensive single-day tax rates: St. Louis (STL) at $5.99 a day in added taxes, followed by Detroit (DTW) at $6.13, Ft. Lauderdale (FLL) at $7.03, Ft. Myers (RSW) at $7.03 and Honolulu at $7.19. The top five car rental destinations with the lowest single-day tax rates: St. Louis at $5.93; Ontario, Calif., at $5.94: Orange County, Calif., at $5.94: Sacramento, Calif., at $5.94 and San Diego, Calif. at $5.94.

This year NBTA successfully helped to lobby against the imposition of new car rental taxes by state legislatures in Colorado and Florida. The Colorado proposal would have imposed a $6 per day fee on all car rental customers. The Florida proposal would have increased fees by $2 per day for customers renting cars at international airports in much of the state.

NBTA also helped defeat car rental tax proposals in Wisconsin in 2007 and Florida in 2006. “While there is often a misperception that car rental taxes only affect out-of-towners, research has shown that more than half of car rental customers are generally local,” NBTA said.

So which companies are known for off-airport locations? Enterprise Rent-A-Car, considered the king of the off-airport market, has dominated the neighborhood rental location market for decades. Of the more than 6,100 Enterprise car rental branches in the U.S., nearly 5,900 of those are off-airport locations. Over the years, however, other rental companies have opened more urban and suburban off-airport locations; they are seen as less susceptible to seasonal volatility and economic cycles, particularly now that airport locations have come under pressure as airlines have cut back on routes.

For the past several years, Hertz has concentrated on adding to its off-airport locations. During the first quarter of 2008, Hertz opened 81 new off-airport locations and 52 Hertz Local Edition rental car facilities. “The off-airport, suburban market is a $10 billion market, and Hertz is achieving double-digit revenue growth in that market,” says Mark Frissora, Hertz’s chairman and CEO. “The off-airport market is growing faster than the airport market and represents more than 10 percent of Hertz’s revenues.” Hertz plans to open a total of 150 to 200 off-airport locations this year. The company says it has more than 1,600 off-airport locations reaching customers in 50 metropolitan areas.

Avis Budget Group also has added hundreds of off-airport facilities in the cities and suburbs over the past few years. Dollar Rent A Car has more than 260 suburban and on-airport rental car locations across the U.S. And approximately 80 percent of Thrifty’s business is focused on the airport market, with 20
percent in the local market.

Ironically, as Hertz and Avis have made the biggest push into the suburban market, Enterprise, which also owns Alamo and National, has been growing rapidly at airport locations, in part because its price-sensitive leisure customers have demanded it, an Enterprise spokeswoman says. But in mid-August, Enterprise jump-started its neighborhood rental program by targeting cost-conscious weekend drivers with a 50-percent off weekend-rental promotion, effective through May 20, 2009.

The offer, which is not available at Enterprise’s airport locations, applies to economy through full-size vehicles, and is available at the company’s more than 6,000 neighborhood locations, which are located within 15 miles of 90 percent of the U.S. population. The discount applies standard weekday rates on rentals of three days, Friday to Monday, and doesn’t include taxes and other fees. By taking advantage of such offers, you can make yourself a hero to your clients by helping them save on their vacations. @

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