Avis Bets Antiseptic Aroma Can Revitalize Rental-Car Demand
(Bloomberg) -- Avis Budget Group Inc. once sprayed a faux new-car leather scent into its rental cars for a fresh aroma, but now it’s spritzing them with an antiseptic to ease customer fears of viral contamination.
“For many years we used a product that replicates a new-car smell,” Chief Executive Officer Joe Ferraro said in an interview. “Now people want their senses to tell them that their car is safe, that it smells and looks clean.”
Avis has teamed up with Reckitt Benckiser Group Plc, the maker of Lysol, to give its disinfection protocols a boost and is starting to promote the partnership to consumers. The company will begin replacing or supplementing other cleaning products with the widely recognized brand as it emphasizes antiviral clean-car measures in its marketing.
The rental car provider is publicizing its anti-Covid measures -- which include wiping down or spraying 15 key touch points in its vehicles -- in hopes of drawing a bigger share of leisure travelers from rivals including Hertz Global Holdings Inc. Ferraro said customers increasingly are coming back to rent cars despite the coronavirus pandemic and want to have the sense a car has been sanitized when they pick one up.
Avis shares rose 3.9% to $27.88 as of 10:45 a.m. in New York. The stock is down about 14% this year.
The company said on its first-quarter earnings call that revenue fell 80% in April and May but was expected to bounce back in June. There are some signs a recovery is underway, despite countervailing signals in the travel industry that an anticipated rebound may fizzle.
Website traffic for rental cars was down 21% year-over-year in June from a year ago after falling 28% in May, said Jefferies analyst Hamzah Mazari in a July 8 research report. Even so, rental inquiries were up 33% over January while flight travel is still way off, indicating that leisure travelers are driving more to get to vacation spots.
Avis may be able to grab market share from Hertz since that company’s management is more focused on exiting bankruptcy, Mazari said.
Avis is ready to serve any defecting Hertz customers, Ferraro said, but attracting business in the current environment is all about providing a germ-free experience.
“If people feel they are in a safe environment, they will travel,” Ferraro said.
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