A growing number of consumers are eschewing airport rental-car counters in favor of neighborhood and downtown outlets, due in part to changing rental habits and an interest in trimming costs.
Nonairport outlets represent roughly 40 percent of all U.S. rental-car business, said Neil Abrams, president of New York- based Abrams Consulting, which tracks the rental-car industry. That’s up significantly over previous decades.
Off-airport rental sites “are where the growth is,” Abrams said. “And that’s good for consumers because, as a general rule, it’s less expensive.”
According to the Abrams Travel Data Rate Index, a weekly index of eight major brands in 10 major markets, the airport rental rate index for a mid-sized car booked one week in advance was $50.68 daily, compared with $37.59 daily for an off-airport rental.
Consumers renting cars at Denver International Airport pay a $1.80 daily facility users fee and a 10 percent concession fee, in addition to the city’s 13.35 percent car- rental sales tax. DIA’s rental-car taxes and fees rank 20th nationally, according to the Denver Metro Convention & Visitors Bureau.
The convention bureau had proposed increasing the rental-car tax by another percentage point to fund tourism marketing, but Wednesday it dropped the request made to the city. Several rental-car companies complained that locals, rather than tourists, would end up shouldering much of the tax increase.
DIA is busier than average when it comes to car rentals. It was the country’s fifth-busiest airport last year, according to Abrams, garnering 83 percent of the city’s rental-car business.
Airport counters generate $250 million of the city’s $300 million rental-car revenues, according to the city’s Treasury Division.
“But at airports, the rental companies are fighting for the deplaning passenger, and that’s a finite number,” Abrams said. “Local market business is more of a frontier. You can create opportunities on every corner in every suburban or urban market.”
The largest market for local car rentals is loaner vehicles paid for by insurance companies, followed by extra household vehicles. To attract that customer, Enterprise Rent-A-Car has opened seven sites scattered across metro Denver over the past two years, but it maintains a counter at DIA.
Hertz has 11 local outlets, including one at DIA.
“We’ve seen in the past several years a shift in how Americans are using car rental services,” said Patrick Farrell, a vice president at St. Louis-based Enterprise, the industry leader in nonairport rental sites.
Patti O’Keefe, general manager of the Denver Marriott City Center, said roughly half the rental cars used by its guests are rented downtown.
“A lot of guests have learned that they don’t need a car the whole time they’re in Denver, because it’s so easy to get around,” she said. “So they’ll rent one for a day to go to the mountains or to make a sales call in the Tech Center.”
Staff writer Julie Dunn can be reached at 303-820-1592 or jdunn@denverpost.com.
Where the money goes
A breakdown of how Denver’s short-term rental-car tax is spent:
1.75 percent: Colorado Convention Center expansion
2.0 percent: Colorado Convention Center bonds
3.5 percent: City of Denver general fund
2.9 percent: Colorado state tax
1.0 percent: Regional Transportation District
0.1 percent: Scientific & Cultural Facilities District
0.1 percent: Stadium District
2.0 percent: Ownership fee tax (a tax passed on to the county in which the car is rented)
TOTAL: 13.35 PERCENT
Visitors who rent cars at Denver International Airport must also pay a daily $1.80 facility users fee and a 10 percent concession fee, which goes to pay airport operating expenses.
Source: City and County of Denver Treasury Division
