Advantage was born in 1963 in San Antonio, to Kenneth and Helen Walker, humble, yet entrepreneurial parents, who rented cars to military families for $3.99 a day.
Photo courtesy of Advantage.
If a brand could talk, Advantage Rent a Car would have a few stories to tell after 57 years.
Advantage was born in 1963 in San Antonio, to Kenneth and Helen Walker, humble, yet entrepreneurial parents, who rented cars to military families for $3.99 a day.
Over the next 20 years, the company grew through various names and iterations in local retail and airport markets across the Southwestern U.S., finally consolidating under the Advantage Rent a Car name in 1984. At the time of Ken Walker’s death in 2005, Advantage had expanded internationally through an affiliate network in 33 countries.
Things got interesting in 2006, when auto mogul Denny Hecker bought Advantage through a holding company. The not-yet-disgraced impresario had big plans for his new child, which never quite materialized.
Hecker embarked on a franchise initiative that never gained traction. Then, at the 2008 Car Rental Show, Hecker jumped on stage and declared Advantage’s destiny to be “the first major all-green car rental company in the United States.” (Hecker was wearing a green golf shirt to drive home the message. Whether he was talking about green as in “environmentally friendly” is still in doubt.)
Only a few months after the show, the Great Recession exposed Hecker’s house of cards. Advantage plunged into its first bankruptcy and laid off half of its workforce. In deep financial trouble but still two years away from his federal prison sentence, Hecker sold Advantage’s assets out of bankruptcy in 2009 to Enterprise. No, it was actually Hertz that snatched Advantage away for $33 million.
Advantage was the deep-discount child Hertz’s CEO Mark Frissora never had. Hertz could now play in the price-oriented leisure demographic that it couldn’t grow organically with its doomed Simply Wheelz brand.
Advantage grew again, into locations that belied its leisure sun destination roots. But Frissora was eyeing a bigger prize, Dollar Thrifty Automotive Group. To ease regulatory approval to acquire Dollar Thrifty, Hertz sold Advantage in late 2012 to a subsidiary of private equity firm Macquarie Capital and Franchise Services of North America (owners of the U-Save band).
FSNA and Macquarie had big plans for Advantage but running major airport locations was outside of FSNA’s purview. Less than a year after the FTC’s approval, Advantage went bankrupt again.
In 2014, Advantage was purchased by another private equity firm, Toronto-based Catalyst Capital Group. In 2015 Catalyst bought discount competitor E-Z Rent-A-Car. You can read about Catalyst’s big plans for the combined brands here.
As is the mission of private equity, Catalyst’s job is to ultimately sell Advantage for a profit, and the company did sink money into branding, personnel, and new fleet. And then the wheels fell off.
First, Europcar bought discount competitor Fox — not Advantage — in 2019, which cut off Advantage’s international inbound bookings. Then the coronavirus pandemic hit. Advantage went into its third bankruptcy in May.
With car rental at a standstill, Sixt was able to acquire 10 of Advantage’s plum airport desks. Sixt bought those locations for a pittance, yet the volume at those 10 locations (in normal times) equals the entirety of the car rental business in Germany.
Six concessions were bought by Dan Miller, from deep car rental roots and the present owner of Orlando Rentco (which does business at present as ACE Orlando). Miller bought Advantage’s (and E-Z’s) intellectual property; those locations will rent cars under the Advantage flag.
Advantage — which started with a fleet of five cars in 1963 — lives to rent another car.
Buying and reorganizing an airport car rental company during a global pandemic is no easy task. Miller will have to build fleet from about five cars again. With only six locations at present, he’ll be the smallest on-airport brand by far. He’ll have to negotiate with OTAs and airports wary of a bankrupt company, albeit one under new ownership.
But he has the concessions and the brand IP, and the landscape is wide open, as airports are more generous with minimum guarantee abatements and renegotiations that would’ve been unthinkable six months ago.
Catalyst was always saddled with creating a company that it could sell for a profit. Miller doesn’t need to have big plans for a slimmed-down Advantage. His goal is to simply run it as a profitable car rental company.
There may never be more uncertainty in the travel business than there is today. Yet, at some point, travelers will exit airplanes to rent cars again.
Entrepreneurs built the car rental industry in the U.S., and there are a few of them left. To Miller and the humble little brand from Texas, go rent some cars!
Author
