Hertz Records $1.9B Revenue for Q4 2021 as Travel Restarts
Global car rental company Hertz has released the results of its performance in the fourth quarter of 2021 and the entire year. Its Q4 report showed a $260 million loss equivalent to a $1.52 per share deficit. However, it also posted record revenues for the period, with its $1.9 billion earnings beating its 2021 revenue for the same time frame. This strong performance is indicative of a recovery in the travel industry, which has been adversely affected by the pandemic and supply chain crisis.
Hertz has now joined Microstrategy and Tesla in recording strong performances in their Q4 reports for the 2021 fiscal year.
Hertz’s Bounces Back to Pre Covid Levels
Hertz’s strong performance in Q4 2021 saw the car rental company post new records in two crucial metrics. Its Adjusted earnings per share of $0.91 and Adjusted Corporate EBITDA of $628 million become new highs. It was achieved through good cost management and careful fleet management combined. These trends combined with a steady recovery in travel demand caused its RPU to gain 31% in the period.
Also, its Q4 total revenue of $1.9 billion was 78% higher than 2020 and just 9% lower than 2019, excluding Donlen for the same period. The company achieved total revenues of $7.3 billion and adjusted earnings per share of $4.39 in 2021. Adjusted Corporate EBITDA reached a new high of $2.1 billion, with a margin of 29%. It further redeemed its preferred shares and repurchased 27.5 million shares of its common stock in Q4. This ensured that Hertz had $3.2 billion liquidity at the end of 2021.
The company’s interim CEO, Mark Fields, revealed that sustained structural improvements and disciplined fleet management were essential to its performance. He further highlighted Hertz’s resilience and ability to innovate as key in surmounting challenges faced in 2021. He noted,
“2021 was a transformative year for Hertz. Sustained structural improvements and disciplined fleet management contributed to a strong performance across our top and bottom line, despite the challenges presented by COVID, supply chain constraints and labour shortages. We have demonstrated our resilience and ability to innovate and to make progress on playing a central role in the modern mobility ecosystem.”
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Travel Industry Enjoys Gradual Recovery
The travel industry, severely hit by the Covid-19 pandemic and global lockdown restrictions, has started showing signs of recovery. The removal of travel constraints has seen the sector spring to life with the appetite for traveling on a high.
Global travel advertising platform Expedia group media solution recently released its Q4 2021 Travel Recovery Trend Report. It revealed that the appetite for travel has continued to grow compared with 2020. It also highlighted that while global search volume in Q4 was flat quarter-over-quarter, it increased more than 70% year-over-year.
The report further noted that there was a strong demand for long-haul destination travel. Its outlook for 2022 shows that Americans, in particular, intend to go big on their next trip. According to the survey, 68% of Americans are eyeing intercontinental destinations like Rome, Bali, London, and Paris. These cities have all recorded double-digit quarter-over-quarter growth in hotel bookings.
Despite these indications of recovery, the travel industry may be set back if ongoing geopolitical issues persist. The ongoing Russia-Ukraine crisis may cause severed diplomatic ties between allied countries. This situation will dampen movements and affect companies like Hertz, whose business is intertwined with people migrating.
Following its fourth-quarter earnings announcement, Hertz’s share price slumped by about 7.68% before rebounding. Despite its drop, the entire financial market has been in limbo due to global headwinds affecting its price. As of press time, the share price stood at $19.75
However, a return to pre-pandemic travel levels in 2022 would make it a big year for the travel industry.
Do you think the travel industry will experience more significant recovery in 2022? Let us know your thoughts in the comments below.