Back in May of this year, Hertz instituted a no-warning devaluation to their USA awards. With an increase of at least 11% for a free day, it was certainly an unwelcome change that hit the customers that rented more premium/luxury vehicles the hardest.
Did the Hertz Devaluation Eliminate 1 Million Free Days – At Least?
Yesterday, Hertz sent out an e-mail to lift up their program and talk about how “rewarding” of a year 2019 has been. They laid out some interesting statistics, such as the fact that the top location for members is Los Angeles, California and that members have received over 2.5 million upgrades.
The next stat of interest and one that caught my eye was that members have enough points for over 8 million free days. There was an asterisk marking the data as being based on customer journeys in the USA only. So, that would mean that it would be relevant to seeing how many free days may have been eliminated with the massive devaluation.
With At Least a 11% Increase, This Devaluation Stripped Away a Lot of Free Days
According to this post one Flyertalk, the compact to premium categories went up 11.1% in their required points for a rental. This was for a daily rental. For a weekly rental, it went up a staggering 36%!
Going by how programs normally use the “normal” category of their products for statistics like this, I think it is safe to assume they were referring to the compact-premium categories. Since they specifically mentioned “free days” they are probably also referring to single day rentals (which is why I used the 11% in my figuring).
That would translate to 1 million free days having been eliminated for future reservations from the Hertz reward books as a result of the May devaluation. Instead of 8,000,000 free days, there would have been 9,000,000 free days (at least) if the program had stayed as it was.
That shows us that this was no small thing at all! With a rental car possibly averaging $30 per day (because the 8 million does not count taxes and fees), that is a removal of around $30 million in potential free rewards that Hertz got rid of with their devaluation.
Of course, it could be even higher if they were using different metrics – either way, that devaluation was devastating to members who had been accruing points for a while for some future use or vacation.
So, is my math right on this or do you see it a different way? I realize that the points may not exactly have added up to a free day by themselves but it seemed to me that it could have averaged out this way.
[…] Did Hertz’s devaluation knock one million free rental days off their books? […]
Wow, Charlie, nice analysis. The new (on September 10, 2018) Hertz CFO, Jamere Jackson, has made a $30 million dollar improvement to the corporate balance sheet after less than a year on the job. Corporate PR gets a hot potato to handle and Mr. Jackson gets a nice raise. Oh, yeah, and the customers … well, you know what they get.