Michael S. Egan - president and CEO of Alamo Rent A Car

Chief Executive, The, Jan-Feb, 1995 by Judith Rehak

Michael Egan fell in love with the travel business watching tourists come and go at Storyland, his parents' amusement theme park in Wisconsin, where he worked as a teenager some 40 years ago. But it wasn't until 1973, when a friend asked him to run the Florida office of a fledgling car rental company, that Egan held his first position in the industry.

Three years later, he signed on with Alamo Rent A Car, becoming the company's president and CEO in 1979, and chairman in 1986. With Egan, 54, at the helm, the Fort Lauderdale company has nailed down nearly 12 percent of the $10 billion car rental market, leaping to No. 3 in fleet size behind Hertz and Avis.

Egan, who owns 92 percent of privately held Alamo, ascribes the company's success to relentless marketing. In fact, Alamo's first major coup came when Egan spotted a new market in the early 1980s: crowds of vacationers taking advantage of bargain airline fares.

"Our main competition ignored the market," Egan says. "By the time it finally recognized us, we had a good foothold."

Alamo initially lured customers by underpricing competitors by as much as 20 percent and offering unlimited mileage. Egan won over travel agents with speedy commission payments and specialized marketing.

Alamo does 60 percent of its business in leisure travel. But Egan is boldly pursuing the business travel market, where the Hertz, Avis, and National organizations are firmly entrenched. Alamo, which typically has located in less costly, "near-airport" sites, now has 71 of its 117 counters mnside airport terminals. The company also has launched "Express Plus" cards, which allow business users to rent a car with a quick swipe through a countertop machine.

One potential pothole: The shootings of foreign tourists driving rental cars in Florida has dampened business in Alamo's home state. In addition, costs are soaring in the car rental industry. "The No. 1 expense is the cost of a fleet car: It's gone up 60 percent in the last two years," says John LeSage, editor of Auto Rental News, a trade publication. "With intense competition, it's a 1 percent profit margin business."

But Egan remains optimistic, partly because of an unflagging confidence in his salesmanship skills. "I love to get up in the morning and market," he says. "I have a few more tricks up my sleeve."

COPYRIGHT 1995 Chief Executive Publishing
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