Joe Ferraro: Yes. Okay. So like I said, I think the underlying business economics as it pertains to the consumer, I think, are strong. And we will continue to see that throughout 2024 as it pertains Chris, to both demand and price. So let’s start off with demand. Demand we saw in 2023, we had the best summer on record, yet we come out of it, and we have the strongest October and a good holiday season. I think the fourth quarter depicts like that segmentation of travel. October, you would say, well, why would that be the business? Well, the busiest? Well, it has the biggest impact of both commercial and leisure in any given month. Commercial because there’s a lot of business travel, a lot of conventions, leisure because all getaways and like I said, some combination of both, which I think is incredibly powerful.
You have a person who goes on a business trip to a city. And we saw the cities start to develop bigger and bigger books of business last year than we had in the past. So it goes on a business trip to a city and then takes a weekend football game or something. I mean we’ve seen that combination of commercial that leads to leisure. And I do think that’s pretty powerful when it comes to rental and rental demand. And we have a good number of commercial accounts. We have, like I said, more business than we did in 2019. I think you’ll start seeing that kind of normalize from the big jumps that we had — what we saw in previous years, the commercial and leisure spread. But price, as I said, we signed a lot of our — in 2023, our larger commercial accounts at a price improvement, which is helpful and it’s the first time we could say that, probably in many years prior, that was not the case.
So we have done that on a go-forward basis. And I think the overall demand, my last comment, and the macro stuff surrounding demand. PSA volume has been up. As you look at the last — if you look at PSA volume for the whole year, it was kind of flat to ’19 until you got to the fourth quarter. And then it came up. And then what are the airlines talking about now or in travel in general. Well, the amount of seats that are going to be available in the first quarter and the second quarter that they’re showing going to various destinations are up between 4% and 5%. And so the demand economics are good. Now you say, well, how is price? I think we took advantage of the supply-demand challenges that were faced in the industry and those post-COVID years.
Person who had most cars in the places that matter most that had the best price seemingly could win that environment. And we did that. And now prices coming down and more normalizing. The fleets are not the same as they were back then. But I think extremely rational right? You hear what I’m trying to do in the first quarter, had a little bit of a delivery issue. We’re rightsizing that and doing it immediately. I think as fleets kind of getting more in line as you go to the traditional peaks, which I believe will be elevated. The holiday periods and the summer season, those traditional peaks, people want to get out, and I believe those to be elevated. And that’s going to support price. Now you say, well, it’s going to be well over ’19. I could tell you that.
And I believe as you get closer to these peaks, it more normalizes to what we saw back in 2023. I hope that helps.
Chris Woronka: Yes. Super helpful. Thanks, Joe. Just as a follow-up, it’s pretty clear you guys gained market share. And I don’t know if it’s possible to look at it by segment. But how durable do you think those gains are, Joe? I mean there’s reasons for it, most of which are — you guys are terrific operators and have been, like you said, had the right cars and things like that. But do you think it’s sustainable if one or more of your competitors maybe optimizes their fleet a little differently.
Joe Ferraro: Yes. We don’t really ever talk about market share as a company strategy or is something that we’re driving. It’s an outcome of how you perform in business is really that. And I think over the years, what we’ve tried to do is insulate ourselves by how we look at our segments and how we manage our business. Right now, inbound business is very, very strong, right? And it wasn’t apparent in the prior years. And I believe that, that certainly will continue. What other people do with their fleets and their — and how they go about is not something that I would suggest that we do here. We look at our own business, our own internal metrics, how we believe we need to grow it. We set our strategies. We have the performance metrics that we manage and look at market share for me is kind of an outcome.
Chris Woronka: Okay. Thanks, Joe.
Operator: Thank you. Our final questions will come from the line of Stephanie Moore with Jefferies. Please proceed with your questions.
Stephanie Moore: Hi, good morning. Thank you. So I think, I appreciate the color provided on the DPU [ph] expectations in 2024. I think there’s understandably a lot of moving pieces that go into that DPU. But can you talk about the levers that can be pulled to help mitigate outside on DPU going forward? Or maybe ask another way, how can investors get comfortable that there’s not incremental pressure to earnings from here as the year progresses? Thanks.
Izzy Martins: I think it’s – hi, Stephanie, it’s Izzy. I think it’s one of those things that as we were preparing for this is how we’re thinking about how the first quarter, the second quarter and the third quarter kind of progress. So your question about the $325 that we’re saying for the total company. As you can imagine, there’s many — not many, but there are levers that we think about. We think about the mix of the fleet, how long we’re going to hold on to the fleet, how many mileage are we putting in it, as Brian stated in the prior in the prior question, right? It has a lot to do also how the used car market is performing. So there are times, there’s ups and downs of the used car market. But of course, we’re always trying to, as I said earlier, trying to actually depreciate to no gain or loss.
So really, as the coming months progress, as we see what happens in the first quarter and we’re not just only going to defleet in the first quarter, we’re going to defleet as well in the second quarter. We’ll continue to evaluate it, but our assumptions right now is that our total company depreciation per unit will be in the range of $325.
Stephanie Moore: Got it. And then just as a quick follow-up on RPD. So just a clarification. So it sounds like you expect normal seasonality in RPD throughout the year. And continuing to use 2019 as that benchmark from, so to say, a spread standpoint. So are you saying that the spread should remain pretty consistent as we move throughout 2019? We move throughout 2024 versus 2019 levels just following normal seasonality?
Joe Ferraro: Yes. That’s what I would suggest. It would be — second quarter being better than the first and the third quarter being the pinnacle. That’s not going to change. It’s just going to be a certainly a more elevated level than it was pre-pandemic.
Stephanie Moore: Right. Thank you so much.
Operator: Thank you. We have reached the end of our question-and-answer session. I would now like to turn the floor back over to Joe Ferraro for closing remarks.
Joe Ferraro: Thank you. So to recap, we reported our best full year revenue in our company’s history and our second highest adjusted EBITDA ever. We believe demand to continue to be strong and price elevated well above the 2019 levels as we manage efficiency improvements while keeping our vehicle supply tight. I want to take this time to thank all of our employees around the world for their tireless efforts in helping us achieve these results, and I’m excited to see what we can accomplish in 2024. As always, thank you for your time and interest in our company and be safe with this weather.
Operator: Thank you. That does conclude today’s teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.
