NEW YORK, July 29 (Reuters) - Discount car renter Dollar Thrifty Automotive Group Inc. on Tuesday said it would buy 16 of its Thrifty franchises as a way to increase revenue during the ongoing travel slump.
Dollar Thrifty, based in Tulsa, Oklahoma, did not disclose the financial terms of the deal.
The rental car industry has suffered badly since the Sept. 11, 2001 attacks because the weakened economy that followed kept many would-be travelers at home. To boost revenue, Dollar Thrifty aims to buy franchises in the top 50 U.S. rental locations.
Under the deal announced Tuesday, it plans to buy the Thrifty Car Rental franchises in Atlanta, Houston and Ontario, California. The Atlanta and Ontario acquisitions become effective Aug. 1 and the Houston transaction, which includes seven locations in the area, becomes effective Sept. 15.
The company owns the locations responsible for about 87 percent of Dollar Rent A Car's revenue and about 16 percent of Thrifty's revenue. Dollar Thrifty expects to bring in another $375 million of revenue over the next three years by acquiring more franchises, said Gary Paxton, Dollar Thrifty's president.
"The strategy, simply stated, is to operate the larger stores corporately and continue to franchise the medium and smaller markets," Paxton said in an interview.
Dollar Thrifty, which makes most of its money renting to leisure travelers at airports, combined Thrifty and Dollar earlier this year to create one operating unit with about 800 rental locations in the United States and Canada. The two brands remain separate.
Two rivals, Budget Rent A Car and ANC Rental, which operates the Alamo Rent a Car and National Car Rental chains, have filed for bankruptcy over the past year.
Cendant Corp. bought Budget last year and private equity investor Cerberus Capital Management is in the process of buying Alamo and National.