(But sure make things difficult)
This one is not entirely Airport Manager Bill Manning’s fault.
The issue is rental car agreements at Mammoth Yosemite Airport between the Town, Enterprise Rental Cars and Hertz Rental Cars.
In an effort to raise additional airport revenue, Manning proposes a surcharge on both rental car companies if they maintain more than 12 cars at the airport at any one time.
Hertz franchisee Tom Cage has threatened to move his operation off-site if the $3 nightly surcharge per additional vehicle is applied.
Currently, the Town collects 15% of the gross rental fee for any car rented at Mammoth Yosemite.
During peak season (as in March, 2011), this fee nets the Town more than $12,000 rent per month.
The Town’s latest RFP (Request for Proposals) for Rental Car Operators indicated that services rendered by the Town in exchange for the fee include terminal counter space, parking, utilities and snow removal.
The RFP also states, ironically, that “a minimum of 15 vehicles be available on-site.”
Manning maintains that there is limited parking at the airport and that he has to charge for the additional spaces. After all, members of the public pay $8/night.
Cage believes the current parking area can be efficiently managed to create an ample number of spaces.
What complicates things is that Cage has two sites where he rents cars: both at the airport and at Mammoth Chevron in town. The airport rentals are subject to the 15% airport surcharge, whereas the in-Town rentals are merely subject to a flat $10 fee.
In short, it’s cheaper to rent in town, especially if you’re renting a vehicle for more than a few days.
The cynic would believe Cage is using the airport as a cheap storage lot while he tries to funnel rental business to town, where he would theoretically have a price advantage over his competitor, who only rents at the airport.
Cage insists this is not the case and that he generally makes half his rentals out of the airport.
Yes, he does acknowledge, if people really grumble about the price, he will let them know that they can take a shuttle to town and rent for less, but it is not something he broadcasts up front.
The issue he has with the additional parking surcharge appears to be that of a tipping point.
He feels he pays enough taxes already, and if the Town pushes him too far, he will move his airport operation across the highway to the industrial park on the west side of 395.
Then, like they do at most airports, he would shuttle customers from the terminal to the rental car location and pay the flat $10 rental fee to the Town.
Which would, theoretically, drastically reduce Town revenue derived from rentals.
Last month, Cage rented 68 cars out of the airport and paid a total of $2,168 in rent to the Town.
Based off-site, he would pay just $680 in fees to the Town for the same 68 cars.
This year, with added flights, Cage anticipates both rental car companies will need to have a combined 60 to 70 cars available to meet demand.
Adding cars isn’t cheap.
Paying nightly surcharges on added cars could jack Cage’s rent by $600 or $700 a month.
Finally, Cage’s lease is subject to 30-day notice of termination.
So he’s largely disincentivized to invest in his business to meet expected demand.
Effectively capping the Town’s ability to generate revenue from increased rental car business.
I’ve often heard the phrase in discussions about Town development projects that, “We don’t want to build the church for Easter Sunday.”
In other words, we don’t want to build so many units that they are only occupied for a couple of days a year.
The problem you encounter with the airline business is this: you do kind of have to prepare for Easter Sunday, because when one flight is cancelled, generally several flights are cancelled. And you’re left with a lot of folks who need transportation.
To serve these folks, it would be ideal if we had plenty of cars on-site.
As Cage says, imagine a guy taking a cab down to the airport. He’s then told his flight is cancelled. So he inquires about renting a car. “Sorry sir, the rental companies don’t keep enough cars down here because it’s cost-prohibitive, but we’re happy to call you a cab so you can go rent one back in town.”
Conclusion: I guess I’m flummoxed as to why Manning has unilateral latitude to make policy down at the airport. Council or the Town Manager needs to … manage him.