Toyota's slew of recalls for allegedly defective accelerator pedals and floor mats is having an impact on Hotwire's car business.
You see, it's not just a consumer woe.
Expedia Inc. President and CEO Dara Khosrowshahi says the company's Hotwire unit has been experiencing weakness in car rentals, and this was exacerbated by the Toyota recall.
Major car rental firms like Hertz, AvisBudget and Enterprise had already been reducing fleet sizes in 2009, but Khosrowshahi notes that the Toyota recall brought fleet sizes down further. Hertz reportedly has been most-affected by the Toyota recalls.
Smaller fleet sizes, Khosrowshahi says, help Hotwire's pricing, but hurt volumes, and lead to a lower percentage of opaque sales.
Those opaque sales -- where Hotwire customers know the rental price before booking but not the identity of the car rental company -- are where Hotwire pulls in the big bucks.
Tnooz has reported that in September and October, fleet levels had declined to such an extent that Hotwire for the first time found itself sold out in some markets.
So, the massive Toyota recalls apparently haven't helped.
One would have to assume that Priceline, too, must be feeling some pain from the Toyota recalls.
Other than its car rental business, Hotwire is peforming "very well," Khosrowshahi says.
In fact, the room nights Hotwire sold increased more than 30% in the fourth quarter, he says.