Hertz Global says US advanced bookings holding up in Q4

Oct 30 (Reuters) - Hertz Global Holdings Inc (HTZ.N) said advanced bookings are holding up in the United States in the seasonally weak fourth quarter. Better-than-expected leisure demand and cost management are key drivers for the improvement in the U.S. rental car business, Chief Executive Mark Frissora said on a conference call with analysts.

Frissora, however, said as industry-wide fleet continues to be excessive, some competitors are offering significant discounts and pressuring prices.

"Our biggest challenge in U.S. rental car continues to be in the business travel market, where demand is weak but improving," the CEO said.

Car rental companies, which have been hurt by the slowing economy as customers cut their discretionary spending on travel, may be starting to see some improvement in business.

Hertz, whose rivals include Dollar Thrifty Automotive Group Inc (DTG.N) and Avis Budget Group Inc (CAR.N), raised its full-year outlook on Monday and reported a stronger third-quarter profit on Thursday. [ID:nBNG434309]

Improving trends in the rental car business are going a long way to offset the challenges in the equipment rental business, Frissora said.

Equipment rental accounted for 14 percent of Hertz's business in the third quarter.

Hertz -- which recently extended its partnership agreement with leisure travel organization AAA through 2015 -- said the contraction in its Europe business was also leveling off.

Shares of the company rose 5 percent earlier in the day, but later pared those gains and were trading down 4 percent at $9.16 Friday afternoon on the New York Stock Exchange. (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Anne Pallivathuckal)