Each ARA convention is kind of a rental industry landmark and a good moment to reflect on the changes of the previous year. The rental industry faced its first major recession in a decade over the past year, and although we're beginning to see the light at the end of the recessionary tunnel, many rental companies are far from out of the woods.

We're beginning to see the light at the end of the recessionary tunnel, many rental companies are far from out of the woods.

While many have faced this most recent downturn with a certain amount of foresight, coupled with wisdom gained from previous recessions, others suffered from being overleveraged, facing far too much debt to absorb a slowdown. The seeking of bankruptcy protection by NationsRent is an example of this. Although NationsRent is too young as a rental company to have learned from previous recessions, one of its supposed strengths was the business experience of its management team. Perhaps the most evident lesson to be learned from its troubles — and I don't mean to jump on the bandwagon to kick this company while it's down — is that the rental industry operates from a very different set of dynamics than those of video rentals, used car rentals, 7-Elevens or other businesses its managers had expertise in.

Another major development since the last ARA show is another arrival of a major British firm into the U.S. market, with HSS' acquisition of the struggling RentX firm. While some British firms — such as GKN and BET — have, in the past, found the U.S. rental market less than hospitable, HSS seems to be approaching it with some new ideas, which you'll read more about in next month's RER. The jury is still out on the efforts of this firm as it is on Ashtead, which is expanding throughout the U.S. with its recent acquisition, Sunbelt Rentals.

As those British firms attempt to find their way in the U.S. rental market, Australian conglomerate Brambles recently made its exit by selling its assets to Evanston, Ill.-based NES. Most industry observers, myself included, have applauded this move by NES, which gives it critical mass through the heavily industrialized Midwest and a significant presence in the automobile manufacturing market. The consensus is that this will be a successful marriage. While we'll give it further review after the honeymoon, we, along with most in the industry, hope for the best.

We hope for the best because after the troubles at NationsRent and Neff — a company which should have had the foresight to have avoided some of the troubles it has run into — investors are viewing the rental market with more hesitation than a year or two ago.

The biggest question investors frequently posed was how would the rental industry fare in a recession. For the most part — and I urge them to check this out for themselves — the answer is pretty damn good compared to most of the industries one reads about in The Wall Street Journal these days.

But 2002 may still turn out to be a far more serious test. Let's hope for high marks in the months to come.