Car Rental in Tourism Industry

Tourism Vehicle Rental Market Analysis

The Tourism Vehicle Rental Market is expected to register a CAGR of 8% during the forecast period.

The COVID-19 pandemic hindered the growth of the Tourism Rental Market as there were global factory shutdowns, travel bans, and border lockdowns, to combat and contain the outbreak, impacting every industry and economy worldwide. As tourism is a huge market, the demand for vehicle rentals halted with continuous lockdowns across the world.

However, as the unlocking process began restoring economic activities Tourism vehicle rental market is expected to witness nominal growth during the forecast period. People tend to prefer rental vehicles to any other means of transportation to maintain social distancing and hygiene protocols.

Other driving factors of the tourism vehicle rental market are, comfort, quality of life, freedom of moment, affordability, and low cost of traveling. The luxury vehicles segment will grow at the fastest pace during the forecast period owing to increased travel budgets of tourists around the world.

Region-wise, Asia-Pacific is one of the fastest-growing regional markets for tourism vehicle rental within the forecast period due to the growing population coupled with transportation issues in the region. Tourism vehicle rental service is very useful in Asian countries like India, Australia, Cambodia, Japan, China, etc. North America is expected to witness significant growth amid rising road trips by people during forecast period.

Tourism Vehicle Rental Market Trends

Online Booking Expected to Witness Significant Growth during the Forecast Period

Increased concern and awareness about the containment of the virus have primarily led to an increase in vehicle rental options. Additionally, the tourism vehicle rental market also provides the option of increased mobility without the concern of paying the costs associated with vehicle ownership. These services are offered via websites and through other online platforms attributing to the growth of the market.

Increasing penetration of the internet and smartphone among consumers is estimated to shift consumers' inclination toward online booking mode. The growth is attributed to consumers' preference to have detailed access to the offerings of accommodation, amenities, and other benefits. For instance, in 2021 more than 60% of the total vehicle rental booking were made through online means. Additionally, owing to the increased internet usage, this number is expected to cross 70% by 2027.

With the growing trend in technology, renting a vehicle through online booking has become the most preferred choice of customers over the past few years. Moreover, it provides additional facilities to monitor a rental vehicle's operation, performance, and maintenance in real-time. Such features are tremendous assets for drivers and fleet managers, enabling them to better identify risks and implement timely improvements to their rental services.

Value for money, convenience, and search for authentic travel experiences are major factors fueling the growth of online booking. The increasing number of startups and third-party travel booking companies are offering services via application and website only. Hence, consumers are shifting their preferences from offline booking mode to online. These aforementioned factors are boosting the growth of online booking mode.

Rising Demand for Tourism Rental Vehicles in North America

The United States is the leader in the tourism vehicle rental market as major car-renting companies have their fleets in almost all the major cities. The size of the fleet for any player depends on the number of tourists preferring to rent a vehicle locally and the volume of foreign passengers visiting a city. Canada has a large domestic and foreign tourism industry.

• Being the second-largest country in the world, Canada's incredible geographical variety and the presence of around 20 world heritage sites are significant tourist attractions across the country. Much of the country's tourism is centered in regions like Toronto, Montreal, Vancouver/Whistler, Niagara Falls, Vancouver Island, Calgary/Canadian Rockies, British Columbia's Okanagan Valley, and the national capital region Ottawa. Therefore, these regions are some major hotspots for tourism vehicle renting.

Europe is also expected to see positive growth during the forecast period. The main driving factors behind corporations expanding their fleets are a good macroeconomic outlook and the government's expansionary policies. Fleet managers are increasingly choosing low-emission vehicles such as electric vehicles and hybrids as the government adopts regulations against polluting diesel automobiles. As leasing is a reasonable car finance option because of the significant residual risks involved with such vehicles, it is expected to discourage van rental companies to expand in the region. Considering the update of electric vehicles, OEMs are launching electric vans in the region. For instance,

• In May 2021, Opel has unveiled its two new vans Movano and Movano-e. The vans are available in two powertrain option such as diesel and electric. The vans are also equipped with High-tech assistance systems for protection of all road users. The vans are available across rest of Europe such as in Poland, Netherlands, Sweden, Greece etc.

Apart from these factors, the increasing demand for rental vehicles is mainly driven by people's interest in road trips and the rising importance of comfort and safety in the wake of the pandemic. The tourism rental market is expected to grow gradually as transport operations returned to their normal functioning with a new normal, i.e., following social security guidelines for safety.

Tourism Vehicle Rental Industry Overview

The tourism vehicle rental market is consolidated and dominated by a few players, such as Enterprise Holdings Inc., Hertz Global Holdings Inc., Avis, Europcar Mobility Group, Sixt SE, and Budget, among others. The companies are expanding their fleet size and launching. For instance,

• In July 2021, Key'n Go, which is operated by Goldcar, the low-cost brand of Europcar Mobility Group allows customers to benefit, at scale, from a 100% digital, safe and fast solution to book, pick up & return their vehicle in 35 key leisure airports in Southern Europe.
• In December 2021, Zoom car, an India-based car rental startup, announced that it will soon launch its operations in Vietnam. The company has also roped in Kiet Pham, who previously held senior management positions in Gojek and Oyo, as it is country head. Zoom car added that the foray into Vietnam is in line with the company's mission to democratize car access across the world's most populated and fastest-growing emerging markets.
• In February 2020, the SIXT Company's 42% stake was acquired by Hyundai Capital Services for around USD 170 Million. Further, in June 2020, SIX, T, a leading German-based international provider of high-end mobility services, hasn't built a new partnership with the car rental, leasing, and limousine subsidiary Alturki Holding Saudi Arabia.
• Avis Budget Group Inc. added 6,000 Peugeot, Citroën, and DS vehicles to its connected car rental fleet in Europe. These vehicles may operate across the company's Avis and Budget brands in Austria, Belgium, the Czech Republic, France, Germany, Italy, Luxembourg, the Netherlands, Portugal, Spain, Switzerland, and the United Kingdom, along with the Maggiore brand in Italy.

Tourism Vehicle Rental Market Leaders

Tourism Vehicle Rental Market News

• In January 2022, ekar, the Middle East's mobility company, launched its operations in Thailand starting with Bangkok and with plans to expand into other countries. ekar is launching its proprietary car subscription service which offers cars from one to nine-month terms for a single monthly subscription cost with no down payments or long-term commitments via the ekar app.
• In December 2021, Volkswagen announced plans to acquire Europcar in France and launched USD 3.4 billion. The acquisition will be handled by Green Mobility Holding, a dedicated vehicle of which Volkswagen will own two-third.
• In November 2021, Hertz rentals partnered with Tesla Motors, to supply 100,000 Model 3S by 2022, and news that half of these vehicles are expected to be rented out to Uber drivers.
• In July 2021, Key'n Go, which is operated by Goldcar, the low-cost brand of Europcar Mobility Group allows customers to benefit, at scale, from a 100% digital, safe and fast solution to book, pick up & return their vehicle in 35 key leisure airports in Southern Europe
• In February 2021, Theeb Rent a Car, a Saudi-based car rental company extended its car rental fleet in the Kingdom. The company has added more than 1,700 cars from luxury brands such as BMW, Mercedes, and also economic models such as Chevrolet, Kia, Ford, Nissan, Toyota, and Hyundai, including the new 2021 models.