The tourism industry has experienced an upturn post the 2007-2008 economic slump. The strengthening of the job market and increased consumer confidence has led to increased spending on leisure and travel across the world. Car rental services are established in developed economies. In these countries, small and large companies are involved in renting vehicles of different sizes as per the requirement of the customer. It is common practice among individuals to rent vehicles when they travel for leisure either alone or with families. A developed infrastructure and ultra-modern road networks are some other reasons that are favoring the development of the car rental market in developed countries.
On the other hand, the car rental market is fairly new in developing economies. However, with economic growth and infrastructural development, car rental services are emerging to be an important element of the tourism industry. Due to increasing disposable income, individuals are spending large sums of money to travel comfortably on leisure trips. Hiring a private vehicle has the advantage of riding and stopping as per the car renter’s convenience, which is missing in a non-private vehicle. In urban areas, increasing influence of Westerners because of which holiday comfort standards have increased considerably among the upper middle-class individuals has opened growth opportunities for car rental services.
Some other factors that are driving the car rental market are surging public awareness about car rental services, the introduction of novel business concepts, an increasing number of Internet users, and increasing international travel for leisure. In addition, growing air travel and increasing demand for recreational activities have expanded the growth prospects for car rental service providers. In contrast, stringent emission standards, volatile crude oil prices, and low cost public transportation are some of the restraints in the global car rental market. Nevertheless, an increasing number of smartphone users that access the Internet through mobile devices will augment car rental bookings. Increasing online presence of car rental services and increasing investments by industry players will further bolster the growth of the car rental market.
Business Tie-ups among Car Rental Service Providers to Open Growth Opportunities
The global car rental market is highly fragmented with a presence of numerous small and large players. However, the major players are focusing on mergers and acquisitions in the bid to expand their global footprint. The rising consolidation in this industry has enabled market leaders, such as Enterprise Holdings Inc., to tie-up with local car rental companies for business expansion. This has resulted in growth opportunities for both small and large companies to serve global consumers.
The information presented in this review is based on the report, “Car Rental Market: Global Industry Analysis and Opportunity Assessment 2015–2025.”